results for the year ended 30 june 2017 - emira...
TRANSCRIPT
EMIRA PROPERTY FUND
RESULTS FOR THE YEAR ENDED30 JUNE 2017
EMIRA PROPERTY FUND
GEOFF JENNETT
OVERVIEW
› Key metrics
› 5-year trackrecord
RESULTS FOR THE YEAR ENDED JUNE 2017
AGENDA
GREG BOOYENS
FINANCIALS
› Distributionstatement
› Balance sheet
ULANA VAN BILJON
PORTFOLIO
› Portfolioperformance
GEOFF JENNETT
PORTFOLIO UPDATE› Capex and
disposals› Enyuka› BEE deal› Rebalancing
OUTLOOK› FY18 outlook› Other matters› Summary
1
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017
EMIRA PROPERTY FUND
DISTRIBUTIONSPER SHARE
74.25c
ACQUISITIONS
Rnil
RESULTS FOR THE YEAR ENDED JUNE 2017
KEY METRICS AT JUNE 2017
NAVPER SHARE
1735c
DISPOSALS
R519m
VACANCIES
5.7%
CAPEXPROJECTS
R1.0bn
TENANTRETENTION
77%
LTV
36.6%
3
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017
5-YEAR TRACK RECORD
1 3251 511
1 751 1 735 1 7351 496 1 470
1 698
1 358 1 386
0
20
40
60
80
100
120
140
160
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
JUN 13 JUN 14 JUN 15 JUN 16 JUN 17
NAV (LHS) PI PRICE (LHS) DISTRIBUTION (RHS)
12-MONTHSHARE PRICE
+2.1%
TOTAL 12-MONTHRETURN OF
+12.7%
4
COMPOUND ANNUALGROWTH RATE IN NAV OF
7.0% p.a.
EMIRA PROPERTY FUND
EMIRA PROPERTY FUND
R’000 JUN 16 JUN 17 % CH
Contractual escalations, disposals, vacancies, rent reversions and Worley Parsons
RESULTS FOR THE YEAR ENDED JUNE 2017 6
DISTRIBUTION STATEMENT
Electricity expenses and bad debts
Rent collection fees and staff costs
Share buy-back programme
Property expenses (613 027) (667 610) 8.9
Net property expenses to revenue ratio (%) 15.7 15.3
Gross property expenses to revenue ratio (%) 35.3 37.2
Admin expenses (88 705) (93 821) 5.8
Dividends received – 20 280 >100.0
Net operating income 1 078 784 1 053 757 (2.3)
Revenue 1 780 516 1 794 908 0.8
EMIRA PROPERTY FUND
GOZ DPS growth and stronger R/AUD
RESULTS FOR THE YEAR ENDED JUNE 2017 7
DISTRIBUTION STATEMENT continued
Higherdebt levels,cross-currency swaps
Enyuka JV adjustment
BEE transaction
Repurchased shares cancelled, BEE share issuance
R’000 JUN 16 JUN 17 % CH
Income from listed property investment 58 045 58 516 0.8
Net interest cost (390 915) (393 541) 0.7
Enyuka adjustment – 1 860 >100.0
Antecedent interest – 19 404 >100.0
Distribution payable 745 914 739 996 (0.8)
Number of shares issue 510 550 084 522 667 247
Net operating income b/f 1 078 784 1 053 757 (2.3)
Dividend per share (cents) 146.10 143.18 (2.0)
DPS -2.0%
EMIRA PROPERTY FUND
Revaluation, developments and capex
R519m disposals transferred in FY17
RESULTS FOR THE YEAR ENDED JUNE 2017 8
BALANCE SHEET
R1.1bn of properties held for sale
Further investment, stronger rand, share price unchanged
Disposals proceeds
LTV reduced to 36.6%
R’000 JUN 16 JUN 17 % CH
Investment in Growthpoint Australia 940.4 901.4 -4.1%
Other assets 389.2 575.9 48.0%
Total assets 14 294.5 14 732.9 3.1%
Interest-bearing debt 4 978.2 5 379.2 8.1%
Other liabilities 458.6 513.8 12.0%
Shareholder equity 8 857.7 8 839.9 -0.2%
Investment properties 12 964.9 13 255.6 2.2%
Total equity and liabilities 14 294.5 14 732.9 3.1%
Derivative contracts, municipal accruals
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017
NET ASSET VALUE PER SHARE
9
1 659
1 735 1 735
1 661
76
340
(28) (13) (2) 74
1 400
1 500
1 600
1 700
1 800
Jun 16 Net change inshares in issue
Revaluation ofproperties
Revaluation ofGOZ
Other/IFRS Change inDistribution
Liability
Jun 17
NAV per share unchanged at R17.35
EMIRA PROPERTY FUND
R1.5bn of rollovers andnew loans concludedto Jun 17
R1.9bn debt maturingnext 12 months
RESULTS FOR THE YEAR ENDED JUNE 2017
DEBT FUNDING MIX
Diversified sources ofdebt and maturity dates
R839m of undrawn,backup facilities
10
-
100
200
300
400
500
600
700
JUL17
AUG17
SEP17
SEP17
NOV17
NOV17
NOV17
FEB18
MAR18
MAR18
MAY18
MAY18
MAY18
AUG18
AUG18
SEP18
MAR19
MAR19
JUN19
SEP19
SEP19
SEP19
NOV19
JUN20
SEP20
MAY21
