sa corporate december 2012 year end results presentation

SA Corporate Year End 2016 Results Presentation

March 2017

Agenda

• Highlights Rory Mackey

• Financial Performance Antoinette Basson

• South African Portfolio Review Rory Mackey

• Unlocking Value in the Retail Portfolio Rory Mackey

• Zambian Portfolio Performance Rory Mackey

• Building the Afhco Business Rory Mackey

• Strategy & Prospects Rory Mackey

• Acknowledgments Rory Mackey

• Questions Team

2

HIGHLIGHTSRORY MACKEY

High Level Review

4

• Distribution Themes

• Full year distribution growth of 8.7% vs 2015

• Standing portfolio NPI growth of 5.9% (excluding developments)

• Investments contributed 6.4% of the 13.7% increase in total NPI

• Industrial portfolio achieved strong retentions of 75.7%

• Retail portfolio secured strong retentions of 79.6%, positive reversions of 6.0% and escalations of 7.7%

• Investment Strategy

• Acquisition of 2 retail properties for R314m and 8 largely residential properties for R497m

• Contracted and unconditional acquisitions of R1,676m

• Contracted and conditional acquisitions of R274m

• Disposal of 6 properties, as well as 25% interest in 50 Mangosuthu Highway, Umlazi, for R292m

• Contracted and unconditional disposal of 3 properties for R434m

• Developments in progress - Retail R853m, Industrial R370m and primarily Residential R535m

• Efficient Operations

• Property expense ratio excluding municipal expenses reduced from 13.7% to 12.3%

• Retail portfolio had improved recoveries as green initiatives started to bear fruit

• Capital Structure

• Well hedged with expiring swaps renegotiated to improved tenors

• Use of derivatives to lock in funding cost i.r.o. developments

FINANCIAL PERFORMANCEANTOINETTE BASSON

Distribution History

6

28.83 30.15 32.75

-

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

20112012

20132014

20152016

14.35 15.17

16.28 17.68 19.66 21.44

14.48 14.98 16.47 18.02 19.91

21.58

Interim Final

35.70

39.5743.02

Distribution Growth

7

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2012 2013 2014 2015 2016

5.7%7.3% 8.6%

11.2%9.1%

3.5%

9.9%9.4%

10.5%

8.4%

Interim Final

Distribution at a glance

8

Dec 2016 Dec 2015 %

Rm Rm Variance

Net Property Income - Standing Portfolio 1,078.649 984.576 9.6

Net Property Income - Acquisitions 115.725 47.675 142.7

Net Property Income - Buildings sold 10.636 27.822 (61.8)

Net Property Income 1,205.010 1,060.073 13.7

Taxation on distributable earnings (1.008) 0.489 (306.1)

Investment in Joint Venture 60.350 9.207 555.5

Yield guarantee on investment in Joint Venture

7.871 - -

Net finance costs (226.569) (231.146) (2.0)

Distribution related expenses (47.569) (37.562) 26.6

Anti-cedent distribution 17.624 52.392 (66.4)

Distributable earnings 1,015.709 853.453 19.0

Distribution per unit (cents) 43.02 39.57 8.7

First six months 21.44 19.66 9.1

Second six months 21.58 19.91 8.4

Distribution contributors and detractors

9

39.57

1.40

2.83

(0.76)

2.54 0.85

(0.40)

(3.01)

43.02

15

20

25

30

35

40

45

50

Distribution 31December

2015

Increase in NPI- StandingPortfolio

Increase in NPI- Acquisitions

Decrease inNPI - SoldBuildings

Investment inJoint Venture,including yield

guarantee

Decrease innet interest

paid

Increase indistribution

relatedexpenses and

tax

Impact ofshare

issuances

Distribution 31December

2016

Investment Properties Growth Analysis

10

Portfolio growth underpinned by acquisitions, development expenditure and upward revaluation.

