PRE-CLOSE BUSINESS - Dipula Income Fund
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Sustainable Property Returns
PRE-CLOSE BUSINESS
UPDATE
FOR THE PERIOD ENDED
28 FEBRUARY 2022
01 BUSINESS
UPDATE
02 CAPITAL RESTRUCTURE
UPDATE
03 QUESTIONS
& ANSWERS
Pre-close business update for the period ended 28 February 2022
01 BUSINESS
UPDATE
14 KRAMER
KRAMERVILLE Pre-close business update for the period ended 28 February 2022
STRATEGY
Remaining Buying Managing
SHAREHOLDER VALUE CREATION disciplined well brilliantly
▪ Geographically diversified
SA OUR VALUE PROPOSITION
▪ Economically active locations
focused
▪ Sectorally diversified
▪ A diversified REIT that is growing, improving and
▪ Predominantly retail (convenience, rural & township)
de-risking its portfolio through employing a range of
▪ Increase industrial exposure value-add strategies including leasing, conversions,
Diversified
▪ Selective office extensions, redevelopments, partnerships and
▪ Affordable residential rental development.
▪ Non-core disposals
Portfolio ▪ Capital recycling ▪ We are focused on our chosen property market
R
segments and continuously reposition our portfolio in-line
optimisation ▪ Acquisitions, developments, redevelopments and
with changing market dynamics.
conversions
▪ Credit quality
Tenant OUR TOOLS
▪ Manage concentration risk
centric
▪ Enhance tenant experience
▪ Value our people
Human ▪ Talent attraction and retention
capital ▪ Teamwork above all
Balance
▪ Resourcefulness A Good Research sheet
competent capital and Focus
▪ Compliance core team allocation analysis manage-
ment
▪ Efficiency
Sustainability
▪ CSI & BEE
▪ Social, economic & environmental
Pre-close business update for the period ended 28 February 2022 4
BUSINESS UPDATE
RIOTS AND COVID-19 UPDATE
BALANCE SHEET & VACANCY MOVEMENT
RIOTS
▪ Properties damaged in the riots substantially trading, ▪ Disposals of R42 million of which R23 million awaits transfer
except for Dobsonpoint Shopping Centre ▪ Capital repayments of R220 million to January 2022
▪ Total damages of R110 million (including loss of ▪ R1.2 billion of debt refinanced for an average period of three
income) years at an average interest rate of 5.99%
▪ R38 million recovered from SASRIA to date ▪ FY2022 debt expiries of R234 million expected to be
COVID-19 refinanced
▪ R50 million loss of income claim ▪ Current interest rate hedging at 78%
▪ No significant tenant rental relief expected ▪ Capex of approximately R300 million excluding looted assets
▪ January 2022 collections averaged 103% with and renewable energy, to be phased sensibly
collections since the start of the pandemic ▪ Vacancies excluding residential, up 2% since year-end, partly
averaging 96% due to re-developments
▪ Half-year performance in-line with guidance
Pre-close business update for the period ended 28 February 2022 5
RETAIL PORTFOLIO
UPDATE LEASING
▪ Good turnovers reported over the festive season NEW LEASES
▪ Social grants still providing good support in the lower LSM ▪ 16 572m² let with an average lease period of 4.4 years
segments ▪ Rentals 0.3% below asking with weighted average escalations
of 6.8%
▪ Not significantly impacted by Post Office and CNA
▪ Proportion of national tenants 72%
▪ Increase in space let to courier and ecommerce operators
RENEWALS
▪ Double anchoring in convenience centres improving
▪ 33 746m² renewed with an average lease period of 3.3 years
turnovers overall
▪ 0.6% negative reversion rate with weighted average
▪ National and second tier retailers still expanding escalations of 6.2%
▪ Some restaurants close to pre-COVID19 trading levels VACANCY
▪ Ecommerce unlikely to significantly affect our portfolio in ▪ Vacancy increased from 9% to 10% (excluding Kerk Street
redevelopment)
the short to medium-term
▪ Growing trend for conveniently located click and collect ▪ Main vacancy drivers are CNA, bank space reduction and the
facilities closure of two gambling outlets in Orange Farm and Vanderbijl
Pre-close business update for the period ended 28 February 2022 6
OFFICE PORTFOLIO
UPDATE LEASING
▪ Residential conversion opportunities at four buildings being NEW LEASES
assessed ▪ 1 281m² let
▪ Average lease period 3.1 years
▪ Collaboration with shared space providers to convert more
space pockets ▪ Rentals 14% below asking
▪ Weighted average escalations 7.6%
▪ Leased space to blue-chip tenants, evidencing some
RENEWALS
return to offices
▪ 16 433m² renewed
▪ Pleased with tenant retention ratio for FY2022 to date
▪ Average lease period 2.6 years
which is well above the prior year with only 500m² vacated
▪ 6.0% negative reversion rate and 9.0% higher than budget
so far
▪ Weighted average escalation 6.8%
VACANCY
▪ In-line with FY2021 at approximately 16.0%
Pre-close business update for the period ended 28 February 2022 7
INDUSTRIAL PORTFOLIO
UPDATE LEASING
▪ Leasing to courier and ecommerce operators NEW LEASES
▪ Increase in enquiries for mini-units ▪ 15 111m² let
▪ Average lease period 3.5 years
▪ Rentals 0.6% below asking
▪ Weighted average escalations 6.8%
RENEWALS
▪ 4 604m² renewed
▪ Average lease period 2.0 years (mainly mini units)
▪ 15.0% negative reversion rate
▪ Weighted average escalation 6.0%
VACANCY
▪ Vacancy excluding redevelopment 2.2% (FY2022: 3.6%)
Pre-close business update for the period ended 28 February 2022 8
RESIDENTIAL PORTFOLIO
LEASING ACTIVITY BY NUMBER OF UNITS
RENEWED NEWLY LET VACANCY TOTAL FY2021 VACANCY
NORWOOD 10 2 - 12 -
PALM SPRINGS 110 202 116 428 124