Rm
FACILITY CAPITAL BALANCE CAPITAL AVAILABLE
EMIRA PROPERTY FUND
Hedgeddebt
97.4%
RESULTS FOR THE YEAR ENDED JUNE 2017
INTEREST RATE SWAP PROFILE
Weighted averageduration to expiry
2.9 years
Weighted averageall in interest rate
8.2%
11
0
100
200
300
400
500
600
700
800
900
DEC 17 JUN 18 DEC 18 JUN 19 DEC 19 JUN 20 DEC 20 JUN 21 DEC 21 JUN 22 DEC 22 JUN 23 JUN 24 DEC 24
Rm
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017 12
IN SUMMARY
EMIRA PROPERTY FUND
EMIRA PROPERTY FUNDEMIRA PROPERTY FUND
PROPERTY PORTFOLIO SUMMARY
RESULTS FOR THE YEAR ENDED JUNE 2017 14
161 149 146 141 145 144 134
0
60
120
180
JUN 11 JUN 12 JUN 13 JUN 14 JUN 15 JUN 16 JUN 17
NUMBER OF PROPERTIES
NUMBER OF PROPERTIES
61
23 15
4552
21 17
44
0
20
40
60
80
OFFICE URBAN RETAIL RURAL RETAIL INDUSTRIAL
NUMBER OF PROPERTIES PER SECTOR – 2016 VS 2017
2016 2017
EMIRA PROPERTY FUND
3428
7
31
OFFICE
URBAN RETAIL
RURAL RETAIL
INDUSTRIAL
31
29
8
32
PROPERTY PORTFOLIO SUMMARY: SECTORAL SPLIT
RESULTS FOR THE YEAR ENDED JUNE 2017 15
4437
415
OFFICE
URBAN RETAIL
RURAL RETAIL
INDUSTRIAL
2016 VALUE SPLITPER SECTOR (%)
R12.9bn41
39
515
2017 VALUE SPLITPER SECTOR (%)
R12.9bn
2016 GLA SPLITPER SECTOR (%)
1.2m m2
2017 GLA SPLITPER SECTOR (%)
1.1m m2
EMIRA PROPERTY FUNDEMIRA PROPERTY FUND
14 085 14 264
7 2075 130
10 90314 835 15 558
7 7785 271
11 433
0
5 000
10 000
15 000
20 000
OFFICE URBAN RETAIL RURAL RETAIL INDUSTRIAL TOTAL
R/m
2
AVERAGE VALUE PER m²
JUN 16 JUN 17
PROPERTY PORTFOLIO SUMMARY
RESULTS FOR THE YEAR ENDED JUNE 2017 16
93
208
38 4290102
241
41 4397
0
50
100
150
200
250
OFFICE URBAN RETAIL RURAL RETAIL INDUSTRIAL TOTAL
AVERAGE VALUE PER PROPERTY
JUN 16 JUN 17
+5%
+8%
EMIRA PROPERTY FUND
37
61
2
P-GRADE
A-GRADE
B-GRADE
C-GRADE
28
47
25
OFFICE SECTOR EXPOSURE
RESULTS FOR THE YEAR ENDED JUNE 2017 17
52
73
2017
2011
NUMBER OF PROPERTIES
R102m
R52m
AVERAGE VALUE PER PROPERTY (Rm)
GRADE OF OFFICE PORTFOLIO (%)
2011
GRADE OF OFFICE PORTFOLIO (%)
2017
EMIRA PROPERTY FUND
Office vacancies increased to 12.5%(SAPOA 11.8%)
RESULTS FOR THE YEAR ENDED JUNE 2017 18
VACANCY PROFILE BY GLA
Corobay Corner (8 992m²) 1 Kikuyu (7 383m²)Iustitia(5 141m²)
Urban retail vacancies stable at 3.1% (SAPOA 3.6%)
Rural retail vacancies stableat 3.6%
Industrial vacancies reduced to 1.7% (SAPOA 5.8%)
7.8%
3.2%
0.9% 1.4%
4.0%
10.5%
2.7% 3.3%2.4%
5.3%
12.5%
3.1% 3.6%
1.7%
5.7%
0%
2%
4%
6%
8%
10%
12%
14%
OFFICE URBAN RETAIL RURAL RETAIL INDUSTRIAL TOTAL
JUN 15 JUN 16 JUN 17
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017
TENANT RETENTION (%)
19
Expiries of 252 702m² comprising 608 leases
76 77 7675
68
7777
7472
60%
62%
64%
66%
68%
70%
72%
74%
76%
78%
m² NO. OF LEASES GROSS RENTALS
JUN 15 JUN 16 JUN 17
EMIRA PROPERTY FUND
PROPERTY TENANT LEASE END GLA (m²) STATUS
1 Kikuyu Road Eskom Aug 16 7 845
Parklands Health Care Clicks Oct 16 2 460
RTT Continental RTT Group Dec 16 12 921
Epping Warehouse Auction Operation Sep 16 13 662
9 Long Dept. of Public Works Jan 17 4 444
Amadeus PlaceAmadeus Global Travel Distribution
Jul 16 2 800
Wonderpark Virgin Active Dec 16 3 508
Podium at Menlyn Waymark Infotech Dec 16 1 509
East Rand JunctionHammondPole Majola
Feb 17 2 733
Steiner Services Steiner May 17 4 804
56 686 (70% renewed – calculated on gross rental)
RESULTS FOR THE YEAR ENDED JUNE 2017 20
10 MAJOR LEASE EXPIRIES BY GROSS RENTAL: FY17
Vacated
Renewed – 3 years
Renewed – 1 year
Renewed – 5 years
Renewed – 5 years
Renewed – 4 years
Renewed – 5 years
Renewed – 5 years
Vacated – re-let
Renewed – 3 years
EMIRA PROPERTY FUND
4.0
0.8 0.5
26.8
18.7
13.7
35.5
5.3
0.9 1.0
25.4
16.7
20.4
30.5
5.7
0.31.2
21.2 21.1
15.7
34.8
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
VACANCY VACATED JUN EXPIRIESROLLED OVER
YEAR 1 YEAR 2 YEAR 3 YEAR 4+
JUN 15 JUN 16 JUN 17
RESULTS FOR THE YEAR ENDED JUNE 2017 21
LEASE EXPIRY PROFILE (BY GLA) (%)
EMIRA PROPERTY FUND
SECTOR AREAAVG.
