ANNUAL RESULTS Presentation overview Rebosis highlights Sisa Ngebulana New Frontier results Mike Riley Ascension results Kameel Keshav Rebosis results Sisa Ngebulana 02 1
Key Rebosis Highlights Distribution growth of 11% Assets under management growth of 29.5% Consolidated assets of R15 billion* Net property income growth of 8.0% Total return in UK New Frontier Investment 34.6% Cost to income ratio reduced by 3% Successful acquisition of Ascension B units Strategic Rand hedge investment in New Frontier 03 * Post year end acquisitions in New Frontier increases this to R17 billion NEW FRONTIER LIMITED Presented by Mike Riley (CEO) COOPERS SQUARE, BURTON-ON-TRENT, UK 04 2
UK retail overview UK consumer confidence is at its highest since 1990 s (GfK) GDP growth forecast to be >2.5% for the next two years UK population forecasted growth by 2m or 4% by 2020 Unemployment 5.4% forecast to fall to 5.1% by 2020 Evidence of real wage inflation with 3.1% YoY real wage growth June to August Retail sales volumes are expected to rise by 4.5% in 2015 (Capital Economics) 05 Investment strategy Geographically dominant UK retail centres Minimum size of 160 000 ft² Asset management opportunities Quality and location of asset Tenant quality, tenure and sustainability thereof Conversion to UK REIT JSE main board listing 06 3
Key highlights Annualised Distribution Yield 7% GBP Annualised Net Income 3.2% above forecast Void costs reduced by 9.0% 100% Retention on lease expiries 5.1% Above valuation ERV on core lettings 14 new leases Currently under offer 07 Financial Highlights For year ended 31 Aug 2015 Distribution 3.05p Assets under management ( m) 180.23 * Net property income ( m) 5.37 Occupancy 94.9% Cost to income ratio 15.1% Gearing/LTV 57.7% Cost of debt 3.38% ** Dividend yield ( ) 7.0% Dividend yield (R) 8.1% 08 * Post year end assets under management 281m ** 80% Fixed for 5 years 4
Distributable Income Statement For year ended 31 Aug 2015 m Property income 5.33 Property Expenses (0.81) Admin Expenses (0.46) Other Income 0.04 Net Income 4.1 Net finance costs (1.36) Distributable earnings 2.75 Number of shares 104,389,880 * Distribution yield 7.0% Total distribution for period 3.05p ** * Post period shares issued 48 384 870 09 ** Distribution includes post period shares issued (Cum Div) Balance sheet extracts For year ended 31 Aug 2015 m Investment property 180.23 Derivate financial instrument 0.17 Current assets 7.64 Total assets 188.04 Interest-bearing borrowings 102.97 Current liabilities 3.69 Shareholders equity 81.345 NAV 0.78 Shares in issue at year end 104,389,880 Shares in issue at results 152,774,750 10 5
Combined income analysis Burton & Middlesbrough Portfolio key features Income by covenant type Equity Raise Valuation 179 million 31 August 2015 accounts valuation 180.2 million Number of assets 2 Number of letting units 165 Total Gross Lettable Area 789,479 ft 2 Property NIY 6.55% Property RY 6.32% Property EY 6.38% WAULT Certain 10.08 years 88% Car Park Government / LA Local Retailer Mall Commercialisation National Multiple Regional Multiple WAULT to expiries 10.46 years 11 Combined income analysis Burton & Middlesbrough Occupier Portfolio key features Percentage of Income Total income No. of Units Boots UK Ltd 8.38% 1,144,323 4 New Look 6.90% 943,000 2 Top Shop 4.18% 571,000 2 Marks & Spencer 4.02% 549,000 1 Other Major tenants by income Boots UK Ltd New Look Top Shop Marks&Spencer BHS Ltd WH Smith Car Park Income BHS Ltd 3.76% 514,000 2 WH Smith 3.70% 506,150 2 Rental value per square foot (ft²) Car Park Income 3.20% 437,103 2 Other 65.86% 8,998,110 Burton 15.76 Middlesbrough 14.29 Market rate overall 15.02 12 6
