GROWTHPOINT RETAIL PORTFOLIO UPDATE Standard Bank Investors Conference: 26 November 2014 Key Performance Indicators VACANCIES RETAIL PORTFOLIO VACANCY GLA 904,467m² VACANCY 38,793m² Loss of potential Rental 4.29% R4.7mil p.m. TOP 15 (80% by value) GLA 606,411m² VACANCY 17,748m² 2.90% VACANCY Excl. GLA UNDER DEVELOPMENT 11,868m² 1.96% NEW FINALISED LETS 3,409m² VACANCY BREAKDOWN OFFICE GLA 10,574m² UNLETTABLE/UNDER DEVELOPMENT 8,480m² City View ex Action Cricket Lakeside ex Nu Metro River Square – Redevelopment LETTABLE RETAIL GLA VACANT 19,739m² 2.2% PROJECTED VACANCY MOVEMENT CURRENT VACANCY 38,793m² PROPERTY SALES IN PROGRESS -8,756m² Arcadia, Norkem NEW FINALISED LETTING -4,240m² CONFIRMED FUTURE MAJOR VACANCIES 693m² Rental greater than R100k/mth ELLERINES IMPACT 2,872m² Effective 1/12 ELLERINES IMPACT 7,764m² Effective 1/4/15 ARREARS October 2014 TOTAL COLLECTIONS TOTAL ARREARS LEGAL DEPOSITS COLLECTABLE ARREARS Rand 226,707,467 23,062,468 9,268,345 2,609,911 11,184,212 % 10% 4% 1% 5% PROVISION FOR BAD DEBTS 10,257,386 44% ELLERINES COMPONENT NATIONAL RETAILERS RESTAURANTS/FAST FOODS 739,475 R7.3mil R8.2mil Section Heading WRITE-OFF's AS % OF COLLECTIONS Y-T-D 0.20% 2013/14 2012/13 0.20% 0.10% LONG-TERM ARREARS TREND ARREARS Section Heading ARREAS Y-o-Y PROVISION FOR BAD DEBT Y-o-Y LEASING VACANCY MOVEMENTS : 1 July to 31 October 2014 Balance at 1 July 2014 GLA Adjustments Disposals Acquisitions Extensions Leases expired in the period Renewals of expired leases New letting of vacant space Leases terminated Balance at 31 October 2014 Section Heading TOTAL RETAIL GLA 907,604 -3,389 250 904,465 Renewal Success Rate 87.14% Weighted Avg Renewal Growth (by Gross Rental) 6.40% Average Renewal Lease Period 3.75 yrs Weighted Avg. future escalations on renewals 7.31% VACANCY 40,462 -4,232 250 42,613 -37,134 -10,907 7,741 38,793 4.46% 4.29% PROPERTY INCOME TYPICAL SMALL REGIONAL SHOPPING CENTRE INCOME GROWTH MODEL GLA Section Heading NATIONAL ANCHOR COMPONENT NATIONAL RETAILER COMPONENT LINE SHOPS/FRANCHISEES PERCENTAGE LEASES BY GLA EXPIRING PER ANNUM SPLIT 80% IN FORCE LEASES - INCREASE IN INCOME 20% RENEWALS: INC INCREASE Assumptions: No vacancy movement No rent-free periods 35% 35% 30% 20% 2.75% ANCHORS 6.06% 10% 15% 20% 25% 8.02% 9.02% 10.06% 11.06% RENTAL CONTRIBUTION RENTAL ESCALATION 18% 30% 52% 6.50% 7.50% 8% 8.75% NATIONALS 8.50% LINE SHOPS Portfolio Income Growth Section Heading Section Heading PROPERTY INCOME & EXPENSES • Turnover Rental Section Heading • Woolworths • Other • • Parking Revenue Transaction Costs • TI’s • Rent-free periods / BO periods Portfolio Trading Consumer Position • High Income vs. Low & Middle Income markets Section Heading • Relative outperformance but not immune to slowing economy • Credit major differentiator • Consumer Confidence differs depending on exposure to unemployment, strikes and cost pressures • Growthpoint Portfolio position • Risks: • • • • Aspirational shopper disappearing Stock market performance Increasing interest rates Higher personal taxes and VAT increase Changing Consumer Behaviour • Convenience Section Heading • Migration to convenience for food purchases • • • • Stagnant/declining foot counts at most centres Access/parking/lay-out important driver Price/product range differentiation On-line Shopping: • Limitations: • Transaction Processing, logistics, experiential • International Trends • Growthpoint strategy • Connectivity & analytics Section Heading Trading Density 24 Months BROOKLYN MALL 8.2% LA LUCIA MALL 5.6% WALMER PARK 8.1% 5,000 CONSTANTIA VILLAGE 4.4% 4,000 WATERFALL MALL -3.3% KOLONNADE 5.9% WOODMEAD RETAIL PARK 3.8% RIVER SQUARE -1.7% Oct-2012 to Sep-2013 Monthly Turnover / m2 Y / Y % Growth Affluent Oct-2013 to Sep-2014 Solid-Middle 3,000 2,000 1,000 0 Lower-Middle NORTHGATE -1.7% LONGBEACH MALL 11.3% CBD / Commuter LAKESIDE MALL 3.6% ALBERTON CITY 1.3% GOLDEN ACRE 10.2% CITY VIEW 0.3% CITY MALL -2.0% HATFIELD PLAZA -0.5% Section Heading Rental Affordability VALUE (R mil) GLA VALUE / M2 COST OF OCCUPANCY AVE. TRADING DENSITY (12 Months) BROOKLYN MALL (75%) 1,953 56,069 34,839 8.0% 2,759 WATERFALL MALL 1,287 49,228 26,142 7.0% 2,626 LAKESIDE MALL 1,234 67,515 18,270 6.8% 2,068 LA LUCIA MALL 1,066 36,379 29,295 7.3% 2,874 KOLONNADE (50%) 958 37,893 25,292 6.3% 2,828 WALMER PARK 901 43,202 20,858 6.3% 2,430 ALBERTON CITY 877 47,615 18,414 7.5% 2,133 CONSTANTIA VILLAGE 813 20,370 39,926 4.5% 5,792 NORTHGATE (50%) 756 45,329 16,669 10.0% 1,654 WOODMEAD RETAIL PARK 732 54,891 13,328 4.5% 2,831 TOP 10 CENTRES Listed Retailers GLA Ave. Trading Density (12 Months) CHECKERS 23,229 2,817 PICK 'N PAY 73,420 2,625 CLICKS 13,781 3,204 GAME 35,886 2,012 MR PRICE HOME 10,809 1,905 MR PRICE APPAREL 13,717 2,685 FOSCHINI 9,128 1,869 TRUWORTHS 14,293 2,505 WOOLWORTHS 59,066 2,965 Listed Retailers COMPETITION CENTRE ALBERTON CITY RECENT NEW COMPETITION Makro Section Heading POTENTIAL or NEW COMPETITION Newmarket, Mall of the South, Meyerton BROOKLYN MALL Lynwood Bridge, The Club Centre CITY MALL Flamwood Mall, Matlosana Mall KOLONNADE Wonder Park redevelopment Wonderboom Junction extension, WW stand-alone LAKESIDE MALL Carnival Mall extension F&G Centre, Retail Africa Development LONGBEACH MALL Blue Route redevelopment Checkers Centre NORTHGATE Cradle Stone, Cosmo Centre x2 Fourways redevelopment RIVER SQUARE Bentels centre Vaal Mall extension THE AVENUES Carnival Mall extension F&G proposed 60000m2 centre, Springs CONSTANTIA VILLAGE Blue Route redevelopment WALMER PARK Menlyn extension BayWest, Boardwalk extension WATERFALL MALL Platinum Junction WOODMEAD RETAIL PARK Waterfall Lifestyle centre Mall of Africa, Kyalami Checkers Centre Ellerines TOTAL RETAIL EXPOSURE R1,479mil p.m Beares/Dial-a-Bed continuing stores Arcadia, Woodmead, Walerfall Mall, Meadowdale, Brooklyn, Beacon Bay Leases Terminated as at end October Waterfall Value centre, Woodmead, OK Empangeni Leases Terminating end November City View, OK Empangeni, Lakeside Section Heading Rental Losses September 50% R840 000 Expected to be recovered in full Financial Year to end June R3.8mil Woodmead: Geen & Richards re-tenanted Assuming vacating end March 2014 R1.7mil Blackheath: Sold MITIGATING ACTION Brooklyn: Mr Price Sport/ Incredible Connection Amrel: Redevelopment to motor showroom City View: Woolworths Textiles Development ACUCAP/SYCOM Acucap/Sycom • • • Retail Portfolio Assessment Current Developments/extensions Opportunities Section Heading Gardens Centre Howard Centre • Risks Port Elizabeth Kempton Park Hillcrest/Kloof exposure Thank you
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