EXPIRY RENTALAVG. NEW
LEASE RENTALINCREASE/
(DECREASE) %
Office 76 049 117.74 111.89 -5.0
Urban retail 46 349 138.00 139.82 1.3
Rural retail 11 293 97.34 102.68 5.5
Industrial 139 389 48.00 48.13 0.3
Total Jun 17 273 080 84.66 83.71 -1.1
Total Jun 16 285 970 101.67 100.97 -0.7
Total Jun 15 200 929 92.50 92.33 -0.2
RESULTS FOR THE YEAR ENDED JUNE 2017 22
REVERSION – TOTAL (GROSS RENTALS)
EMIRA PROPERTY FUND
GROSS INCOME
Increased vacancies (Corobay Corner, Menlyn Square, 1 Kikuyu, Iustitia, Highgrove OfficePark) and rent reversions in the office sector
RESULTS FOR THE YEAR ENDED JUNE 2017 23
YEAR-ON-YEAR LIKE-FOR-LIKE GROWTH IN NET INCOME(static portfolio) (%)
EXPENSES
Managed and controlled in linewith budgeted expenditure
6.6
10.6
4.42.8
8.3
-0.5-2%
0%
2%
4%
6%
8%
10%
12%
GROSS INCOME EXPENSES NET INCOME
JUN 16 JUN 17 * Excluding depreciation saving and lease commission amortisation.
EMIRA PROPERTY FUND
PROPERTY TENANT LEASE END GLA (m²) STATUS
2 Sturdee Avenue Sasol Aug 17 5 603
12 Baker Street Sasol Aug 17 4 636
Tuinhof Trans Caledon Tunnel Apr 18 3 757
RTT Continental RTT Group Dec 17 12 921
Podium at Menlyn SA Forestry Sep 17 2 419
Cambridge Park Itec Dec 17 5 617
Wonderpark Builders Express Apr 18 2 483
Waterside Place Aecom Jul 17 2 316
Wonderpark Cashbuild Nov 17 2 227
Morgan Creek Simba May 18 4 644
46 623 (69% renewed – calculated on gross rental)
RESULTS FOR THE YEAR ENDED JUNE 2017 24
10 MAJOR LEASE EXPIRIES BY GROSS RENTAL: FY18
Will vacate(residential conversion)
Expecting to renew
Expecting to renew
Expecting to renew
Expecting to renew
Renewed – 6 months
Expecting to renew
Will vacate(residential conversion)
Renewed – 5 years
Expecting to renew
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017 25
VACANCIES BY GLA FOR FY18 (ANTICIPATED IN FEB 17) – UPDATE
PROPERTY EX-TENANT GLA (m²) FROM WHEN UPDATE
2 Sturdee Avenue Sasol 5 603 Aug 17
12 Baker Street Sasol 4 636 Aug 17
Waterkloof House SARS 4 000 Jul 17
Technohub Vodacom 3 342 Apr 18
16 Jan Smuts Avenue Venn & Milford 2 328 Sep 17
Cambridge Park Netflorist 2 295 Nov 17
Wonderpark Cashbuild 2 006 Dec 17
Corporate Park Pick-it-Up 1 552 Apr 18
918 Morkels Close TCS Huxley 1 250 Oct 17
Convention House All Life 1 167 Jul 17
Waterside Place 2 MTN 1 135 Dec 17
Cambridge Park Biomet 1 128 Jul 17
Corporate Park Voltex 1 118 Jul 17
31 560
Resi conversion – started
Building sold and transferred
Resi conversion – started
Busy with negotiations
Building sold and transferred
Renewed for 1 year
Renewed for 6 months
Renewed for 3 years
Renewed for 5 years
Renewed for 3 years
Will vacate
Vacated – re-let to Netflorist
Renewed for 8 months
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017 26
IN SUMMARY
EMIRA PROPERTY FUND
EMIRA PROPERTY FUND
BRYANSTON
GLA 31 584m2
Phase 1 – GLA 12 324m2
Phase 2 – GLA 3 564m2
RESULTS FOR THE YEAR ENDED JUNE 2017 28
KNIGHTSBRIDGE: P-GRADE
PROJECT COST
R820mR339.2mR106.0m
COMPLETION
Dec 19Sep 17/Oct 17Jun 18
EMIRA PROPERTY FUND
MENLYN
GLA 14 835m2
Building A, C and G1GLA 5 544m2
Building D and EGLA 9 784m2
RESULTS FOR THE YEAR ENDED JUNE 2017 29
SUMMIT PLACE: P-GRADE
PROJECT COST
R403.5mR127.4m
R276.1m
COMPLETION
Sep 17Dec 15/Sep 16
Sep 17
EMIRA PROPERTY FUND
EMIRA PROPERTY FUND
Yield on completion oftop 5 projects of above
8.4%
RESULTS FOR THE YEAR ENDED JUNE 2017 31
CAPEX PROJECTS IN PROGRESS
Yield on 17 projects ofR1.0bn currently in progress
8.0%
Further projects inplanning (not committed)
R862m
SPEND TO DATE (Rm) VALUE (Rm) COMPLETION