Portfolio analysis Weighted Average Unexpired Lease Term (WAULT) 18 16 14 14,95 14,31 WAULT Certain, yrs WAULT to expiry, yrs 12 10 10,08 10,46 8 6 6,37 6,25 4 2 0 Burton Middlesbrough Combined 13 Portfolio analysis Burton & Middlesbrough Gross rental income lease to expiry 45% 40% 39,66% 35% 30% 25% 24,35% 20% 15% 13,31% 10% 5% 3,95% 8,88% 5,27% 6,29% 2,23% 0% Vacant < 1 yr 2017 2018 2019 2020 2021 >2022 14 7
Property highlights Coopers Square, Burton-on-Trent, Staffordshire, UK Lettings and lease renewals including: Boots, Superdrug Clarke s Shoes NEXT to upsize and relocate to new anchor store Chapel acquisition and negotiations with national retailer underway Conversion of temporary to permanent lettings due to good tenant performance 15 Property highlights Cleveland Centre, Middlesbrough, UK Retention of HMV H&M store expansion negotiations underway New 140 room Holiday Inn F&B units opportunity New letting to fashion discounter Pep & Co Healthy pipeline of units under offer which allows scope to increase income and reduce void costs Ongoing discussions with Poundworld for merger of 3 units 16 8
Portfolio analysis post year end Portfolio Key Features Portfolio Value 282 million Number of assets 3 Number of letting units over 225 Total retail sales area 1,091,416 ft 2 Portfolio Gross Rent Roll 20,6 million Portfolio Market Rent 18,4 million WAULT Certain 9.3 years WAULT To Expiries Income by Covenant Type 9.8 years Car Park Major Tenants by Income Occupier Others % of Income Car Park Income New Look Boots UK Ltd Debenhams H & M Top Shop Marks & Spencer Total Income No. of Units Car Park Income 6.58% 1,358,414 3 85% Government / LA Local Retailer Mall Commercialisation National Multiple Regional Multiple New Look 6.46% 1,333,000 3 Boots UK Ltd 5.94% 1,226,823 5 Debenhams 3.11% 641,392 1 H & M 2.98% 615,000 2 Top Shop 2.77% 571,000 2 Marks & Spencer 2.66% 549,000 1 Others 69.50% 14,344,754 17 Outlook Robust UK GDP growth to continue Continued real wage growth and falling unemployment Backdrop for rental growth and yield compression Increased tenant demand for quality retail space Continue with value and yield enhancement acquisitions Dividend growth forecast of 7% - 9% 18 9
ASCENSION PROPERTIES LIMITED LOWER BURG STREET, CAPE TOWN 19 Key Highlights Annualised distribution growth of 10.3% Net property income growth of 10.0% Vacancy decreased to 5.8% (June 2014: 8.5%) Assets under management of R3.8bn Cost to income ratio 11.8% 20 10