12,392

15,022

811

598

(292)

1,513

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Investment PropertiesFY 2015

Acquisitions Improvements /development costs

Disposals Fair value adjustment Investment PropertiesFY 2016

Growth in Assets and Market Capitalisation

11

R’bn cents

0

100

200

300

400

500

600

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

2012 2013 2014 2015 2016

Total Assets (Rbn) Market Cap (Rbn) NAV per share (cents) Share Price (cents)

Net Asset Value

12

Cents per share

436.4

21.6

61.7

(1.9 )

2.9

(1.5)(19.9)

499.3

300

325

350

375

400

425

450

475

500

525

550

Opening NAV 1

January 2016

Distributable

earnings for

the period

Revaluation of

Investment

Properties,

Shares and

Interest Rate

Swaps

Net exposure

to Zambian JV

Net new

shares issued

Other Non-

distributable

income

statement

items

Distributions

paid to

shareholders

Closing NAV

31 December

2016

Capital Structure Sources of Capital

13

Debt finance sources are diversified between banks and institutional borrowings.

Equity, 72.4%

Bank Term Debts, 2.2%

Institutional and Development Finance Institution Debts, 3.8%

Bank Revolvers, 0.6%

Syndicated Loans, 21.0%

Equity Bank Term Debts Institutional and Development Finance Institution Debts Bank Revolvers Syndicated Loans

Capital Structure – at 31 December 2016Active Debt Management

14

Notwithstanding low leverage, liquidity risk is actively managed via high hedge ratio’s and staggered debt maturities.

0%

20%

40%

60%

80%

100%

120%

-

500

1,000

1,500

2,000

2,500

2016

(1 Y

ear)

Q1

2016

(1 Y

ear)

Q2

2016

(1 Y

ear)

Q3

2016

(1 Y

ear)

Q4

2017

(2 Y

ear)

Q1

2017

(2 Y

ear)

Q2

2017

(2 Y

ear)

Q3

2017

(2 Y

ear)

Q4

2018

(3 Y

ear)

Q1

2018

(3 Y

ear)

Q2

2018

(3 Y

ear)

Q3

2018

(3 Y

ear)

Q4

2019

(4 Y

ear)

Q1

2019

(4 Y

ear)

Q2

2019

(4 Y

ear)

Q3

2019

(4 Y

ear)

Q4

2020+

(5+

Years

)

Interest Rate Risk (Hedged) (%) Debt Maturity Profile

Group debt structure – at 31 December 2016 (excl. fixes)

15

Maturity and interest rate profile of interest-bearing debt WAR of 8.5%, weighted average tenor of 2.8 years, and WAM of 1.7%.

2016 movements

Loan type:

6.88% Amortising

9.21% Term Loan (Syndication)

2.69% Term Loan (US$)



8.81% Revolving credit

8.96% Term Loan


9.01% Term Loan

9.01% Term Loan

9.06% Term Loan

8.86% Term Loan (Syndication)1,152

200

270

30

-

-

100

848

950

371

550

129

-

-

-

-

300

500

100

-

-

-

-

-

0 200 400 600 800 1,000 1,200

Dec 2017

Aug 2018

Sep 2018

Sep 2018

Nov 2018

Jan 2019

Mar 2019

Dec 2019

Jun 2020

Nov 2020

Dec 2021

Apr 2024

Amount Drawn Available

Group debt structure – at 31 December 2016 (incl. fixes)

16

Maturity and interest rate profile of interest-bearing debt – WAR inclusive of fixes of 8.5%. Current LTV 29.0%

Loan type:

6.88% Amortising


3.59% Term Loan (US$)




8.88% Term Loan


8.93% Term Loan

8.93% Term Loan

8.98% Term Loan

8.78% Term Loan (Syndication)1,152

200

270

30

-

-

100

848

950

371

550

129

-

-

-

-

300

500

100

-

-

-

-

-

0 200 400 600 800 1,000 1,200

Dec 2017

Aug 2018

Sep 2018

Sep 2018

Nov 2018

Jan 2019

Mar 2019

Dec 2019

Jun 2020

Nov 2020

Dec 2021

Apr 2024

Amount Drawn Available

Group swap profile – at 31 December 2016

17

Tenor and interest rate swaps profile – weighted average tenor – 3.4 years and rate of 6.7% (weighted swap margin 0.0002%). 89.0% of variable rate debt hedged by swaps. 89.3% of effective debt fixed (incl fixed rate debt)

