Presentation Transcript

1. INTERIM RESULTS For the 6 months ended 28 February 2010
2. SNAPSHOT
3. REVIEW OF ACTIVITIES
4. NAME CHANGE Redefine Properties Limited Approved at AGM Effective 1 March 2010 Better describes the business Income growth remains the focus
5. RESTRUCTURING All properties are being transferred from subsidiary companies to the listed entity, Redefine Properties Limited Improve and simplify administration and accounting Strengthen unified company culture and brand
6. BEFORE RESTRUCTURING Redefine Income Fund ApexHi Properties Redefine Properties Hyprop Investments Ciref Spearhead Property Holdings Madison Property Fund Managers Holdings Wichford Ambit Properties Madison Property Fund Managers Hyprop Management Company Portion 68 Rivonia Ext 3 Portion 65 Rivonia Ext 3 Terminus Klerksdorp Marble Gold 168 Rapid Dawn 66 Kovacs Investments 201 ApexHi Manco Trust CorovestFundManagers Canal Walk Management Company Wichford Property Management
7. AFTER RESTRUCTURING Redefine Properties Hyprop Investments Ciref CorovestFundManagers
8. SECURITY FOR DEBT Agreements concluded with banks in terms of which excess collateral security has been released Ensures appropriate loan to value ratios Enables released assets to be utilised as security for new debt
9. ISSUE OF LINKED UNITS Redefine linked units are an attractive “currency” Linked units issued at yields lower than the acquisition yields of the properties Increase in number of linked units in issue: Increases market capitalisation Redefine closer to entering Alsi 40 Subsequent to 28 February 2010 new linked units have and will be issued to settle purchase consideration: De Beers property in Johannesburg acquired for R182-million Deneys Reitz building in Sandton acquired for R127-million
10. PROPERTY TRANSACTIONS
11. ACQUISITIONS
12. DISPOSALS
13. LISTED AND UNLISTED SECURITIES Ciref Plc Increased holding from 29% to 71% Purchase of 102 million shares at an aggregate cost of R636-million Exchanged 11% holding in Wichford valued at R249-million for 45 million Ciref shares Corovest Fund Managers Increased holding from 34% to 76% Cost R178-million
14. DETAILS OF UNDERLYING ASSETS
15. PROPERTY PORTFOLIO AT A GLANCE
16. PROPERTY PORTFOLIO
17. SECTORAL SPREAD * Calculated based on let area
18. GEOGRAPHICAL SPREAD Lettable area Gross monthly rental
19. VACANCIES PER SECTOR
20. LEASE EXPIRY PROFILE
21. ARREARS
22. LETTING ACTIVITY
23. LISTED SECURITIES PORTFOLIO * Consolidated by Redefine. On consolidation, this investment has been eliminated and Ciref’s 13% holding in Cromwell, valued at R509,9-million, is reflected as a listed security of the group Redefine owns 76% of Corovest, the asset manager of Ciref and Wichford
24. BORROWINGS * Excluding Ciref and Corovest borrowings, which are ring-fenced Weighted average cost of borrowings 9.31% 58% of debt is fixed Average length of fixes 5 years 8 months
25. INTERIM RESULTS
26. RESULTS INCLUDE… First set of results for a 6 month period for the merged Redefine, ApexHi and Madison Ciref consolidated for 1 month Corovest Fund Managers consolidated for 5 months
27. FINANCIAL HIGHLIGHTS Total distribution of 33.50 cents per linked unit for the 6 months ended 28 February 2010 Total tangible assets R27,3-billion Market capitalisation R20,1-billion
28. ABRIDGED INCOME STATEMENT
29. ABRIDGED BALANCE SHEET * Includes properties held for trading and excludes properties sold but not transferred # Includes Ciref ^ On consolidation, this investment has been eliminated and Ciref’s 13% holding in Cromwell, valued at R509,9-million, is reflected as a listed security of the group
30. UNIT PERFORMANCE
31. UNITHOLDER PROFILE Increased interest from a wider group of investors such as tracker funds and international investors International investment increased from 0,5% pre merger to 7,5% currently Holders of 5% or more of the total number of linked units in issue
32. REDEFINE CLOSING PRICES High: 802c At 28 Feb: 758c Low: 692c
33. INDICES AND RATINGS Global Property Research (GPR) 250 Index Largest South African listed property company on the index Mid Cap segment of the MSCI Global Standard Index Upgraded from Morgan Stanley’s MSCI Global Small Cap Index In terms of the rules, automatic entry into the ALSI40 Index can only take place once Redefine reaches position 34 (currently position 39) Fitch has reviewed and affirmed Redefine’s: National Long-term secured debt rating of ‘A(zaf)’ National Long-term unsecured debt rating of ‘BBB(zaf)’ Subordinated debentures rating of ‘BB(zaf)’ Outlook revised from “positive” to “stable”
34. STRATEGY
35. HYPROP Agreement signed with Coronation Asset Management to purchase 19,7 million units in Hyprop at R50 per unit Increase stake from 33% to 45.2% Subject to Redefine unitholder and Competition Authorities approval On implementation, the deal triggers a mandatory offer to Hypropunitholders who can either: Sell their Hyprop units to Redefine at a price of R50 per unit Retain their Hyprop units Offer from Redefine to Hyprop unitholders may be varied to include a Redefine linked unit alternative Funding for the Coronation transaction and the mandatory offer has been secured from Rand Merchant Bank and ABSA Competition Commission filing lodged
36. EFFECTS OF THE HYPROP DEAL Unique opportunity to secure extremely attractive assets Redefine is familiar with the portfolio Improve the quality of the Redefine portfolio 100% of the units in Hyprop not owned by Redefine represents 20% of Redefine’s total assets Minor dilution in Redefine’s earnings in the year to August 2010, a positive contribution for the year to August 2011 and neutral in 2012 Objective is to gain control of Hyprop Between “50% plus one share” and “100%”
37. CIREF Proposed inward listing not approved by South African Reserve Bank (SARB) as Treasury is reviewing policy on inward listings
38. PROPERTY MANAGEMENT Decision to internalise property management Effective from the date of termination of the Broll agreement (November 2010) Savings of about R30-million expected in 2011 Management Pieter Strydom appointed as general manager Aaron Suckerman appointed as financial manager. Management and staff will be recruited IT infrastructure New state of the art IT system being implemented to integrate with accounting system
39. OTHER FOCUS AREAS Refine the property portfolio Evaluate every property Disposals where appropriate Consider earnings enhancing acquisitions Joint ventures Assess current joint ventures and plan exit strategy Mergence / Dipula Assess and improve BEE status Distribution policy Obtain unitholder approval for two distributions per annum Odd lot offer Obtain unitholder approval for offer to purchase linked units from holders of less than 100 Redefine linked units to reduce size of register
40. PROSPECTS The forecast distributions per linked unit for the six months ending 31 August 2010 have been based on: distributable earnings for the six months ended 28 February 2010 allowance for contractual growth in income, reduced to take account of the failure of Queensgate as a tenant lower than expected dividends from Ciref reduced fee income. As a result, distributions for the year ending 31 August 2010 are expected to be between 65.5 cents and 67.5 cents per linked unit. This forecast has not been reviewed or reported on by the auditors.
41. QUESTIONS