PowerPoint Presentation · Title: PowerPoint Presentation Author: Marcel van Straaten Created Date:...
Transcript of PowerPoint Presentation · Title: PowerPoint Presentation Author: Marcel van Straaten Created Date:...
INTERIM RESULTS
TO END MARCH 2020
20 MAY 2020
We were on track before lockdown
Environment changed dramatically – guidance withdrawn, interim dividend declaration postponed
Operations & initial collections good
Balance sheet and cash position in good shape
Our priority: safety of staff and tenants, protect company and all stakeholders
We have good tenants that want to stay and pay, they just do not have money at the moment
INCOME6 MONTHS
31 MARCH 2020
YEAR ENDED
31 MARCH 2019VARIANCE
Contractual revenue 275 342 138 265 246 288 3,8%
Net property expenses (94 869 201) (85 779 777) 10,6%
Net property income 180 472 937 179 466 511 0,6%
Administration costs (13 054 029) (9 863 929)
Net finance charges (66 404 218) (49 125 381)
Interest on loan shares
(equal to 'dividend declared')8 125 078 -
Distributable income 109 139 768 120 477 201 -9,4%
Average number of shares in issue 319 356 701 321 351 669
Net expense ratio 34,5% 32,3%
Dividend per share 34,17 37,49 -8,8%
DISTRIBUTABLE
PROPERTY% CONTRACTUAL REVENUE % EXPENDITURE
Gross municipal 26,7 48,9%
Building expenses 8,2 15,0%
Repairs & maintenance 3,3 6,0%
Collection commission 6,4 11,7%
Security 4,8 8,8%
Bad debts 1,0 1,8%
Legal expenses 0,4 0,7%
BC levies 2,8 5,1%
Other property expenses 1,1 2,0%
54,7 100,0%
Less recoveries 20,2
Net property expense ratio 34,5
EXPENSE BREAKDOWN
MUNICIPAL
Electricity
42,1%
21,5%Water
Rates & Taxes
15,5%
15,4%Sewerage
Waste Removal
4,2%
1,3%Gas
PR
IOR
YE
AR
41,4%
22,9%
15,8%
13,7%
5,1%
1,1%
PR
IOR
YE
AR
Municipal
Expenses
48,9%of total
50,2%
80%
79%Recovered
excluding rates
EXPENSES
5 000
4 000
3 000
2 000
1 000
0
Inner City Non-Inner City Total
R 3 915
R 4 712R 4 386
Average
Escalation
v Mar ‘19
(1,3%)
Average
Escalation
v Mar ‘19
1,3%
Average
Escalation
v Mar ‘19
0,4%
ESCALATIONS
INNER CITY NON-INNER CITY OVERALL
AVERAGE
RENTALS
ESCALATIONS
V SEPTEMBER
AVERAGE
RENTALS
ESCALATIONS
V SEPTEMBER
AVERAGE
RENTALS
ESCALATIONS
V SEPTEMBER
ROOMS R 1 810 -0,70% R 1 686 4,20% R 1 723 2,70%
BACHELORS R 2 695 -1,40% R 3 561 2,00% R 2 581 0,30%
1 BED R 3 717 -1,00% R 4 441 0,50% R 4 111 -0,10%
2 BED R 4 598 -2,20% R 5 263 1,40% R 5 066 0,60%
3 BED R 5 155 -0,20% R 7 077 0,70% R 5 874 0,20%
4 BED R 6 031 -1,30% R 11 810 0,10% R 6 881 -1,00%
RENTALS, INNER AND NON-INNER CITY
ARREARS AND BAD DEBTS
2020 2019 2018
MARCH SEPTEMBER MARCH SEPTEMBER
Bad debts &
provisions1,1% 1,0% 0,6% 1,8%
1,2%Arrears 0,9% 0,6% 0,4%
Total 2,0% 1,6% 1,8% 2,2%
I have never been so involved in our tenants personal lives and finances
Credit Controller
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Day 2
Day 4
Day 6
Day 8
Day 1
0
Day 1
2
Day 1
4
Day 1
6
Day 1
8
Day 2
0
Day 2
2
MARCH APRIL MAY
Day 2
Day 4
Day 6
Day 8
Day 1
0
Day 1
2
Day 1
4
Day 1
6
Day 1
8
Day 2
0
Day 2
2
Day 2
Day 4
Day 6
Day 8
Day 1
0
Day 1
2
Day 1
4
Day 1
6
Day 1
8
Day 2
0
Day 2
2
2020 TOTAL 2019 TOTAL APRIL 2020 TOTAL
COLLECTIONS % TOTAL
BALANCE SHEETR
6 MONTHS ENDED
31 March 2020
YEAR ENDED
30 September 2019
Investment property 4 137 056 088 4 175 006 452
Property loan receivable 39 501 514 44 767 070