* Includes $27m swap at 1.79% (based on US LIBOR)

8.45%

7.40%

7.60%

4.65% *

6.35%

7.27%

6.51%540

705

240

771

650

834

240

- 500 1,000

2017

2018

2019

2020

2021

2022

2023

Swap amount

Group net cash flow

18

310,341

1,161,688

(303,014)

(895) (111,730)

(3,269)

(1,149,640)

(263,903)

(1,616)

304,390

36

(78,461)

(949,330)

600,027

(44,550) (7,098)

(21,596)

750,000

191,380

(1,400,000)

(900,000)

(400,000)

100,000

600,000

1,100,000

Bala

nce 3

1 D

ecem

ber

2015

Cash g

enera

ted fro

m o

pera

tions

Net

finance c

osts

Taxation p

aid

Acquis

itio

n o

f subsid

iaries

Acquis

itio

n o

f Pro

pert

y,

pla

nt

and

equip

ment

Acquis

itio

ns a

nd I

mpro

vem

ents

to

Investm

ent

Pro

pert

y

Advances

Lett

ing c

om

mis

sio

ns a

nd t

enant

insta

llations

Dis

posal of in

vestm

ent

pro

pert

ies

Dis

posal of pro

pert

y,

pla

nt

and

equip

ment

Incre

ase in fin

ancia

l assets

Dis

trib

utions p

aid

Issue o

f new

share

s

Investm

ents

in s

hare

s

Buy-b

ack o

f share

s

Inte

rest

bearing b

orr

ow

ings -

fore

ign

Inte

rest

bearing b

orr

ow

ings -

local

Bala

nce 3

1 D

ecem

ber

2016

R '000

Trading Volumes and liquidity

19

SAC: closing price v monthly volume traded Value traded as % of market capital

-

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

0

100

200

300

400

500

600

Volume Traded Closing Price ( c )

FFB

EMI

GRT

RESVKE

FFA

HYP

SAC

IPF

RDF

0%

10%

20%

30%

40%

50%

60%

70%

80%

-20,000 - 20,000 40,000 60,000 80,000 100,000

SOUTH AFRICAN PORTFOLIO REVIEW

RORY MACKEY

Overview – Sectoral Analysis (excl. Rest of Africa JV)

21

SA Corporate excluding Zambian JV

• 179 Properties

• Total GLA 1,409,618m2

• Total Portfolio R15.0bn (Dec-15: R12.4bn)

Zambian JV

• 3 Properties

• GLA 55,806m2

• Portfolio Value R860.8m (Dec-15: R938.5m)

Traditional standing Portfolio:

• Weighted Average discount rate 14.8%

• Weighted average capitalisation rate 8.9%

5,4

19

11,5

80

12,9

84

6,7

65

7,6

84

5,7

34

14,2

78

13,2

88

10,4

38

8,9

24

6,2

31 18,0

47

15,7

98

10,5

59

10,5

11

-

10,000

20,000

Industrial Retail Commercial AFHCO Average

Market Value per m²

December 2014 December 2015 December 2016

Sectorial Profile (% of GLA)

Sectorial Profile (% of Market Value)

31%

45%

7%

17%

Dec 2016

56%

26%

6%

12%

Industrial

Retail

Commercial

AFHCO

Dec 2015

36%

41%

9%

14%

Industrial

Retail

Commercial

AFHCO

Dec 2015

53%

27%

5%

15%

Dec 2016

22

Retail Portfolio Valuation Explanation

Dec 2015 Ownership Value

Dec 2016 Ownership Value

Contribution to increase in valuation (%)

