october 2012 - dipula income fund roadshow presentation... · 2012-11-01 · prospects 7 │ fy...

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.

2

INDEX

Key investment highlights

Management investment

Share price performance

Prospects

Proposed offer

Acquisitions summary

Debt structure

Property portfolio

New property profiles

3

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

4

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

8

ACQUISITIONS SUMMARY

9

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

10

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

11

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

12

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

13

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

14

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


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 lease escalation: 7.5%

Cost per m2: R9 130

Weighted average remaining lease period: 4.3 years


16

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%



Cost per m2: R6 979



17

Randfontein Shopping Centre

Region: Randfontein, Gauteng

Sector: Retail

Anchors: Shoprite-Checkers

Value: R 46 200 000

GLA (m2): 5 935

Vacancy %: 8%



Cost per m2: R7 784



18

Bushbuckridge Shopping Centre

Region: Bushbuckridge,

Mpumalanga

Sector: Retail

Anchors: Shoprite-Checkers &

Cashbuild

Cost: R 104 180 000

GLA (m2): 16 203

Vacancy %: 0%



Cost per m2: R6 430



19

ABSA Home Loans

Region: Arcadia, Pretoria

Sector: Office

Anchors: ABSA

Cost: R 82 600 000

GLA (m2): 5 048

Vacancy %: 0%



Cost per m2: R16 363



20

SAPS VIP

Region: Sunnyside, Pretoria

Sector: Office

Anchors: Department of Public

Works

Cost: R 229 860 000

GLA (m2): 21 478

Vacancy %: 0%






21

SAPS IJS

Region: Erasmuskloof, Pretoria

Sector: Office

Anchors: Department of Public

Works

Cost: R 118 540 000

GLA (m2): 7 699

Vacancy %: 0%






22

Byron Place

Region: Pretoria, Gauteng

Sector: Office

Anchors: DPW

Cost: R 38 000 000

GLA (m2): 3 270

Vacancy %: 0%






23

Sterkolite Building

Region: Rosslyn, Gauteng

Sector: Specialised

Anchors: DPW

Cost: R 78 000 000

GLA (m2): 12 782

Vacancy %: 0%



Cost per m2: R6 102

Weighted average remaining lease

period:

8 years


24

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


period:

12 years


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%



Cost per m2: R9 992


period:

5 years


26

Melki Portfolio

Region: KZN

Sector: Retail

Anchors: Pick n Pay

Cost: R57 000 000

GLA (m2): 6 900

Vacancy %: 0.5%



Cost per m2: R8 261


october 2012 - dipula income fund roadshow presentation... · 2012-11-01 · prospects 7 │ fy...

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