Financial Highlights Two months as at 31 August 2015 Twelve months as at 30 June 2015 Distribution AIA 7.33 cpu 41.90 cpu Distribution AIB 4.56 cpu 24.81 cpu Market capitalisation R2,649 bn R2,919 bn Assets under management (R 000) 3 832 400 3 832 400 Net property income (R 000) 69 075 376 852 Cost to income ratio 11.8% 11.8% Occupancy 94.2% 93.5% Gearing 40.0% 38.1% Weighted average cost of debt 8.1% 8.1% 21 Distributable Income Statement Two months as at 31 August 2015 R 000 Property income 67 362 Property Expenses (5 341) Admin Expenses (4 738) Other Income 36 Net Income 57 319 Net finance costs (17 511) Distributable earnings 39 808 Number of A shares 308 860 859 Number of B shares 376 359 014 Total A dividend for the period 7.33c Total B dividend for the period 4.56c Annualised distribution growth: A shares 5.0% Annualised distribution growth: B shares 10.3%* 22 * 21% when compared to H1 2015 11
Distribution growth history of B shares cpu 30,00 25,00 20,00 20.2% 22,59 9.8% 24,81 18,80 15,00 10,00 5,00 8,45 10,35 22.6% 10,36 18.2% 12,23 8.9% 11,28 10.6% 13,53 10.3% * 4,56 0,00 Dec 2012 Jun 2013 FY 2013 Dec 2013 Jun 2014 FY 2014 Dec 2014 Jun 2015 FY 2015 Aug 2015 23 * Annualised two months to August compared to full year to June 2015 Balance sheet extracts As at 31 Aug 2015 R 000 Investment Property 3 832 400 Derivate financial instrument 4 021 Current assets 67 409 Total assets 3 903 830 Interest-bearing borrowings 1 563 204 Current liabilities 38 719 Shareholders equity 2 301 907 NAV per A share 545.0c NAV per B share 164.3c Shares in issue at period end A shares 308 860 859 Shares in issue at period end B shares 376 359 014 24 12
Debt expiry profile R million 800 700 600 43.9% 38.0% 500 400 300 200 100 0 Expiry 8.5% 9.6% 0 2016 2017 2018 2019 2020 25 Property portfolio - As at 31 August 2015 OFFICE INDUSTRIAL TOTAL Number of properties 28 1 29 Gross lettable area (m²) 293 111 23 358 316 469 Vacancy (%) 6.5 1.5 5.8 Portfolio valuation (R 000) 3 759 600 72 800 3 832 400 Value per m² (R) 12 827 3 117 12 110 Cap rate (%) 9.4 10.0 9.4 Portfolio by value (%) 98 2 100 Average monthly gross rental R/m² 102.0 47.4 99.1* Average escalation (%) 8.8 7.6 8.6 Weighted average lease period (years) 3.4 3.1 3.6* Net cost to income ratio (%) 11.8 12.6 11.9 26 * Figure impacted by ground floor Retail component of Office portfolio 13
Outlook Continued focus as a government office fund providing a strong sovereign underpin In order to keep A shares listed under the company as a REIT, B shares must also be listed Liquidity required for B shares to be listed New board appointed effective 1 October 2015 Dividend growth forecast of 8% - 10% 27 COMPANY PROFILE AND MILESTONES 28 HARRISON STREET JOHANNESBURG 28 14
Milestones during the past 12 months December 2014 January 2015 February 2015 March 2015 April 2015 August 2015 Bloed Street Mall Bridge link completed below budget Accelerated bookbuild R565m accelerated book-build at R11.90 per unit 2.5 times oversubscribed Ascension Linked Units Commenced process to acquire remaining linked Ascension units New Frontier R1.2 billion initial investment in New Frontier 62% effective control by Rebosis Rating and DMTN Unsecured debt rating of A- Successful debut placement of unsecured bond of R440m Ascension AIB units scheme Successful scheme of arrangement of 100% AIB units in Ascension 59% effective control by Rebosis 29 Company structure at 31 August 2015 100% 100% 59% 62% Rebosis Portfolio Ascension Management Company Ascension Properties Limited New Frontier group of companies 14 Properties 1 Property 4 Properties 28 Properties 1 Property 2 Properties OFFICE INDUSTRIAL RETAIL OFFICE INDUSTRIAL RETAIL 30 15