Balance

Total of all retail properties as at valuation dates

4 954 6 766 36.6%

Acquisitions 4 954 6 436 6.7% 29.9%

Capex 4 954 5 926 10.3% 19.6%

Adjustment in terminal capex 5 009 5 926 1.3% 18.3%

Adjustment to perpetual vacancy provision 5 059 5 926 1.2% 17.1%

Adjustment to letting commissions to reflect industry norms

5 211 5 926 3.4% 13.7%

Electricity recoveries alignment with the portfolio performance

5 370 5 926 3.4% 10.3%

Rent reversions aligned with portfolio rent to sales statistics

5 558 5 926 3.7% 6.6%

Portfolio movement excluding adjustments 5 558 5 926 30.0% 6.6%

Geographical Profile (% of GLA)

Geographic Profile (% of Market Value)

Overview – Geographical Analysis (excl. Rest of Africa JV)

23

57%32%

6%5%

Gauteng

KwaZulu Natal

Western Cape

South Africa: Other

Dec 2015

59%

34%

5% 2%

Dec 2016

56%

35%

6% 3%

Gauteng

KwaZulu Natal

Western Cape

South Africa: Other

Dec 2015

60%

30%

5%5%

Dec 2016

Overview – Sectoral Analysis (Afhco)

24

50 Properties

GLA 223,121m2

Market Value R2.6bn

Weighted average capitalisation rate 9.7%

Afhco also owns residential bulk of 79,925m2 to be redeveloped

Retail /

Commercial

32%

(Dec-15: 37%)Residential

68%

(Dec-15:

63%)

By GLA

Overview – Tenant Grading by GLA – Traditional portfolio

25

“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

A

62%

B

29%

C

9%

Total Portfolio

64%

57%

61% 62%

30% 28%

21%

29%

6%

15%18%

9%

0%

10%

20%

30%

40%

50%

60%

70%

Industrial Retail Commercial Total

per sector

A B C

Property PortfolioAcquisitions, Disposals and Developments

26

Disciplined investment strategy across multiple channels.

1,758 811 1,949 292 434

9.3%10.1% 10.6%

8.6%

7.4%8.1%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

-

500

1,000

1,500

2,000

2,500

CommittedDevelopments

Acquisitions ContractedAcquisitions

Disposals Contracted andunconditional

disposals

Group WACC

Cost / Carrying Value (Rm) Selling Price (Rm) Yield forecast 1st 12 months Exit yield on sales price

Executed Acquisitions

27

# Includes R4.2m in respect of land for development* Properties acquired for redevelopment^ Acquired through the acquisition of shares in subsidiaries

Property SectorForward Yield %

Purchase price (R000)

Expected transfer

Normandie Court, Johannesburg CBDRetail &

Residential 11.0 22,960 Jan-16

Cambridge House, Johannesburg CBD Retail 10.0 20,223 Feb-16

Morning Glen Shopping Centre, Sandton Retail 9.6 293,500 Mar-16

81 Rissik, Johannesburg CBD ^Retail &

Residential 10.7 75,700 Jul-16

Platinum Place, New Doornfontein ^Retail &

Residential 9.9 90,600 Jul-16

Hartmann and Keppler, DoornfonteinRetail &

Residential * 6,200 Aug-16

Jabulani Mews, Soweto Residential 10.9 70,220 Oct-16

Greatermans, Johannesburg CBD ^Retail &

Residential 10.4 114,296 Nov-16

Jeppe Street Post Office, Johannesburg CBDRetail &

Residential * 88,200 Dec-16

Rosewood and Beechwood, Randfontein # Residential 11.0 29,302 Dec-16

Total 10.1 811,201

Contracted Acquisitions

28

* Transferred# Land/Bulk to be acquired for development@ Includes delayed transfer of Real right of extention amounting to R1.3m^ Some portions already transferred

Contracted and unconditional

Contracted and conditional



Expected transfer

51 Pritchard, Johannesburg CBD Retail 11.0 175,000 Apr-17

Northgate Heights Phases 2-3, Northgate Residential 11.0 58,582 Jun 18 - Aug 18

African City Retail Phase 1, Johannesburg CBD Retail 10.0 40,313 Apr-17

Total 10.9 273,895



Expected transfer

Steelport Residential, Steelport Residential 10.3 79,781 * Jan-17Friendship Town, Midrand Residential 11.0 72,247 * Feb-17Reef Acres, Springs @ Residential 10.0 44,727 * Feb-17Long Street Precinct Bulk, Jeppestown Residential # 37,500 ^Feb-17 - Sep-17M&T Development - Burgundy, Centurion Residential 10.0 75,778 Mar-17M&T Development - Minuet Phase 1-2, Midrand Residential 10.0 48,709 Mar 17 - Apr 17