Knightsbridge – Phase 1 212.2 335.7 Sep/Oct 17
Knightsbridge – Phase 2 44.0 106.9 Jun 18
Summit Place – Block D 71.0 101.7 Sep 17
Summit Place – Block E 179.8 183.2 Sep 17
The Bolton (2 Baker Street + 2 Sturdee Avenue) 80.0 201.7 Jan 19
Total 587.0 929.2
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017 32
ENYUKA
› R575m of rural retail assets
› R50m of assets by One
› Earn the yield on assetsplus first 6% of growth, thereafter shared with One
› Potential to expand/growthe portfolio
› Unconditional from Jan 17
› Acquisition of R85m transferred
› Further acquisitions of R154m now unconditional
› “JV” to grow lower LSMretail assets
› 50.1% ordinary sharesby One
› 49.9% ordinary sharesby Emira
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017 33
BEE DEAL
›50% vendor loan at interest = dividend
› “skin in the game”
› Improved BEE credentials
›Proactive step
›30 June 2017
›5% share issue
EMIRA PROPERTY FUND
11 buildings
RESULTS FOR THE YEAR ENDED JUNE 2017 34
DISPOSALS: FY17
R519.7m Forward yield 10.3%
Premium+1.1%
EMIRA PROPERTY FUND
› R1.1bn held for sale
› Unconditional offers for R185m
› Conversion to residential
RESULTS FOR THE YEAR ENDED JUNE 2017 35
REBALANCING
EMIRA PROPERTY FUND
› 280 units, focus on LSM 7-8
› Development spend R121m
› JV with Feenstra Group
RESULTS FOR THE YEAR ENDED JUNE 2017 36
ROSEBANK RESIDENTIAL TO RENT
› 75% co-ownership
› Yield >10.5%
EMIRA PROPERTY FUND
EMIRA PROPERTY FUND
› Responsible rebalancing continues
› Groundwork for the future has been laid
› Plan to increase offshore exposure
› Return to positive growth in DPS
RESULTS FOR THE YEAR ENDED JUNE 2017 38
FY18 OUTLOOK
EMIRA PROPERTY FUND
Worley Parsons arbitration
RESULTS FOR THE YEAR ENDED JUNE 2017 39
UPDATE
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017 40RESULTS FOR THE YEAR ENDED JUNE 2017 40
BROKER APP
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017 41RESULTS FOR THE YEAR ENDED JUNE 2017 41
TENANT INCENTIVES
› Selected buildings only
› 3 and 5 year leases
› TI allowances 5/10 months
› Rent free periods 3/4 months
EMIRA PROPERTY FUND
Intelligent relocation
OTHER MATTERS
EMIRA PROPERTY FUND
› Groundwork has been laid
› Positive DPS growth in FY18
› Solid NAV underpin
RESULTS FOR THE YEAR ENDED JUNE 2017 43
SUMMARY
EMIRA PROPERTY FUND
EMIRA PROPERTY FUND
EMIRA PROPERTY FUND
FACILITY
VALUE OF PROPERTIES
Rm
FACILITYAVAILABLE
Rm
FACILITYDRAWN
Rm
TRANSACTIONLTV
COVENANT%
TRANSACTIONLTV
ACTUAL%
CORPORATELTV
COVENANT%
CORPORATELTV
ACTUAL*%
CORPORATEICR
COVENANTtimes
CORPORATEICR
ACTUALtimes
ABSA (secured) 586 250 105 45.0 42.7 40.0 36.6 2.0 2.6
Bank of China (secured) 232 155 155 n/a 66.8 40.0 36.6 2.0 2.6
DMTN – bonds (secured) 1 296 500 500 40.0 38.6 50.0 36.6 n/a n/a
DMTN – commercial paper + bonds (unsecured)
– 1 644 1 644 n/a n/a 50.0 36.6 n/a n/a
Investec (unsecured) – 200 146 n/a n/a n/a n/a n/a n/a
Nedbank (secured) 594 400 300 n/a 67.3 40.0 36.6 2.0 2.6
Nedbank (unsecured) – 300 300 n/a n/a 40.0 36.6 2.0 2.6
RMB (secured) 7 121 1 966 1 666 40.0 27.6 40.0 36.6 2.0 2.6
Sanlam (unsecured) – 200 200 n/a n/a 50.0 36.6 n/a n/a
Standard Bank (secured) 857 500 260 70.0 58.4 50.0 36.6 2.0 2.6
Total 10 686 6 115 5 276
Unbonded properties 1 871
GOZ investment 901
13 458 6 115 5 276
Enyuka 696 107 107
Grand total 14 154 6 222 5 383**
RESULTS FOR THE YEAR ENDED JUNE 2017 46
DEBT COVENANTS
* Actual corporate LTV calculation includes loans receivable (R97.0m) and cash on hand (R168.7m).** Excludes unamortised debt raising fees of R4.2m.