Distribution growth history cpu 120,00 11.0% 100,00 80,00 7.6% 92,00 8.1% 99,45 110,41 60,00 40,00 3.5% 44,50 11.8% 9.0% 47,50 48,50 7.3% 50,95 8.2% 52,46 13.7% 57,95 20,00 0,00 1H 2013 2H 2013 FY 2013 1H 2014 2H 2014 FY 2014 1H 2015 2H 2015 FY 2015 31 FINANCIAL REVIEW VICTORIA MXENGE, PRETORIA 32 16
Financial Highlights Movement 2015 2014 Distribution 11.0% 110,41 cpu 99,45 cpu Assets under management (R 000) 29.5% 9 847 165 7 603 575 Net property income (R 000) 8.0% 603 812 559 167 Occupancy 96.8% 97.6% Cost to income ratio 13.3% 13.7% Gearing 36.5% 38.0% Cost of debt bps 8.2% 7.9% 33 Distributable Income Statement - Company For year ended 31 Aug 2015 R 000 For year ended 31 Aug 2014 R 000 % Change Net property income 603 812 559 167 8.0% Rental income 797 441 748 566 Net income from facilities management 21 051 17 891 Operating costs (214 680) (207 290) 3.6% Income from acquisitions 158 867 30 904 Asset management fees received 18 891 9 812 Anticipated distribution from listed REIT subsidiary 139 976 21 092 Antecedent interest 62 808 5 421 Administration costs (37 299) (30 116) Net finance costs (216 058) (180 969) 19.4% Distributable earnings 572 130 384 407 48.8% Number of linked units 518 169 396 * 386 531 577 34.1% Distribution per linked unit (cents) 110.41 99.45 11.0% Distribution growth 11.0% 8.1% 34 * Incl. post year end units issued at cum distribution 17
New Frontier Investment - Financial effects Return 10% 9% 8% 7% 6% 7,00% 9,20% 2,20% (R22,4m) 5% 4% 3% 2% 1% 0% Investment Yield Cost of Capital Dilution 35 Net Income Drivers Actual FY 2015 Annualised 9,9% 8,9% 18,3% 11,8% 81,2% 69,9% Rebosis company Ascension New Frontier 36 18
Borrowings For year ended 31 Aug 2015 R 000 For year ended 31 Aug 2014 R 000 Secured borrowings 3 599 485 2 943 841 Facilities available 3 603 018 3 128 726 Average interest rate 8.2% 7.9% Gearing ratio 36.5% 38.7% Debt at fixed rates 73.7%* 75.9% Interest cover 2.9 x 3.2 x DCM (unsecured) % of total debt 12.0% - 37 * Post year end currently at 75.2% Balance sheet extracts - Company For year ended 31 Aug 2015 R 000 For year ended 31 Aug 2014 R 000 % Change Assets under management 9 847 165 7 603 575 29.5% Investment property 7 038 700 6 856 000 2.7% Listed property securities 2 658 501* 597 592 Right to manage - Ascension 149 964 149 983 Interest-bearing borrowings 3 599 485 2 943 841 22.2% Net asset value 6 384 756 4 639 000 37.6% Net asset value per linked unit (R) 12.94 12.00 7.8% (Discount) to net asset value (%) (15.5) (9.6) 61.5% Investment property Ascension New Frontier Right to manage 71% 12% 15% 2% 38 * Effective 59% holding in Ascension Properties Limited and 62% in New Frontier 19
Debt expiry profile - Post year end R billion 2,5 2,0 56.3% As at 31 Aug 2015 Post year end 47.0% 1,5 30.3% 1,0 0,5 16.6% 10.4% 13.1% 14.0% 12.3% 0,0 Expiry 2016 2017 2018 2019 2020 0% 39 Balance sheet extracts - Group For year ended 31 Aug 2015 R 000 For year ended 31 Aug 2014 R 000 Assets under management 14 555 401 7 453 592 Investment property 14 555 401 6 856 000 Listed property securities - 597 592 Interest-bearing borrowings 7 264 441 2 943 841 Net asset value 7 290 959 4 509 751 40 20
