Debt Capital Markets Roadshow - July 2018 www.vukile.co.za - Vukile Property Fund
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Debt Capital Markets Roadshow July 2018 www.vukile.co.za
Contact Details Available for questions Vukile Property Fund Designation Email Tel. Number Cell number Laurence Rapp Chief Executive Office Laurence.Rapp@vukile.co.za +27 (0)11 288 1002 +27 (0)83 266 3011 Mike Potts Chief Financial Office Mike.Potts@vukile.co.za +27 (0)11 288 1003 +27 (0)83 357 1111 Maurice Shapiro Group Head of Treasury Maurice.Shapiro@vukile.co.za +27 (0)11 288 1001 +27 (0)83 577 6184 ABSA Capital Designation Email Tel. Number Cell number Muhammad Motala Syndicate Desk Muhammad.Motala@absacapital.com +27 (0)11 895 5780 +27 (0)79 500 6191 Marcus Veller Debt Capital Markets Marcus.Veller@absacapital.com +27 (0)11 895 7298 +27 (0)79 613 6796 Heidi Barends Debt Capital Markets Heidi.Barends@absacapital.com +27 (0)11 772 7868 +27 (0)71 492 0919 Debt Capital Markets Roadshow - July 2018 2
AGENDA
1 Company Overview
2 Strategic Direction
3 Treasury Management
4 Defensive Cashflow - Southern African Retail Portfolio
5 Defensive Cashflow - Spanish Portfolio
6 DMTN Programme
7 Q&A
8 Appendices
3
Company Overview
www.vukile.co.za
4
Profile
Who we are
OVERVIEW
COMPANY
Z High quality, low risk, Retail REIT in South Africa with growing international exposure in Spain
Z Strong operational focus with a core competence in active asset management
DIRECTION
STRATEGIC
Z Aim for simplicity and transparency
MANAGEMENT
TREASURY
Z Clarity of vision, strategy and structure
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Z Prudent financial management and strong capital markets expertise
Z Entrepreneurial approach to deal making
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Z Strong focus on governance and leadership
PROGRAMME
DMTN
Z History of strong compounded growth and shareholder returns with CAGR of 21.9% since listing
Z 30% of assets now focused on UK and Spain (including acquisition of Habaneras SC after FY2018 year end)
Q&A
Listings on the JSE and NSX
APPENDICES
Z
Debt Capital Markets Roadshow - July 2018 5
Group Overview – Total property related assets of R22.7bn
Focused Retail REIT in South Africa with growing Spanish retail exposure
OVERVIEW
COMPANY
United
Kingdom 5%
DIRECTION
STRATEGIC
R1.2bn(iii)
MANAGEMENT
TREASURY
25%
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Spain
R5.6bn(ii)
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Direct Property
Portfolio R14.5bn(i)
Southern
PROGRAMME
DMTN
R595mn R790mn
Africa
R15.9bn(i)
70%
Q&A
APPENDICES
(i) includes 80% of the consolidated value of Moruleng Mall (Clidet No. 1011 (Pty) Ltd).
(ii) Includes 99% of the consolidated value of Castellana Properties SOCIMI, including the acquisition of Habaneras SC.
(iii) Carry value of investment in Atlantic Leaf Properties Limited associate.