Monis, Johannesburg CBD Retail &

Residential 10.1 62,700 Jun-17Calgro developments Phase 1-5, Various Residential 10.8 811,720 Jul-17 - Sep-18M&T Development - Etude Phase 1-6, Midrand Residential 10.0 252,347 Aug-17 - Aug-18Panama House, Johannesburg CBD Residential 10.5 98,000 Sep-17Northgate Heights Phase 1, Northgate Residential 11.0 57,476 Sep-17Milnerton, Cape Town Retail # 22,500 Apr-17Erand, Midrand Residential # 12,100 May-17

Total 10.5 1,675,585

29

Disposals

Contracted and Unconditional Disposals

@ 25% Undivided share# Sale of 50% undivided share; Exit yield calculated on sales price plus anticipated

defensive capex^ Transferred

Executed Disposals

Property SectorExit Yield

%Purchase price

(R000) Transfer date

8 Paul Smit Street, Anderbolt Industrial 8.8 50,000 Feb-16

Checkers, Somerset West Retail 7.1 75,000 Feb-16

4 School Road, Pinetown Commercial 5.3 25,500 Mar-16

11 Columbine Place, Red Hill Industrial 7.8 55,000 May-16

50 Mangosuthu Highway, Umlazi @ Retail 8.9 12,236 May-16

83 Heidelburg Road, City Deep Industrial 7.5 36,000 Jun-16

199 North Ridge Road, Morningside Commercial 6.2 38,400 Aug-16

Total 7.4 292,136

Property SectorExit Yield

%Purchase price

(R000)Expected transfer

35 Circuit Road, Westmead Industrial 7.6 15,000 ^ Jan-17

Lebombo Road, Garsfontein (portion) Commercial 6.2 12,000 Mar-17

Pine Crest Shopping Centre, Pinetown # Retail 8.2 406,500 Mar-17

Total 8.1 433,500

Lease renewals - % Rental Reversions

30

-1.9%

6.0%

-0.7%

2.3%

7.8%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

Industrial Retail Commercial Total (excl. AFHCO) AFHCO Retail /Commercial

12 months to December 2016

Contracted rental escalation profile

31

8.0%7.7%

8.1% 7.9%

9.0%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

Industrial Retail Commercial Total (excl AFHCO) AFHCO Retail /

Commercial

Afhco residential rental increases of 8% to 9%

Group lease expiry – Traditional Portfolio

32

Vacancies Monthly 2017 2018 2019 2020 2021+

% of GLA 2.7% 6.3% 20.7% 20.2% 12.0% 9.5% 28.6%

Cumulative 2.7% 9.0% 29.7% 49.9% 61.9% 71.4% 100.0%

2.7%

6.3%

20.7% 20.2%

12.0%

9.5%

28.6%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

% o

f G

LA

Group lease expiry – Afhco Retail / Commercial

33

Vacancies Monthly 2017 2018 2019 2020 2021+

% of GLA 3.4% 7.5% 24.4% 11.5% 10.7% 17.3% 25.2%

Cumulative 3.4% 10.9% 35.3% 46.8% 57.5% 74.8% 100.0%

3.4%

7.5%

24.4%

11.5%10.7%

17.3%

25.2%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

% o

f G

LA

Vacancy profile - % of GLA (Traditional Portfolio)