PROPERTY PORTFOLIO SUNNY PARK, PRETORIA 41 Property portfolio - As at 31 August 2015 RETAIL OFFICE INDUSTRIAL TOTAL Number of properties 4 14 1 19 Portfolio valuation (R 000) 3 051 000 3 843 200 145 500 7 039 700 Value per m² (R) 18 683 16 556 7 676 16 988 Weighted yield (%) 8.0 8.9 10.0 8.5 Portfolio (%) 43 55 2 100 Gross lettable area (m²) 163 303 232 133 18 954 414 390 Vacancy (%) 3.1 3.2 0 3.2 Average monthly rental per m² 128.1 94.5 62.0 106.1 Average escalation (%) 7.4 8.6 7.0 8.0 Weighted average lease period (years) 4.3 3.6 3.4 4.2 Net cost to income ratio (%) 16.4 11.4 2.9 13.3 42 21
Top 10 properties by value PROPERTY LOCATION GLA m² ACQUISITION DATE COST Rm VALUATION Rm CAP RATE % Hemingways Mall East London 74 668 17 May 2011 1 358 1 553 7.50 Sunnypark Mall Pretoria 27 650 1 June 2013 571 643 7.75 SALU Building Pretoria 30 354 17 May 2011 379 631 8.25 Liberty Building Pretoria 33 885 17 May 2011 394 582 8.50 Bloed Street Mall Pretoria 25 622 25 Nov 2011 342 443 9.00 Victoria Mxenge Pretoria 24 720 24 May 2011 391 436 8.50 124 Main Street Johannesburg 20 818 1 Sep 2013 413 435 9.00 Mdantsane City East London 36 021 17 May 2011 390 412 9.00 189 Schoeman St Pretoria 19 332 1 Sep 2013 258 340 8.50 28 Harrison St Johannesburg 20 984 31 July 2012 211 259 9.50 Total 314 054 4 707 5 734 8.60 Top 10 properties contribute 80.0% of portfolio net income Top 10 properties contribute 82.2% of value Top 10 properties contribute 75.8% by GLA RETAIL OFFICE 43 Leasing activity RETAIL OFFICE INDUSTRIAL TOTAL GLA m² VACANCY m² VACANCY % GLA m² VACANCY m² VACANCY % GLA m² VACANCY m² VACANCY % Balance at 1 September 2014 163 961 6 657 4,1% 251 087 3 300 1,3% 415 048 9 957 2,4% Leases expired (12 months) 16 726 1 793 18 519 Lease renewals (12 months) (14 426) (1 793) (16 219) New lettings - vacant GLA (6 079) (6 079) Lease terminations 2 246 2 246 Warranties expired 4 698 4 698 GLA adjustments (658) (658) Balance at 31 August 2015 163 303 5 125 3,1% 251 087 7 998 3,2% 414 390 13 123 3,2% 44 22
Tenant profile by GLA 35% 30% 33,0% OFFICE INDUSTRIAL RETAIL 25% 20% 15% 12,3% 10% 5% 6,9% 4,6% 3,1% 3,2% 2,5% 2,2% 2,2% 1,8% 0% National DPW* Provincial DPW* Government agent Antalis Shoprite Edcon Woolworths Pick n Pay Foschini Mr Price 45 * Department of Public Works Overall lease expiry profile (by GLA) 120% 100% RETAIL OFFICE INDUSTRIAL TOTAL 100% 80% 60% 40% 20% 0% 43% 42% 41% 21% 19% 22% 20% 13% 15% 15% 15% 7% 9% 9% 8% 31 Aug 2016 31 Aug 2017 31 Aug 2018 31 Aug 2019 Beyond 46 23
Geographic spread Direct properties Eastern Cape Gauteng KwaZulu Natal North West VALUE GLA NET INCOME 3% 2% 4% 3% 3% 3% 28% 27% 24% 67% 66% 70% 47 Trading densities Aug 2014 Aug 2015 RETAIL R/m² 40 000 30 000 20 000 11.5% 11.4% 28 389 28 425 25 458 25 516 27 609 20.5% 33 282 31 542 11.3% 35 107 10 000 0 Hemingways Mall Mdantsane City Bloed Street Mall Sunnypark Mall 48 24
PROSPECTS HOUNDSHILL SHOPPING CENTRE, BLACKPOOL, UK 49 Prospects Portfolio fundamentals remain strong Improved scale and liquidity with Ascension and New Frontier Ascension positioned as government focused fund New Frontier continues to serve well as Rand hedge Retail vacancies reducing on back of good retail performance Distribution growth forecast of between 8% to 10% 50 25