Debt Capital Markets Roadshow - July 2018 6
Distribution history
Continuing 14 year trend of unbroken growth in distributions with CAGR of 21.9% since listing
Cents per share
OVERVIEW
COMPANY
7.7%
DIRECTION
STRATEGIC
Interim Final Normalised total Non-recurring
168,82
156,75
MANAGEMENT
TREASURY
146,3
136,8
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
126,5
120,4
111,4
107,9
109
96,17
97,9
89,1
88,3
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
83,1
77,7
72,65
71,7
67,65
68,2
63,8
63,2
62,8
60,9
59,1
54,8
53,8
52,2
47,6
46,2
44,1
PROGRAMME
DMTN
48
47
40,3
13,8
13,4
11,2
8,7
Q&A
APPENDICES
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Debt Capital Markets Roadshow - July 2018 7
Strategic Direction
www.vukile.co.za
8
Strategic direction
Focus on capital allocation and strategic consistency
OVERVIEW
COMPANY
Southern Africa Balance
International sheet management
DIRECTION
STRATEGIC
Z Continued focus on defensive retail Z Focus will be on Spain to drive home Z Disciplined and conservative financial
MANAGEMENT
TREASURY
sector in line with our high-quality low the advantage we have created in management with stable LTV target
risk portfolio Castellana through scale, on-the- around 35%
Z Further investment in our existing ground presence and operational Z Prudent interest rate policy to hedge
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
portfolio through expansions and capabilities at least 75% of debt
upgrades Z Despite performing in line with Z Foreign exchange hedging policy to
Z Strong operational focus to keep expectations, limited potential to minimise adverse foreign exchange
invest further new equity into Atlantic
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
delivering solid results fluctuations by hedging forward on
Leaf under current conditions, but average 75% of foreign dividends by
Z Increased focus on consumer analytics rather working with management to
and alternative income streams way of forward exchange contracts
unlock value over a 3 year period
Z Appetite to invest further in Z Decided not to look at any other new
PROGRAMME
DMTN
South Africa but limited local Z Look to recycle non-core assets into
markets in the short to medium term core strategy:
acquisition prospects at the but rather to focus on Spain
right price - Timing and price dependent
Q&A
- Includes stake in Gemgrow
APPENDICES
Debt Capital Markets Roadshow - July 2018 9
Equity investments
Focus on capital allocation and strategic consistency
OVERVIEW
COMPANY
Fairvest Atlantic Leaf Properties Gemgrow
DIRECTION
STRATEGIC
Z Continues to deliver above Z Portfolio performing in line with Z Non-core asset and would look to
MANAGEMENT
TREASURY
expectations expectations but high cost of equity is dispose of stake at the right price
Z Strategically consistent with our retail limiting further quality portfolio
growth Z Recycle into our core strategies in
strategy
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
South Africa or Spain
Z Very cost effective way to get Z Further exacerbated by yield
exposure to smaller retail assets compression in preferred logistics and Z Currently exploring some
catering to same demographics and warehousing sector opportunities to exit
Z Limited opportunity to invest further
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
tenants
Z No intention to sell the stake equity under current conditions
Z Supporting management to find ways
to unlock value and restructuring to a
PROGRAMME
DMTN
UK REIT
Q&A
APPENDICES
CORE NON- CORE
Debt Capital Markets Roadshow - July 2018 10Corporate structure
Strong focus on Corporate Governance and Succession Planning
OVERVIEW
COMPANY
Group
DIRECTION
STRATEGIC
Level
MANAGEMENT
TREASURY
Southern Laurence Rapp
Spain
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Chief Executive Officer
Africa
Mike Potts
Chief Financial Officer till end March 2019
To be advised
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Ina Lopion New Chief Financial Officer Alfonso Brunet
Managing Director Managing Director
Maurice Shapiro
Rob Hawton Group Head of Treasury Ruben Perez
Financial Director Financial Director
PROGRAMME
DMTN
Johann Neethling
Itu Mothibeli Group Head of Corporate Services Julio Garcia
Director: Head: Asset Management
Asset Management
Omar Khan
Q&A
Sedise Moseneke Head: Integration and Acquisitions
APPENDICES
Director: Transformation and
Vukile Development Academy
Debt Capital Markets Roadshow - July 2018 11Treasury Management
at year ended 31 March 2018
www.vukile.co.za
12Debt and foreign exchange policy
A prudent approach to managing risk
Z Internal management policy of a maximum loan to value ratio of 40%
OVERVIEW
COMPANY
with 35% targeted level
DIRECTION
STRATEGIC
Z Minimum of 75% of interest bearing debt to be hedged
with a minimum 3 year fixed rate (swap) maturity profile
MANAGEMENT
TREASURY
Z A multi-banked approach across diversified sources of funding
with no more than 25% of total interest bearing debt to mature within any one financial year
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Z Commercial Paper fully backed by committed revolving credit facilities
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Z Acquisitions of foreign assets to be funded with foreign loans in the same currency
to minimise adverse foreign exchange fluctuations on Vukile’s earnings, assets and liabilities.