4 176 557 602 4 219 773 522
Stakeholders’ interest 2 766 212 486 2 901 930 111
Secured financial liabilities 1 496 641 496 1 480 005 758
Shares in issue 319 356 701 321 351 671
Net asset value (cents) 866,18 903,04
Loan to value ratio 34,7% 33,6%
EXTRACT
LOANSLTV 34,7%
Total debt R1,5 billion
Available facilities R93 million
Percentage of drawn down debt hedged 67%
Weighted average cost of debt 8,99%
Cash on hand R23 million
AND GEARING
LOANSEXPIRY
FINANCIAL MATURITY STANDARD BANK ABSA/INVESTEC
YEAR MONTH DRAWN AVAILABLE DRAWN AVAILABLE
September 2020 September 2020 160 000 000 40 000 000
September 2021 April 2021 732 500 000 53 300 000
September 2023 October 2022 604 300 000 -
160 000 000 40 000 000 1 336 800 000 53 300 000
903,04 896,42866,18
40,76 11,036,07 13,33
31,63
2,71
500
550
600
650
700
750
800
850
900
950
1000
NAV –
30 SEPT 2019
NET ASSET VALUEPER SHARE (CENTS)
2,71
Distributable
income
6 months
ended
31 Mar 2020
Share
buyback
Dividends paid
6 months
ended
30 Sept 2019
NAV –
pre
revaluations
Fair value
Derivatives Loans
NAV –
2020Investment
property
Own
9 668 units
Retail
18 834 m2
UNITS
1%Bloemfontein
1,4%vacancy
10%Pretoria
3,1%vacancy
79%JHB
5,7%vacancy
5%Vanderbijl
0%vacancy
1%Durban
10%vacancy
5%Emalahleni
1,8%vacancy
The vast majority of our tenants are good people who want to do the right thing
UNIT LOCATION AND VACANCY RATE
5%JHB South
And Soweto
4,9%vacancy
11%JHB
West Rand
6,0%vacancy
34%JHB Inner
City
4,4%vacancy
5%Vanderbijl
0%vacancy
23%JHB East
9,1%vacancy
6%JHB North
7,2%vacancy5%
JHB CBD
Periphery
8,5%vacancy
11%PTA
Midrand
3,1%vacancy
INFO
RESIDENTIAL UNIT TYPES UNITS % OF TOTAL VACANCIES
Bachelors/rooms 2 165 22 8,8%
1 Beds 1 990 20 6,0%
2 Beds 4 522 47 4,2%
3 Beds 830 9 2,9%
Other 161 2 4,3%
Total 9 668 100 5,5%
TO
TA
L R
ES
IDE
NT
IAL
UN
ITS
TO
TA
L R
ETA
IL m
2
TO
TA
L B
UIL
DIN
GS
PROVINCIALVACANCY RATE
Indluplace 5,5%
DISPOSALSFactors considered include number of units, condition, forecast performance and location
LOCATION
AVERAGE NUMBER OF UNITS PER PROPERTY
NUMBER OF PROPERTIES AGREED BUT NOT TRANSFERRED
NUMBER OF PROPERTIES TRANSFERRED SINCE YEAR END
Mainly
South of Johannesburg
13
13
8
SM
AL
L P
RO
PE
RT
IES
Discussions underway to dispose of student buildings in Vanderbijlpark
ST
UD
EN
TStudent Residence
Trifecta is situated in Durban and lets
to individual students
Disposal price R20 000 000
TR
IFE
CTA
COVID-19
RESPONSE
RAPID ADAPTION
GOOD TENANTS / DIFFICULT TIMES
SITE OPERATIONS
SMME SUPPORT & ECOSYSTEM
Head Office | Property Managers | Site Staff | Tenants
Sensitive collections process (Rehabilitation vs Vacancies)
Payment Holiday (6-month repayment terms)
Tenant by tenant engagement | Deposits
PPE Compliance
Protection of staff and tenants
Housing of security and building staff
Expedited payments to SMME’s
Support SMME suppliers (security, cleaning, contractors etc)
Continues Municipal payments
We have grown to understand more and more in this time that we deal with real people’s lives and
they have real struggles under lockdown
COVID-19
RESPONSE
INCREASED COMMUNICATION
LEASING FRUSTRATIONS
PROPERTY MANAGERS
ASSISTANCE WHERE POSSIBLE & APPROPRIATE
Tenants | Staff | Property managers
Continually changing rules to lockdown levels
Rates of adoption and readiness
Different processes and structures