URBAN VILLAGE MIDRAND 80 59 - 139 11
URBAN VILLAGE BRUMA 65 65 3 133 8
TOTAL 265 328 119 712 143
LEASING ACTIVITY BY NUMBER OF UNITS (%)
RENEWED NEWLY LET VACANCY TOTAL FY2021 VACANCY
NORWOOD 83% 17% - 100% -
PALM SPRINGS 26% 47% 27% 100% 29%
URBAN VILLAGE MIDRAND 58% 42% - 100% 8%
URBAN VILLAGE BRUMA 49% 49% 2% 100% 6%
TOTAL 37% 46% 17% 100% 20%
Pre-close business update for the period ended 28 February 2022 9
IMPROVING OUR PORTFOLIO
PROJECTS
Total Original New
Project Capex GLA GLA /
Property Description (Rm) (m²) Units
Gezina Galleries Additional retail added and general upgrade 51.0 16 670 17 000
7.5
Proteapoint Retail Upgrade and refurb of existing centre 33.5 3 866 7 079
Chilli Lane Facelift 27.0 13 607 Unchanged
Kerk Street, Johannesburg Redevelopment of existing retail 70.0 9 147 Unchanged
Range Road Conversion to mini units 5.0 1 700 Unchanged
Stellendale Greenfields 100.0 - 200 units
Retail Residential Industrial
Pre-close business update for the period ended 28 February 2022IMPROVING OUR PORTFOLIO
PROJECTS CONT.
Total Original New
Project Capex GLA GLA /
Property Description (Rm) (m²) Units
Amandla Blvd, Braamfischerville New anchor 5.0 1 500 Unchanged
7.5
Kroonstad Circle Upgrade and refurb of existing centre 8.5 4 476 5 500
Total 300.0
Excluding looted assets and renewable energy projects
Retail Residential Industrial
Pre-close business update for the period ended 28 February 2022IMPROVING OUR PORTFOLIO
KERK STREET, JOHANNESBURG
Pre-close business update for the period ended 28 February 2022 12IMPROVING OUR PORTFOLIO
KROONSTAD CIRCLE
Pre-close business update for the period ended 28 February 2022 13IMPROVING OUR PORTFOLIO
RANGE ROAD, BLACKHEATH
Pre-close business update for the period ended 28 February 2022 14IMPROVING OUR PORTFOLIO
STELLENDALE, KUILSRIVIER
Pre-close business update for the period ended 28 February 2022 1502 CAPITAL RESTRUCTURE
UPDATE
FIRESTATION
ROSEBANK Pre-close business update for the period ended 28 February 2022CAPITAL RESTRUCTURE UPDATE
Transaction significantly simplified
No capital raise and acquisition of asset
Increased swop ratio with no cash alternative
Scheme expected to be supported by most shareholders
Retain strategic focus on convenience retail and industrial sectors post scheme
implementation
Achieve alignment between all shareholders and management
The expected correction in cost of equity and the achievement of a sustainable
funding model will position the company well for growth
Remain agile, adaptable and even more simplified
Pre-close business update for the period ended 28 February 2022 17CAPITAL RESTRUCTURE UPDATE
TIMETABLE
March 2022 April 2022 May 2022 June 2022
Publication of circular
Scheme meeting
Scheme unconditional
Release of interim
results
Dividend declaration
Dividend payment
Termination of A share
listing
Pre-close business update for the period ended 28 February 2022 1803 QUESTIONS
& ANSWERS
Pre-close business update for the period ended 28 February 2022DISCLAIMER
Certain statements contained in this document constitute forward-looking information. Forward-looking information may relate to Dipula Income Fund Limited’s (“the Company”)
future outlook and anticipated events or results and may include statements regarding the financial position, business strategy, budgets, projected costs, capital expenditures,
financial results, taxes, plans and objectives of or involving the Company. Statements regarding future performance, achievements, prospects or opportunities for the Company
or the real estate industry are forward-looking statements. The Company has based these forward-looking statements on factors and assumptions about future events and
financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs, including that the South African economy will remain
stable over the next 12 months, that inflation will remain relatively low, that interest rates will remain stable, that tax laws remain unchanged, that conditions within the real estate
market, including competition for acquisitions, will be consistent with the current climate, that the South African capital markets will provide the Company with access to equity
and/or debt at reasonable rates when required.
Although the forward-looking statements contained in this document are based upon assumptions that management of the Company beliefs are reasonable based on information
currently available to management, there can be no assurance that actual results will be consistent with these forward-looking statements. Forward-looking statements
necessarily involve known and unknown risks and uncertainties, many of which are beyond the Company’s control, that may cause the Company’s or the industry’s actual
results, performance, achievements, prospects and opportunities in future periods to differ materially from those expressed or implied by such forward-looking statements. The
forward-looking statements made in this presentation relate only to events or information as of the date on which the statements are made in this document. The Company
undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which
the statements are made or to reflect the occurrence of unanticipated events.
These forward-looking statements are made as of 28 February 2022 and Dipula Income Fund Limited assumes no obligation to update or revise them to reflect new events or
circumstances, except as required by law.
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