PROGRAMME
DMTN
Z On average 70% - 75% of foreign dividends to be hedged by way of forward exchange contracts
over a 3 year period
Q&A
Z Vukile is a member of the Debt Issuers Association (“DIA”) and has representation on their executive committee.
APPENDICES
Vukile abides by the Debt capital markets – primary issuance guidelines (November 2017)
Debt Capital Markets Roadshow - July 2018 13Key debt and foreign exchange metrics
Well hedged and prudent balance sheet
OVERVIEW
COMPANY
Z Reduced Group cost of funding to 5.74% (South Africa 9.24%)
Z Strong balance sheet with a loan to value ratio of 28.2% (i) and a gearing ratio of 29.6% (ii)
DIRECTION
STRATEGIC
Z 101.3% (iv) of Interest bearing debt hedged with a 3.6 year fixed rate (swap) maturity profile
MANAGEMENT
TREASURY
Z Diversified sources of funding with 9 funders plus DMTN programme with no funder accounting
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
for more than 18% of facilities
Z Secured note long term rating of “AA+”, corporate long term rating of “A” and
corporate short term rating of “A1” with a positive outlook
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Z 77.2% of forecast EUR income from Castellana hedged over the next 3 years
(including acquisition of Habaneras Shopping Centre after FY2018 year end)
PROGRAMME
DMTN
Z 71.7% of forecast GBP income from Atlantic Leaf hedged over the next 3 years
Q&A
APPENDICES
(i), (ii), (iii) and (iv) defined in Appendix E: Notes to Treasury Management Slides
Debt Capital Markets Roadshow - July 2018 14Segmental loan-to-value and interest cover ratios
Low risk conservative balance sheet
OVERVIEW
COMPANY
Southern Africa Spain Group Internal Policy
R'000 €'000 R'000 at Group level
DIRECTION
STRATEGIC
Loan-to-value ratio (net of cash and cash equivalents) (i) 24.6% 42.2% 28.2% 35% - 40%
Loan-to-value covenant level 50% 65% 50%
MANAGEMENT
TREASURY
LTV stress level margin (% asset value reduction to respective covenant levels) 40% 27% 32%
LTV stress level amount (asset value reduction to respective covenant levels) R6 476 464 € 83 435 R6 710 360
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Interest cover ratio 3.14 times 3.62 times 3.19 times
Interest cover ratio covenant level 2 times 2 times 2 times
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
ICR stress level margin (% EBITDA reduction to respective covenant levels) 36% 45% 37%
ICR stress level amount (EBITDA reduction to respective covenant levels) R371 168 € 4 572 R437 796
PROGRAMME
DMTN
Interest bearing debt hedged (iv) 101.9% 100.0% 101.3% > 75%
Fixed rate (swap) maturity profile 3.1 years 4.6 years 3.6 years > 3 years
Q&A
Debt maturity profile 1.9 years 4.6 years 2.7 years
APPENDICES
(i) and (iv) defined in Appendix E: Notes to Treasury Management Slides
Debt Capital Markets Roadshow - July 2018 15Sources of funding
R7.1bn of Vukile Group debt from diversified sources of funding
Spanish balance sheet (v) Southern African balance sheet
OVERVIEW
COMPANY
Consolidated debt from Castellana
which is non-recourse to Vukile
R2.128bn
DIRECTION
STRATEGIC
8% Banco Popular
MANAGEMENT
TREASURY
R1.749bn
R1.613bn
4% RMB
34%
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
52%
Caixabank 30% Unsecured
Investec R1.105bn
7% SCM
9% Nedbank
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
32%
ABSA 27% RMB
5% Investec 66%
R0.476bn Secured
40% 27%
PROGRAMME
DMTN
Banco Santander 34% ABSA
100%
Standard Bank ABSA 24%
Standard Bank
Q&A
Foreign funders Local funders Local funders Local funders DMTN
APPENDICES
EUR (v) EUR (vi) GBP (vii) ZAR ZAR (viii)