34

1.4%

5.9%

12.7%

3.7%

0.3%

4.5%

11.1%

2.3%

1.1%

4.5%

8.8%

2.7%

0%

4%

8%

12%

16%



Office vacancy analysis

35

Office subsector GLA (m2)% of total

GLA Vacant GLA% Vacancy of

GLA type% Vacancy of total

Office GLA

Stand Alone Office 58,800 68,5% 2,306 3,9% 2,7%

Retail Office 19,770 23,0% 5,219 26,4% 6,1%

Hospitals 7,265 8,5% - - -

Total 85,835 100% 7,525 8.8% 8.8%

Vacancy profile - % of gross rental (Traditional Portfolio)

36

1.2%

3.4%

7.8%

3.1%

0.3%

2.8%

8.0%

2.4%

0.9%

3.3%

5.4%

2.5%

0%

3%

6%

9%

12%



Vacancy profile - % of GLA (Afhco)

37

1.8%

7.9%

6.1%

4.8%

5.6%5.3%

3.4%

10.4% (Standing* 9.6%)

8.7%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Retail / Commercial Residential Total


*Vacancy as at end February 2017 on the same standing portfolioreduced to 5.5%

Afhco residential - Number of approved applications per week for Jan and Feb 2017

38

Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8

69 67 53 138 167 129 70 119

0

20

40

60

80

100

120

140

160

180

No

. of

app

rove

d a

pp

licat

ion

s p

er

we

ek

Applications by Week

Expense ratio analysis

39

36.5%35.0% 34.5% 33.8%

14.2% 14.3% 13.7%12.3%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Dec 2013 Dec 2014 Dec 2015 Dec 2016

Property expense ratio Property expense ratio excluding municipal expenses

Property expense categories

40

Advertising 1.9%

Bad Debt 1.1%

Cleaning & Security 10.0%

Municipal Expenses63.5%

Insurance 1.3%

Legal Expenses1.0%

Letting Expenses2.6%

Maintenance 5.4%

Sundry Expenses2.2%

AFHCO property management 6.1%

Property Management Fee

4.9%

Property Arrears and Provisions

41

Tenant Debtors And Provisions Dec-16 Dec-15 Dec-14

Total Trade Receivables

Trade receivable before bad debt impairment (Incl. VAT) 57,378 55,211 36,392

Provision for bad debts (22,881) (29,909) (21,080)

(excluding debtors with credit balances) 34,497 25,302 15,312

Provision for bad debt

Opening balance 29,909 21,080 27,921

Amounts written off during the year (12,069) (7,335) (17,218)

Additional net provision recognised 5,041 16,164 10,377

Closing balance 22,881 29,909 21,080

Provision VAT inclusive 26,084 34,096 24,031

Ratios

Provision as a % of total trade receivable 39.9% 54.2% 57.9%

Provision as a percentage of rental income 1.3% 1.8% 1.5%

Trade receivables as a percentage of rental income 2.8% 3.0% 2.3%

UNLOCKING VALUE IN THE RETAIL PORTFOLIO RORY MACKEY

Super regional & community returns similar over long term – despite super regional’s relatively low income return

43

13.6

14.5

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

TOTAL RETURN %

Super Regional Community

6.4

9.6

5.0

6.0

7.0

8.0

9.0

10.0

11.0

12.0

INCOME RETURN %


6.8

4.6

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

CAPITAL GROWTH %


Source: MSCI : Nov 2016

Since 2012, super regional and community trading performance has been counter cyclical. Super regional retailers cost of occupancy has increased.

44

0.0%

12.1%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

12 13 14 15 16

ANNUALISED TRADING DENSITY GROWTH


4

5

6

7

8

9

10

11

11 12 13 14 15 16

GROSS RENT TO SALES RATIO



Smaller format retail performance driven by food category with substantially higher trading density

45

0.0

5.0

10.0

15.0

20.0

25.0

30.0

Apparel Department

Stores

Food

% OF GLA


0.0

10,000.0

20,000.0

30,000.0

40,000.0

50,000.0

60,000.0

Apparel Department

Stores

Food

ANNUALISED TRADING DENSITY



Retail Redevelopments

46

PropertyEstimated Cost

(Rm) @ Yield %

East Point 492 9.0

Comaro Crossing 60 10.0 (Budgeted 8.0)