EMIRA PROPERTY FUND
JUN 2016 JUN 2017
Total property assets (Rm) 13 905 14 157
Listed Portfolio
GOZ (Rm) 940 901
Direct property portfolio
Valuation (Rm)* 12 965 13 256
% of the portfolio valued externally 30.5% 31.2%
Average value per property (Rm)** 90 98
Average discount rate (%) 15.3 15.1
Average exit capitalisation rate (%) 10.4 10.2
Number of properties 144 135
GLA (m2) 1 185 989 1 131 577
* Including land** Excluding land
47
VALUATION PARAMETERS
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017 48
COST-TO-INCOME RATIO (%)
34
15
35
16
37
15
0%
5%
10%
15%
20%
25%
30%
35%
40%
GROSS NET
JUN 15 JUN 16 JUN 17
EMIRA PROPERTY FUND
FY16 FY17
PROPERTY EXPENSE ANALYSIS (%)
RESULTS FOR THE YEAR ENDED JUNE 2017 49
66 n MUNICIPAL CHARGES n 70
8 n SECURITY EXPENSES n 8
7 n SERVICE CONTRACTS n 6
5 n RENT AND LEVIES PAID n 4
3 n BAD DEBTS n 4
5 n LEASING EXPENSES n 3
4 n MAINTENANCE n 2
2 n ADMIN EXPENSES n 1
1 n CONSUMABLES n 1
0 n MARKETING EXPENSES n 1
1 n STAFF EXPENSES n 1
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017 50
GEOGRAPHIC SPREAD BY NO. OF BUILDINGS: 2016 vs 2017
56
26
21
30
64
1
50
2220
31
6
3 2
0
10
20
30
40
50
60
JOHANNESBURG PRETORIA WESTERN CAPE KWAZULU-NATAL EASTERN CAPE BLOEMFONTEIN MPUMALANGA
2016 2017
EMIRA PROPERTY FUND
39
27
14
13
2 4 1JOHANNESBURG
PRETORIA
WESTERN CAPE
KWAZULU-NATAL
EASTERN CAPE
BLOEMFONTEIN
MPUMALANGA
38
27
14
14
3 31
GEOGRAPHIC SPREAD BY VALUE
RESULTS FOR THE YEAR ENDED JUNE 2017 51
30
41
13
11131
JOHANNESBURG
PRETORIA
WESTERN CAPE
KWAZULU-NATAL
EASTERN CAPE
BLOEMFONTEIN
MPUMALANGA
GEOGRAPHICAL SPREAD BY VALUE (%)
2016
29
41
13
11222
GEOGRAPHICAL SPREAD BY VALUE (%)
2017
GEOGRAPHICAL SPREAD BY GLA (%)
2016
GEOGRAPHICAL SPREAD BY GLA (%)
2017
EMIRA PROPERTY FUND
Quality improvement over six years
RESULTS FOR THE YEAR ENDED JUNE 2017 52
OFFICE SECTOR EXPOSURE
10
30
2017
2011
B-GRADE % OF TOTAL EMIRA PORTFOLIO
31
17
A- AND P-GRADE % OF TOTAL EMIRA PORTFOLIO
EMIRA PROPERTY FUND
The following are excluded from FY16 and FY17 numbers:
Purchases
› Mitchells Plain Town Centre, Ben Fleur Shopping Centre, Summit Place (A, C, D, E1, E2, E3 and G1), Portion 156 of the Farm 356 Zwartkop JR, Portion 180 of the Farm Brakfontein No 390, Jock of the Bushveld (Barberton), Hluhluwe Centre
Disposals
› Brandwag & Kosmos flats, 1289 Heuwel Avenue, 284 Oak Avenue, Southern Life Plaza, Cochrane Avenue, Sturdee House, Midrand Motor City, Waterkloof House, Brooklyn Gardens, Brooklyn Forum, 16 Jan Smuts, 500 Smuts, The Avenues North, Tokai Shopping Centre, *Riverworld Park
Refurbishments
› Kramerville Corner, Central Square Idutywa, Menlyn Corporate Park, Knightsbridge Manor, 80 Strand Street
* A structured sale has been finalised for this building and therefore it has been excluded from all portfolio calculations.
RESULTS FOR THE YEAR ENDED JUNE 2017 53
PROPERTIES EXCLUDED FROM LIKE-FOR-LIKE
EMIRA PROPERTY FUND
OFFICEIncreased vacancies (Corobay Corner, Menlyn Square, 1 Kikuyu, Iustitia, Highgrove Office Park) and rent reversions
RESULTS FOR THE YEAR ENDED JUNE 2017 54
YEAR-ON-YEAR LIKE-FOR-LIKE GROWTH IN NET INCOME(static portfolio) (%)
URBAN RETAILGross income 5.1% positive growth
Expenses 9%under control
RURAL RETAILGross income 4.5%positive growth
Expenses 12% cleaningand security statutory contracts
INDUSTRIALGross income 6.9%positive growth
Expenses 8.7%under control
-1.9
5.1 4.56.9
2.8
7.09.0
12.0
8.7 8.3
7.0
2.5 1.9
5.9
-0.5
-10%
-6%
-2%
2%
6%
10%
14%
OFFICES URBAN RETAIL RURAL RETAIL INDUSTRIAL TOTAL
GROSS INCOME EXPENSES NET INCOME * Excluding depreciation saving and lease commission amortisation.