(v), (vi), (vii) and (viii) defined in Appendix E: Notes to Treasury Management Slides
Debt Capital Markets Roadshow - July 2018 16Analysis of Group loan repayment and swap expiry profile
Well hedged with low risk expiry profile
Group loan and swap expiry profile
OVERVIEW
COMPANY
DIRECTION
STRATEGIC
27.3%
Internal Policy
22.7%
MANAGEMENT
TREASURY
No more than
19.5%
20.9%
25% of total
18.6%
18.0%
interest bearing
17.7%
debt to mature
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
14.3%
within any one
13.3%
financial year
11.8%
101% of interest
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
bearing debt
7.0%
hedged (iii)
4.5%
4.1%
Fixed rate
0.3%
(swap) maturity
PROGRAMME
DMTN
profile 3.6 years
2019 2020 2021 2022 2023 2024 2025
Loan expiry profile R'm 1 314 1 011 1 381 1 274 833 941
Q&A
Commercial paper expiry profile R'm 317
Swap expiry profile R'm 273 463 1 374 1 796 1 495 1 164 22
APPENDICES
(iii) defined in Appendix E: Notes to Treasury Management Slides
Debt Capital Markets Roadshow - July 2018 17Analysis of Southern African loan repayment and swap expiry profile
Well hedged with low risk expiry profile
Southern African Loan and Swap Expiry Profile
OVERVIEW
COMPANY
DIRECTION
STRATEGIC
27.9%
30.8%
26.6%
MANAGEMENT
TREASURY
26.0%
20.4%
21.2%
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
12.9%
102% of interest
10.4%
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
bearing debt
hedged (iii)
6.4%
5.8%
6.1%
5.0%
Fixed rate
(swap) maturity
PROGRAMME
DMTN
0.5%
profile 3.1 years
2019 2020 2021 2022 2023 2024 2025
Loan Expiry Profile R'mn 1 314 1 011 1 381 635 285
Q&A
Commercial Paper Expiry Profile R'mn 317
APPENDICES
Swap Expiry Profile R'mn 274 463 1 374 1 158 948 222 22
(iii) defined in Appendix E: Notes to Treasury Management Slides
Debt Capital Markets Roadshow - July 2018 18Cost of funding
Reduction in Group cost of finance due to funding mix
Group Debt by Currency
OVERVIEW
COMPANY
DIRECTION
STRATEGIC
9.16% 9.24% 9.37% 2.15% 2.28% 2.35% 3.76% 3.34% 3.49% 7.90% 5.74% 5.20%
R7,071bn
MANAGEMENT
TREASURY
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
R4,026bn
R3,740bn
R3,192bn
R2,855bn
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
R0,483bn
R0,476bn
R0,351bn
PROGRAMME
DMTN
ZAR EUR GBP Total
Debt as at Mar-17 Debt as at Mar-18
Q&A
APPENDICES
% FY2017 Historic cost of debt % FY2018 Historic cost of debt (ix) % FY2019 12M Forecast cost of debt (x)
(ix) and (x) defined in Appendix E: Notes to treasury management slides
Debt Capital Markets Roadshow - July 2018 19Undrawn facilities (including new facilities after FY2018 year end)
Prudent cashflow management
OVERVIEW
COMPANY
Facility Amount Amount Drawn Facility Available
R'000 R'000 R'000
DIRECTION
STRATEGIC
ABSA Multicurrency Revolving Credit Facility R850 000 R350 000 R500 000
RMB Revolving Credit Facility * R200 000 R148 842 R51 158
MANAGEMENT
TREASURY
RMB Multicurrency Term Loan * R400 000 R0 R400 000
Investec EUR Term Loan * €35 000 €0 €35 000
ZAR Equivalent at EURZAR spot rate of 14.5730 at 31 March 2018 R510 055 R0 R510 055
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Total Committed undrawn facilities R1 960 055 R498 842 R1 461 213
Z Total Commercial Paper issued of R317mn fully backed by undrawn facilities of R1 461mn
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Z Undrawn term facilities available for acquisition pipeline
PROGRAMME
DMTN
Q&A
APPENDICES
* Investec and RMB facilities in the process of finalising legal agreements
Note: new ABSA facility finalised after FY2018 year end
Debt Capital Markets Roadshow - July 2018 20GBP foreign exchange hedging
