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AUDITED GROUP RESULTS for the year ended 31 March 2005

AUDITED GROUP RESULTS for the year ended 31 March 2005. Highlights. Maiden distribution and yield exceed prospectus forecast Acquisition of MICC increases property portfolio to +R3 billion Liquidity of linked units significantly improved. History. Listed on JSE on 24 June 2004

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AUDITED GROUP RESULTS for the year ended 31 March 2005

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  1. AUDITED GROUP RESULTS for the year ended 31 March 2005

  2. Highlights • Maiden distribution and yield exceed prospectus forecast • Acquisition of MICC increases property portfolio to +R3 billion • Liquidity of linked units significantly improved

  3. History • Listed on JSE on 24 June 2004 • Promoted by Sanlam, which still holds 59% • Market cap at 31.3.05: R1.4 billion • Gross property value: R3.1 billion • Acquired 74.35% of MICC (as at 31 March 2005)

  4. Objective • To invest in properties with a strong contractual cash flow for long-term sustainability of property income, capital appreciation of linked units and growing income distributions for unitholders

  5. Salient features of results • Net profit of R247.5 million of which R233 million is attributable to unitholders • Final distribution of 31.5 cents per linked unit for total of 61.5 cents (forecast: 60.25 cents) • Yield of 12.3% on issue price (forecast: 12.05%)

  6. Group income statement

  7. Group balance sheet

  8. Group borrowings • The debt funding is provided over fixed periods of between three and five years, with interest only to be serviced over the respective funding periods. • Combined loan to value ratio 41.5% vs bank requirements of: 45% Vukile 57% MICC

  9. The market in 2004/05 • Impact of lower interest rates on discount and capitalisation rates • Property prices driven to new high levels • Buoyant economy boosts occupation levels and rentals • Reduction in inflation restricts escalations

  10. The acquisition of MICC • In line with growth strategy: extends asset base and enhances portfolio’s potential • Equates to acquisition of R740 million property portfolio at reasonable price • Now being managed by Vukile • End game is still to acquire all units

  11. The property portfolio • Vukile: 52 properties with gross lettable area of 676 961m² • MICC: 40 properties with gross lettable area of 395 812m² • Total: 92 properties with gross lettable area of 1 072 773m²

  12. The property portfolio

  13. Vukile property profile Geographical spread - % of GLA

  14. Vukile property profile Sectoral spread - % of gross rentals

  15. MICC property profile Geographical spread - % of GLA

  16. MICC property profile Sectoral spread - % of gross rentals

  17. Vukile tenant profile National tenant groups - % GLA and gross rentals

  18. MICC tenant profile National tenant groups - % GLA and gross rentals

  19. Vukile lease expiries % of gross rentals

  20. Vukile vacancies % of gross rentals

  21. MICC lease expiries % of gross rentals

  22. MICC vacancies

  23. Current focus areas • Enhancement of existing properties to extract maximum value • Debt funding structure (securitisation) • Improvement of Vukile linked units’ liquidity

  24. Enhancement • Property prices currently at very high levels • Consequently, better to redevelop, upgrade and expand existing properties than to buy new ones • Existing portfolio has potential for significant organic growth

  25. Debt funding • Currently investigating securitisation of major portion of long-term debt • Initial indications: significant interest savings possible

  26. Liquidity • Stated strategic objective to extend unitholder base and improve liquidity • Exercise still under way, but progress already made

  27. Liquidity: volumes

  28. Prospects • Market conditions likely to remain favourable • Portfolio enhancement will provide strong foundation for organic rental growth • Barring the unforeseen, real growth in distributions forecast for coming year

  29. Questions ? END

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