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017 55
VACANCY PROFILE BY SECTOR AND GRADE BY GLA (%)
6.9
9.1
3.2
0.91.4
4.0
7.7
15.0
2.73.3
2.4
5.3
12.412.8
3.13.6
1.7
5.7
0%
2%
4%
6%
8%
10%
12%
14%
16%
PRIME + OFFICE A OFFICE B URBAN RETAIL RURAL RETAIL INDUSTRIAL TOTAL
JUN 15 JUN 16 JUN 17
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017 56
VALUE OF THE VACANCY BY GROSS RENTAL (%)
7.0
2.8
0.91.2
4.2
9.3
2.5
3.1
2.0
5.3
11.2
3.1 3.3
1.6
6.1
0%
2%
4%
6%
8%
10%
12%
OFFICE URBAN RETAIL RURAL RETAIL INDUSTRIAL TOTAL
JUN 15 JUN 16 JUN 17
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017 57
VACANCY BY SECTOR BY GROSS RENTAL AND GRADE (%)
6.4
8.2
2.8
0.91.2
4.2
7.9
12.2
2.53.1
2.0
5.3
10.9
12.2
3.1 3.3
1.6
6.1
0%
2%
4%
6%
8%
10%
12%
14%
PRIME + OFFICE A OFFICE B URBAN RETAIL RURAL RETAIL INDUSTRIAL TOTAL
JUN 15 JUN 16 JUN 17
EMIRA PROPERTY FUND
SECTOR AREAAVG.
EXPIRY RENTALAVG. NEW
LEASE RENTALINCREASE/
DECREASE %
Office 51 950 107.83 109.43 1.5
Urban retail 37 933 142.50 143.84 1.0
Rural retail 10 228 99.40 105.32 6.0
Industrial 114 220 46.63 47.20 1.2
Total Jun 17 214 330 80.84 82.16 1.6
Total Jun 16 230 602 104.14 102.75 -1.3
Total Jun 15 140 185 94.32 94.46 0.1
RESULTS FOR THE YEAR ENDED JUNE 2017 58
REVERSIONS RENEWALS (GROSS RENTALS)
EMIRA PROPERTY FUND
SECTOR AREAAVG.
EXPIRY RENTALAVG. NEW
LEASE RENTALINCREASE/
DECREASE %
Office 24 099 139.03 117.19 -15.7
Urban retail 8 417 116.83 121.67 4.1
Rural retail 1 065 80.62 77.37 -4.0
Industrial 25 169 54.29 52.37 -3.5
Total Jun 17 58 749 98.64 89.34 -9.4
Total Jun 16 55 367 91.59 93.57 2.2
Total Jun 15 60 744 88.29 87.40 -1.0
RESULTS FOR THE YEAR ENDED JUNE 2017 59
REVERSIONS NEW LEASES (GROSS RENTALS)
EMIRA PROPERTY FUND
PROPERTY TENANT LEASE END GLA (m²) STATUS
Epping Warehouse Auction Operation Sep 16 13 662
RTT Continental RTT Group Dec 16 12 921
1 Kikuyu Road Eskom Aug 16 7 845
Epping Warehouse Disaki Aug 16 5 480
Steiner Services Steiner May 17 4 804
9 Long Dept. of Public Works Jan 17 4 444
Wonderpark Virgin Active Dec 16 3 508
Johnson & Johnson Johnson & Johnson Nov 16 3 472
Amadeus PlaceAmadeus Global Travel Distribution
Jul 16 2 800
CEVA Midrand CEVA Feb 17 2 871
61 718 (87% renewed)
RESULTS FOR THE YEAR ENDED JUNE 2017 60
10 MAJOR LEASE EXPIRIES BY GLA: FY17
Renewed – 3 years
Renewed – 3 years
Vacated
Renewed – 5 years
Renewed – 5 years
Renewed – 5 years
Renewed – 3 years
Renewed – 1 year
Renewed – 2 years
Renewed – 3 years
EMIRA PROPERTY FUND
PROPERTY TENANT LEASE END GLA (m²) STATUS
RTT Continental RTT Group Dec 17 12 921
Cambridge Park Itec Dec 17 5 617
2 Sturdee Avenue Sasol Aug 17 5 603
Morgan Creek Simba May 18 4 644
12 Baker Street Sasol Aug 17 4 636
Tuinhof Trans Caledon Tunnel Dec 17 3 757
Wonderpark Caltex Jan 18 3 461
Cambridge Park Netflorist Oct 17 3 423
Technohub Vodacom Mar 18 3 342
Kramerville Corner Griffiths & Griffiths Apr 18 3 125
50 529 (80% renewed)
RESULTS FOR THE YEAR ENDED JUNE 2017 61
10 MAJOR LEASE EXPIRIES BY GLA: FY18
Expecting to renew
Expecting to renew
Will vacate(residential conversion)
Expecting to renew
Expecting to renew
Expecting to renew
Will vacate(residential conversion)
Expecting to renew
Renewed – 1 year
Expecting to renew
EMIRA PROPERTY FUND
LEASES CONCLUDED: EMIRA PORTFOLIO
RESULTS FOR THE YEAR ENDED JUNE 2017 62
NEW RENEWAL TOTAL
Total m² 128 109 194 439 322 547
Average duration (years) 3.0 2.5 2.7
Leave value (Rm) 436.9 368.5 805.4
Number of leases 430 419 849
* The weighted average duration for the total portfolio is 2.7 years.