Maintaining sustainable predictable income while reducing currency volatility
OVERVIEW
COMPANY
£'000 May-18 Nov-18 May-19 Nov-19 May-20 Nov-20
Net GBP dividends forecast (xi) £2 562 £2 641 £2 713 £2 661 £2 727 £2 760
DIRECTION
STRATEGIC
FEC hedge (£1 953) (£1 885) (£1 930) (£1 880) (£1 935) (£1 930)
MANAGEMENT
TREASURY
Fixed GBPZAR rate 18.0295 18.5992 19.2221 19.9144 20.6192 21.3807
Unhedged GBP income £609 £756 £783 £781 £792 £830
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Percentage GBP income hedged (xii) 76% 71% 71% 71% 71% 70%
Z To minimise the adverse foreign exchange fluctuations Vukile’s target is to hedge on average 75% of foreign dividends over a
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
3-year period
Z 71.7% of forecast GBP income from Atlantic Leaf is hedged over the next 3 years (next 6 dividend payments)
PROGRAMME
DMTN
Q&A
APPENDICES
(xi) and (xii) defined in Appendix E: Notes to treasury management slides
Debt Capital Markets Roadshow - July 2018 21EUR foreign exchange hedging post year end
Includes the acquisition of Habaneras in May 2018
OVERVIEW
COMPANY
€'000 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Jun-21
Net EUR dividends forecast (xiii) €4 055 €4 061 €4 780 €4 769 €4 996 €4 996
DIRECTION
STRATEGIC
FEC hedge (€3 209) (€3 884) (€3 775) (€3 989) (€3 995) (€2 508)
MANAGEMENT
TREASURY
Fixed EURZAR rate 16.4265 17.1995 17.8775 18.5746 18.3228 18.9581
Unhedged EUR income €846 €177 €1 005 €780 €1 001 €2 488
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Percentage EUR income hedged (xiv) 79% 96% 79% 84% 80% 50%
Z Including the acquisition of Habaneras (post year end) 77.2% of forecast EUR income from Castellana is hedged over the
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
next 3 years (next 6 dividend payments)
Z A new cross currency interest rate swap (“CCIRS”) of €23 800 000 with a 3 year fixed interest rate of 1.29% at a EURZAR
rate of 15.1420 has been utilised to hedge EUR foreign currency fluctuations as part of the acquisition of Habaneras
PROGRAMME
DMTN
Z Including the acquisition of Habaneras, utilisation of CCIRS is 42.1% of the total value of international investments
(internal policy limit is 45%)
Q&A
APPENDICES
(xiii) and (xiv) defined in Appendix E: Notes to treasury management slides
Debt Capital Markets Roadshow - July 2018 22Defensive Cashflow
- Southern African Retail Portfolio
at year ended 31 March 2018
www.vukile.co.za
23Key portfolio metrics
Direct Southern African Retail Portfolio
OVERVIEW
COMPANY
Z Value R13.2bn (91% of direct Southern African portfolio) Z 46% of income from top 10 tenants
46 Properties WALE of 3.7 years
DIRECTION
STRATEGIC
Z Z
GLA 810 398m² Average base rentals R130.44/m²/month
MANAGEMENT
TREASURY
Z Z
Z Average asset value R288mn Z Contractual rental escalation 7.1%
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Z Average discount rate 13.3% Z Rent reversions +5.2%
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Z Average exit capitalisation rate 8.2% Z Rent to sales ratio 6.0%
Z 3.4% Vacant Z Average annualised trading density R27 598/m²
PROGRAMME
DMTN
Z 82% of retail space let to national tenants Z Net cost ratio 16.8%
Q&A
APPENDICES
Debt Capital Markets Roadshow - July 2018 24Creating a high quality low risk retail portfolio
Interrelationship of key retail metrics
OVERVIEW
COMPANY
Regional Tenant
Dominance Profile
DIRECTION
STRATEGIC
f Dominant in primary f 82% national tenants
catchment area f 37% of leases expiring in
f In excess of 130 million 2022 and beyond
customer visits per year at our Vacancies reduced to 3.4%
MANAGEMENT
TREASURY
f
top 15 centres f Contractual escalations ahead