Good over all response
Food parcels to families in need
Site and security staff
Outsourced to seven Specialist Managers
PROPERTY MANAGEMENT
ON THE EFFECTS OF LOCKDOWN
NEGATIVESIncreased arrears and bad debts - Some tenants affected financially by employers
having to suspend their operations and not able to continue paying salaries /
small entrepreneurs that are not able to operate
Credit control – having to soften our approach with those actually affected while
remaining firm with those that can pay and wanting to take advantage
Tendency to form groups to try and create distance between individual tenants
and property managers
Individuals’ difficulty in obtaining documentation confirming impact of lockdown
Letting activity stopped for April and limited for May
NEGATIVESLimited ability to move struggling tenants to more affordable units
Difficult to vacate non-paying tenants
Competitor landlords offers to tenants; commercial negotiations in the public eye
No evictions currently
Fast changing lockdown rules and unclear regulations
POSITIVESIndluplace is focused on providing homes for working families and therefore playing a vital role in lockdown (staying at home)
Basic need for accommodation during lockdown
Indluplace occupation going into lockdown at best levels for years
Paying rent still priority for most tenants with most deposits still intact
Most tenants thus far able to pay (employed in industries able to operate / pay salaries) although seeing more pressure building
Building operations close to normal (BMs, cleaners live in)
POSITIVESGood adherence to strict lockdown regulations with very few negative incidents
Indluplace team working well remotely and coming up with creative solutions as problems come up
Systems robust e.g. cloud based financial system
Moved even closer to our property managers and their operations
Increased communications with internal team, property managers exec team, funders and other stakeholders
Fast tracking some processes that were underway pre-lockdown
Student head leases stability and good working relationships with NWU and VUT
Reduction in prime rate
On-going support for CIDs, targeted assistance where there is basic need (in our area of operation)
Support SMMEs, protect jobs, keep tenants and staff safe
Time for creative solutions and quick reactions - outsourced model therefore we have collective experience of seven teams of the best in the business
POSITIVES
We have to adapt and respond quickly with solid information. What happened to Skype?
Said during a Zoom meeting
I am worried that we will be feeling the impact of the lockdown for many months to come
Management company owner
Longer lockdown and slower opening than expected
Regulations sometimes confusing but being adapted
“Tail” probably longer than hoped
No opportunity for rental increases this year
FOR THE REMAINDER OF 2020
Difficult to predict even short term
Court backlog after lockdown
Cashflows and balance sheet (LTV) strong
Valuations will be under pressure for everyone
Vacancy increase potential in short term
Council increases
The demand for
value for
money,
professionally
managed rental
residential
buildings
offering a
diversity of unit
types, buildings,
locations and
rentals and
contributing
positively to the
areas of
operation,
remains strong.