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017 63
LEASE EXPIRY PROFILE – OFFICES (BY GLA) (%)
10.5
1.40.5
30.3
18.4
16.4
22.6
12.5
0.3 0.0
26.9
21.9
14.8
23.6
0%
5%
10%
15%
20%
25%
30%
35%
VACANCY VACATEDJUN
EXPIRIESROLLED OVER
YEAR 1 YEAR 2 YEAR 3 YEAR 4+
JUN 16 JUN 17
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017 64
LEASE EXPIRY PROFILE – URBAN RETAIL (BY GLA) (%)
2.70.2
1.8
12.8
15.9 15.1
51.5
3.10.4
1.9
16.3 15.613.3
49.3
0%
10%
20%
30%
40%
50%
60%
VACANCY VACATEDJUN
EXPIRIESROLLED OVER
YEAR 1 YEAR 2 YEAR 3 YEAR 4+
JUN 16 JUN 17
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017 65
LEASE EXPIRY PROFILE – RURAL RETAIL (BY GLA) (%)
3.3 3.1 3.6
22.0
17.116.0
34.9
3.6
0.0
8.1
13.915.8
22.3
36.3
0%
5%
10%
15%
20%
25%
30%
35%
40%
VACANCY VACATED JUN EXPIRIES ROLLEDOVER
YEAR 1 YEAR 2 YEAR 3 YEAR 4+
JUN 16 JUN 17
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017 66
LEASE EXPIRY PROFILE – INDUSTRIAL (BY GLA) (%)
2.4
0.5 0.2
32.1
15.4
30.5
18.9
1.70.4 0.0
21.7
26.4
17.2
32.5
0%
5%
10%
15%
20%
25%
30%
35%
VACANCY VACATED JUN EXPIRIES ROLLEDOVER
YEAR 1 YEAR 2 YEAR 3 YEAR 4+
JUN 16 JUN 17
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017 67
ESCALATIONS
8.4
7.8
7.67.7
7.9
8.2
7.5
7.77.6
7.8
8.1
7.5 7.5
7.7 7.7
5.0%
5.5%
6.0%
6.5%
7.0%
7.5%
8.0%
8.5%
9.0%
OFFICE URBAN RETAIL RURAL RETAIL INDUSTRIAL TOTAL
JUN 15 JUN 16 JUN 17
EMIRA PROPERTY FUND
SECTORNO. OF
BUILDINGSOCCUPIED
GLA (m²)AVG. NET
RENTAL (R/m²)
Office: P-Grade 4 50 430 171.03
Office: A-Grade 28 159 808 122.89
Office: B-Grade 19 99 175 106.82
Urban retail 21 314 482 124.34
Rural retail 17 86 329 110.81
Industrial 44 354 782 50.74
Total Jun 17 133 1 065 006 100.22
Total Jun 16 144 1 111 055 95.32
Total Jun 15 145 1 129 671 89.04
RESULTS FOR THE YEAR ENDED JUNE 2017 68
EMIRA NET RENTALS (excl. parking stores and vacancies)
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017 69
TENANT GRADING BY GLA
GRADING
“A” Large national tenants, large listed tenants, government and major franchisees“B” National tenants, listed tenants, franchisees, large regional tenants, medium to large professional firms“C” Other
5723
20
TOTAL PORTFOLIO (%)
A B C
51
7166
49
57
30
129
2923
19 18
2522 20
0%
10%
20%
30%
40%
50%
60%
70%
80%
OFFICE URBAN RETAIL RURAL RETAIL INDUSTRIAL TOTAL
PER SECTOR (%)
EMIRA PROPERTY FUND
TENANT EXPOSURE BY GLA
RESULTS FOR THE YEAR ENDED JUNE 2017 70
20
80
TOP 10 TENANTS
OTHER TENANTS
5
4
22
2
1
1
11
1
RTT GROUPPICK N PAYMASSTORESPEPKORSHOPRITEWOOLWORTHSEDCONAUCTION OPERATIONLITTLE GREEN BEVERAGESDEPT OF PUBLIC WORKS
TOP 10 TENANTS (%) OF THE TOTAL PORTFOLIO TOP 10 TENANTS (%) SPLIT OF THE TOTAL PORTFOLIO
EMIRA PROPERTY FUND
TENANT EXPOSURE BY GROSS RENTAL
RESULTS FOR THE YEAR ENDED JUNE 2017 71
20
80
TOP 10 TENANTS
OTHER TENANTS
3
3
3
3
2
2
1
11
1
MASSTORESRTT GROUPPICK N PAYPEPKOREDCONSHOPRITESA LOCAL GOVERNMENTSASOL GROUPMR PRICEKING PRICE INSURANCE
TOP 10 TENANTS IN TOTAL PORTFOLIO (%) TENANT EXPOSURE – TOP 10 TENANTS (%)
EMIRA PROPERTY FUND
MAJOR PROJECTSBEING CONSIDERED TYPE m²
VALUE(Rm)
CONSTRUCTIONTIME
267 West Parking space 3 702 18 000 000 8 months
1 Kikuyu Potential residential – 100% 7 845 175 000 000 22 months
Mitchells Plain Urban retail 1 500 15 376 000 6 months
Quagga Centre – Extension Urban retail 3 828 72 467 424 12 months
Quagga Centre Urban retail 4 952 200 000 000 20 months
Southern Centre Urban retail – 35 000 000 10 months
The Heights Mixed use 3 000 45 000 000 10 months