f Customer profile aligned to of inflation at 7.1%
South African demographics
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Rental Sales &
Affordability Trading Metrics
f Industry leading Rent-to-Sales f Trading densities above
ratio of 6.0% industry averages
PROGRAMME
DMTN
f Consistently positive Rent f Growth in trading density of 2.2%
Reversions ahead of market comparables
f Scope for growth in base rentals which show negative growth
Q&A
APPENDICES
Debt Capital Markets Roadshow - July 2018 25Retail tenant exposure
Low risk with c.80% national tenants
Tenant profile - by contractual rent Top 10 tenants by rent
OVERVIEW
COMPANY
DIRECTION
STRATEGIC
Other SStar 8,3% 2.7% Pep Stores
2.5% Ackermans
21%
Shoprite
MANAGEMENT
TREASURY
Diversified across 5,8%
990 tenants
Edcon 5,7% 3.2% Jet
1.6% Edgars
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Foschini 5,2%
Top 10 Pick n
5,0%
tenants Pay
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
46% Spar 4,1%
of Retail Mr Price 3,4%
Rent
Truwort
PROGRAMME
DMTN
3,3%
hs
Nationals Massmar
3,0%
79% t
Q&A
First
2,3%
Rand…
APPENDICES
Debt Capital Markets Roadshow - July 2018 26Southern Africa
Continued focus on retail
OVERVIEW
COMPANY
Z Encouraged by improving political and economic environment leading to an uptick in consumer confidence
but no tangible evidence yet on the ground
DIRECTION
STRATEGIC
Z Portfolio is defensively positioned with 91% of direct property assets in retail sector
MANAGEMENT
TREASURY
Z Tenant mix very defensive with c.80% national tenants and large grocery component
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Z Local activity will be focused on expansions and upgrades to existing centres
Z Continued strong operational focus to drive results
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Z Growing focus on consumer analytics and alternative income streams
Z Increased appetite for local acquisitions at the right price
PROGRAMME
DMTN
Q&A
APPENDICES
Debt Capital Markets Roadshow - July 2018 27Defensive Cashflow - Spanish Portfolio
at year ended 31 March 2018
www.vukile.co.za
www vukile co za
28Key portfolio metrics
A low-risk defensive portfolio as a platform for future growth
OVERVIEW
COMPANY
Z 92% Retail by market value Z Average asset value of €23.7mn
DIRECTION
STRATEGIC
Z External portfolio value of €308mn with Z 94% of income derived from national tenants
organic growth of 6.65% vs acquisition cost
MANAGEMENT
TREASURY
Z Average discount rate of 8.6% Z 62% of income from top 10 tenants
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Z Average exit capitalisation rate of 6.1% Z 1.5%* vacancy across the portfolio
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Z 172 974m² of GLA Z WALE of 18.6 years~
PROGRAMME
DMTN
Z Average base rentals of €9.22/m²/month
(+2.3%)
Q&A
APPENDICES
* excluding development vacancy at Kinepolis Leisure Centre
~ excludes lease breaks
Note: All data represents 100% of Castellana, Vukile shareholding is 98.7%
Debt Capital Markets Roadshow - July 2018 29Retail tenant exposure
Low risk with c.94% national and international tenants
Tenant profile - by contractual rent Top 10 tenants by rent
OVERVIEW
COMPANY
DIRECTION
STRATEGIC
Other 11%
6%
MANAGEMENT
TREASURY
10%
7%
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
6%
Top 10
6%
Tenants
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
62% 5%
of Retail
Rent 5%
PROGRAMME
DMTN
5%
4%
Q&A
National
94%
APPENDICES
4%
Debt Capital Markets Roadshow - July 2018 30Spain
Moving to the next stage
OVERVIEW
COMPANY
Z Spanish retail and economic fundamentals remain positive