Stellenbosch Square 24* 11.0

Umlazi Mega City (Phase 1 & 2) 220* 9.3

Completed Subtotal 796 9.2

Hayfields Mall 37 9.0

Umlazi Mega City (Phase 3) 43* 9.3

Midway Mews 33 8.7 (ex Def capex – 9.5)

Cambridge Crossing 47 9.1 (ex Def capex – 11.5)

Kempton Park 71 10.0

51 Pritchard Street^ 25 11.0

Current Redevelopments Subtotal 256 9.6

Total Redevelopments 1,052 9.3

* Represents SA Corporate ownership portion of development costs^ Transfer pending @ Includes capitalised interest

Morning Glen redevelopment currently in planning

Performance of Retail Redevelopments

47

Property Date GLA Increase Increase in Sales

Bluff Towers Dec 15 13.2% 27.2%

Stellenbosch Square Mar 16 12.1% 29.1%

Comaro Crossing Nov 16 5.5% 18.1%

Cambridge Crossing Redevelopment

48

• Aesthetic upgrade to property• 1,633 m² additional GLA created

Introduction of enhanced services and food tenant mix to high density residential node of Paulshof

Acquisition & Redevelopment of 51 Pritchard Street Edgars building (15 039m2 ) opposite Stuttafords

Acquisition Cost = R175 million

Yield = 10.3%

49

Redevelopment Estimate = R25 million @ 11%

Downscaling of Edgars from 14’000 sqm to 6’000 sqm

Expected Acquisition + Development Yield = 10.5%

50

• 380kW Peak System• Cost – R5.9m• 3 Month Savings – R252 813

Comaro Crossing Midway Mews

New Projects Size (kW) Cost (Rm) Yield (%)

Montana Crossing 900 9.9 14.2

Willow Way 400 4.5 14.5

Rhodesdene 200 2.8 13.1

• 200kW Peak System• Cost – R3.1m• 3 Month Savings – R146 012

Green Initiatives – Rooftop Solar Photovoltaic Installations

51

Recycling Capital in the Retail Portfolio

# - 50% undivided share; Exit yield calculated on sales price plus defensive capex

* - 25% Undivided share^ - 50% Undivided share

Cost (Rm) Yield

Completed Developments 796 9.2

Developments in Progress 231 9.3

Acquisition of Morning Glen 294 9.6

Acquisition & Redevelopment of 51 Pritchard Street 200 10.5

Total 1521 9.5

Property Transfer

Gross Selling

Price (Rm))

Exit yield on

sale price (%)

Pine Crest Shopping Centre, Pinetown # Mar-17 407 8.2

50 Mangosuthu Highway, Umlazi * May-16 12 8.9

Checkers, Somerset West Feb-16 75 7.1

Middelburg Pick n Pay, Middelburg Sep-15 24 8.3

The Boulevard, Melville Apr-15 31 7.4

Stellenbosch Square, Stellenbosch ^ Feb-15 40 7.8

Philani Valley Shopping Centre, Umlazi Nov-13 41 3.5

The Ridge, Roodepoort Mar-13 30 9.0

Clubview Corner, Pretoria Jan-13 27 8.4

425 West Street, Durban Jan-13 55 10.0

Total disposals 742 8.0

ZAMBIAN PORTFOLIO PERFORMANCERORY MACKEY

Zambian Portfolio Performance

East Park Mall Acacia Office Park Jacaranda Mall

53

Physical address Cnr Thabo Mbeki and Great East Road, Lusaka

CategoryRetail

% of total property value 62.6%

GLA (m2)28 780

TenancyMulti-tenanted

Major tenants Pick n Pay, Edgars, Food Lovers, Builders Warehouse, I-Store, Toys R Us, MTN

National tenants by GLA (%) 66.0%

Lease expiry by revenue (years) 2.4 Years

Vacancy by GLA (%)0.3%

Weighted average gross rental / m² (USD) 14.0

Weighted average escalation (%) 3.1%

Cnr Thabo Mbeki and Great East Road, Lusaka

Office

22.2%

12 488

Multi-tenanted

First National Bank Zambia, Ecobank Zambia, United Bank for Africa, Huawei Technologies