Tramshed Urban retail 12 096 41 359 411 14 months
Wonderpark Extension 2 Urban retail 10 000 260 000 000 22 months
Total 46 923 862 202 835
RESULTS FOR THE YEAR ENDED JUNE 2017 72
POTENTIAL NEW CAPEX PROJECTS – NOT COMMITTED
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017 73
SUSTAINABILITY PLANNING
GREENBUILDINGS› Knightsbridge 4-star
GBCSA ratings certifications in progress
WATEREFFICIENCY› Rainwater harvesting and
filtration installation at:» One Highveld –
estimated water saving is 1 000 000 litres/year
» Investigation at Kya Sands and Ben Fleur –estimated water savings of 40% per year for both properties
CLEAN ENERGY PRODUCTION› 1.2 MWp solar
farm complete at Randridge Mall» R22 million installation» Energy saving of
2GwH/year
CARBON FOOTPRINT REPORTING› Scope 1 and 2 emissions
reduced by 5.95%› 13% reduction target
set for Scope 1 and 2 emissions from thebase year by 2022
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017 74
DISPOSALS
PROPERTY LOCATION SECTORGLA (m2)
BOOK VALUE (Rm)
PRICE(Rm)
YIELD (%)
Southern Life Plaza Bloemfontein Office 10 697 79.5 98.2 12.0
Cochrane Avenue Cape Town Industrial 5 870 23.2 32.0 7.2
Sturdee House Johannesburg Office 1 620 29.8 31.5 10.9
Midrand Motor City Midrand Retail 7 646 27.7 32.0 15.0
Waterkloof House Pretoria Office 4 000 72.8 65.5 2.3
Brooklyn Gardens Pretoria Office 3 200 87.5 78.8 13.2
Brooklyn Forum Pretoria Office 7 382 97.7 87.9 11.8
16 Jan Smuts Avenue Johannesburg Office 2 328 21.7 22.0 5.9
The Avenues North Johannesburg Office 3 511 21.3 20.0 12.1
Tokai Shopping Centre Johannesburg Retail 2 603 16.2 14.8 17.7
500 Smuts Drive Midrand Office 5 201 36.6 37.0 7.5
Total 54 058 514.0 519.7 10.3
EMIRA PROPERTY FUND RESULTS FOR THE YEAR ENDED JUNE 2017 75
TOP TEN PROPERTIES BY VALUE
PROPERTY NODE CLASSIFICATION GLA (m2) MAJOR TENANTS
Wonderpark Shopping Centre
PretoriaNorth
Regional S/centre
90 882 Pick n Pay (12 867m²), Game (5 292m²), Woolworths (4 135m²), Checkers (3 981m²), Caltex (3 461m²), Edgars (3 998m²), Virgin Active (3 508m²)
Menlyn Corporate Park
Menlyn Offices 26 659 SALGA (7 025m²), Santam (4 524m²), King Price Insurance (8 298m²), BVI Engineering (1 533m²)
Quagga Centre Pretoria West
Small regional S/centre
29 409 Shoprite (5 715m²), Pick n Pay (4 878m²), Woolworths (1 807m²), FNB (1 367m²), Edgars (1 065m²)
Summit Place Menlyn Mixed use(office and retail)
14 834 Sizwe Ntsaluba Gobodo (2 402m²), Grant Thornton (657m²), KempsterSedgwick (2 484m²), Assupol Life (3 200m²), Planet Fitness (1 469m²)
Makro Selby Selby Community S/centre
19 705 Makro (19 705m²)
Randridge Mall RandparkRidge
Community S/centre
22 447 Pick n Pay (4 473m²), Woolworths (2 124m²), Dis-Chem (2 035m²),FNB (615m²), Foschini (594m²), Health -Worx medical centres (697m²), Mr Price (581m²)
RTT Acsa Park East Rand Industrial (warehouse)
46 673 RTT Group (46 673m²)
Corobay Corner Menlyn Offices 13 865 Eris Property Group (803m²), Council for the Built Environment (2 236m²),X-DSL Networking Solutions (863m²)
Hyde Park Lane Hyde Park Offices 15 539 Standard Bank (1 919m²),DTH Service (1 616m²), Bowden & Company (650m²), Truffle Asset Management (595m²), Deutsche Lufthansa Group (489m²)
Kramerville Corner Kramerville Showroom 18 460 Griffiths & Griffiths (3 597m²), Il Lusso (1 732m²), Collaro Designs (1 174m²), Design Plus Interiors (746m²), Nicci Boutiques (793m²),Décor Republic (768m²)
298 473 39% of the portfolio by value