Z Castellana management team now on board and growing operational capacity
DIRECTION
STRATEGIC
Z Approach is to “replicate not integrate”, implant Vukile DNA into Castellana
MANAGEMENT
TREASURY
Z Remain focused on the retail sector including retail parks and shopping centres
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Z Critical to our success is that we operate as locals on the ground
Z Focus on value added asset management initiatives and driving operational excellence
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Z Currently seeing very good deal flow; Castellana presence is well established in the retail market as a
credible and trustworthy buyer
Z Expect Spain will be a major engine of growth
PROGRAMME
DMTN
Z List Castellana on the MAB by August 2018 as an introductory listing
Q&A
Z Strong focus on corporate governance
APPENDICES
Debt Capital Markets Roadshow - July 2018 31DMTN Programme
www.vukile.co.za
32Overview of DMTN Secured Property Portfolio (Group 1 Notes)
Quality Secured Portfolio
OVERVIEW
COMPANY
Z Property Value R4 368mn* Z 42% of income from top 10 tenants
DIRECTION
STRATEGIC
Z 18 Properties Z 74% of space let to national tenants
MANAGEMENT
TREASURY
Z GLA 289 395m² Z WALE of 3.4 years
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Z Average property value R243mn Z Top 5 Properties 65% of Secured Portfolio by
market value
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Z 90% Retail by market value
Z Total DMTN Secured Debt R772mn~
Z 3.5% Vacant
PROGRAMME
DMTN
Z DMTN Secured Portfolio LTV 18%
Q&A
APPENDICES
* Directors Valuations as at 31 March 2018
~ excludes VKE06 a R380mn secured corporate bond repaid after year end
Debt Capital Markets Roadshow - July 2018 33Secured Portfolio
Top 5 assets
OVERVIEW
COMPANY
Phoenix Plaza Pine Crest * Gugulethu Square Dobsonville Mall Randburg Square
DIRECTION
STRATEGIC
MANAGEMENT
TREASURY
GAV R914mn R914mn R544mn R513mn R397mn
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Region KwaZulu-Natal KwaZulu-Natal Western Cape Gauteng Gauteng
Gross Lettable
Area 24 351m² 40 087m² 25 322m² 26 628m² 40 767m²
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Monthly Rental R260/m² R160/m² R155/m² R134/m² R100/m²
National Tenant
exposure 80% 94% 90% 87% 85%
PROGRAMME
DMTN
Vukile
Ownership 100% 100% 100% 100% 100%
Approx.
9.8mn 11.3mn 11.3mn~ 11.7mn~ 7.2mn
Q&A
Footfall
APPENDICES
Vacancy 1.9% 3.5% 0.4% 2.0% 8.6%
*Represents 100% Vukile ownership however only 50% of property is mortgaged to DMTN Secured Portfolio ~ Estimate
Debt Capital Markets Roadshow - July 2018 34Overview of Unsecured Assets
Quality Unsecured Assets
OVERVIEW
COMPANY
Z Property value R537mn* Z Listed investments R415mn~
DIRECTION
STRATEGIC
Z 3 Properties Z Unlisted investments R2 048mn^
MANAGEMENT
TREASURY
Z GLA 41 679m² Z Total Unsecured Assets R3 000mn
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Z Average asset value R179mn Z Total Unsecured Debt R847mn#
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Z 84% of space let to national tenants Z Unsecured Debt to Unsecured Assets ratio 28%
Z 3.4% Vacant Z Namibian Properties valued at R1 099mn
PROGRAMME
DMTN
approved to be released from bank security
* Directors Valuations as at 31 March 2018
Q&A
~ Listed investments calculated as the sum of (i) the number of unpledged Atlantic Leaf JSE shares (23,747,510) multiplied by their JSE share price (R17.00); (ii) the number of unpledged Gemgrow A shares (500,000) multiplied by
their share price (R9.79); and (iii) the number of unpledged Gemgrow B shares (1,000,000) multiplied by their share price (R6.50), at 31 March 2018.