81.0%

2.9 Years

4.7%

17.5

3.3%

Cnr Kabwe and Mushili Road, Ndola

Retail

15.2%

14 539

Multi-tenanted

Pick n Pay, FurnMart, Carnival Furniture, Zamjoy, Pep,MTN

34.1%

3.9 years

25.7%

4.9

2.1%

* Excludes extended area under development# High vacancies were a result of a strategic initiative whilst a potential redevelopment opportunity was being pursued. A change in strategy for this building has seen 2,215m2

let in January 2017, reducing the Zambian portfolio retail vacancy to 3.7%

*

#

BUILDING THE AFHCO BUSINESSRORY MACKEY

Afhco presence in the Johannesburg Inner City

55

Newly acquired bulk

56

Building No. of units Retail m²Construction costs (Rm)

Yield

Jeppe Post Office 550 14,000 276 11.0%

Hartmann & Keppler 109 - 40 11.0%

Long Street Precinct 1,150 - 599 11.0%

Randfontein 156 - 69 11.0%

Totals 1,965 14,000 984 11.0%

TAXI RANK JR 212

TAXI RANK JR 050

SITE LOCATION

Long Street Precinct, Jeppestown

57

SOCIAL INFRASTRUCTURE

58

JHC

HOUSING

SOCIAL HOUSINGSECTIONAL TITLE HOUSING

TRAIN

STATION

SITE PLAN

59

SITE PLAN

1, 178

UNITS

60

61

Long Street Precinct Visuals

Partnered Developments

62

* Redevelopment of vacant offices^ SA Corporate has 51% share

Partner Development No. of units Retail m2 Acquisition (Rm) Yield Completion date

M&T Development Burgundy, Centurion West 121 - 76 10.0% Mar-17

M&T Development Minuet, Midrand 71 - 49 10.0% Mar-17 to Apr-17

M&T Development Etude, Midrand 384 - 252 10.0% Aug-17 to Aug-18

Collier Morgan Panama House 221 733 98 10.5% Sep-17

OTL Developers Northgate Heights 146 - 116 11.0% Sep-17 to Aug-18

OTL Developers 252 Montrose* 156 - 99 10.6% Feb-18

Calgro M3 ^ South Hills 892 - 232 10.8% Jul-17 to Sep-18

Calgro M3 ^ Portion 4 and 5 Jabulani 288 - 53 10.8% Jul-17 to Nov-17

Calgro M3 ^ Scotsdene 844 - 137 10.8% Jul-17 to Sep-18

Calgro M3 ^ Fleurhof Ext 11 828 - 162 10.8% Jul-17 to Sep-18

Calgro M3 ^ Belhar 1,000 - 228 10.8% Nov-17 to Sep-18

Total 4,951 733 1,502 10.6%

63

Diversifying the Residential Footprint

* SA Corporate has 51% share

STRATEGY & PROSPECTSRORY MACKEY

Strategy & Prospects

65

In 2016, through proactive asset management interventions and focussed operational management, SA

Corporate has positioned its property portfolio to generate sustainable and defensive income whilst

establishing a pipeline for growth.

In particular:

• The company’s rejuvenated retail portfolio is set on a growth trajectory which will be complemented

by the repositioning and redevelopment of a number of newly acquired and currently owned

shopping centres.

• AFHCO has entrenched itself as a dominant trusted residential rental brand of choice providing

quality and affordable accommodation in the Johannesburg inner city. This established residential

rental platform is now well poised to diversify its geographic spread in high demand nodes through

strategic partnerships with the largest developers of residential property in the country.

• The sustained low vacancies in the industrial portfolio evidences the quality and resilience of these

properties which will continue to generate strong annuity income through focussed tenant retention,

tenant-driven improvements and recycling capital.

The Board’s view of future prospects is that distribution growth of between 6% and 8% for the 2017 year

can be anticipated.

ACKNOWLEDGMENTS

QUESTIONS

sa corporate december 2012 year end results presentation

Documents