APPENDICES
^ Unlisted investments calculated as the number of unpledged Castellana shares (23,428,966) multiplied by their unlisted share price (€6.00) and converted at the EURZAR exchange rate (14.5730), at 31 March 2018.
# Total Unsecured Debt excludes VKE01U a R170mn unsecured corporate bond repaid after year end and includes VKE011 a R175mn unsecured corporate bond issued after year end; VKE012 a R150mn unsecured corporate bond
issued after year end; and a €6.5mn Standard Bank unsecured term loan.
Debt Capital Markets Roadshow - July 2018 35Unsecured Property Portfolio
Top 3 assets
OVERVIEW
COMPANY
Moruleng Mall * Maake Plaza Bloemfontein Jet
DIRECTION
STRATEGIC
GAV R401mn R96m R41m
MANAGEMENT
TREASURY
Region Northwest Limpopo Free State
Gross Lettable Area
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
31 421m² 15 752m² 5 516m²
Monthly Rental R120/m² R113/m² R62/m²
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
National Tenant exposure 87% 87% 100%
Vukile Ownership 80% 70% 100%
PROGRAMME
DMTN
Approx. Footfall 4.0mn 3.2mn~ 1.3mn~
Vacancy 4.7% 2.0% Fully let
Q&A
APPENDICES
~ Estimate
* Clidet No. 1011 (Pty) Ltd which owns 100% of Moruleng Mall has secured the property by way of a mortgage bond in favour of Vukile. Vukile owns 80% of Clidet No. 1011 (Pty) Ltd.
Debt Capital Markets Roadshow - July 2018 36Overview of Namibian Portfolio
Quality Property Assets
OVERVIEW
COMPANY
Z Property value R1 099mn* Z Total Unsecured Direct Property R1 636mn
including Namibian Portfolio
DIRECTION
STRATEGIC
Z 5 Properties
Z Total Unsecured Assets R4 100mn including
MANAGEMENT
TREASURY
Namibian Portfolio
Z GLA 63 152m²
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Z Total Unsecured Debt R847mn#
Z Average asset value R220mn
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Z Unsecured Debt to Unsecured Direct Property
Z 88% of space let to national tenants
ratio 52% including Namibian Portfolio
Z 3.6% Vacant
PROGRAMME
DMTN
Z Unsecured Debt to Unsecured Asset ratio 21%
including Namibian Portfolio
Q&A
* Directors Valuations as at 31 March 2018
~ Namibian Portfolio approved to be released from bank security. The Namibian assets are not held for sale nor are being actively marketed in anyway, however Vukile has received an offer in the last 12 months to purchase the
APPENDICES
Namibian Portfolio which is no longer valid.
# Total Unsecured Debt excludes VKE01U a R170mn unsecured corporate bond repaid after year end and includes VKE011 a R175mn unsecured corporate bond issued after year end; VKE012 a R150mn unsecured corporate bond
issued after year end; and a €6.5mn Standard Bank unsecured term loan.
Debt Capital Markets Roadshow - July 2018 37Namibian Portfolio
Top 5 assets
OVERVIEW
COMPANY
Oshakati Shopping Windhoek 269 Katutura Shoprite Oshikango Shopping Ondangwa Shoprite
DIRECTION
STRATEGIC
Centre Independence Avenue Centre Centre Centre
MANAGEMENT
TREASURY
GAV R465mn R230mn R171mn R160mn R73mn
Region Namibia Namibia Namibia Namibia Namibia
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Gross Lettable
Area 24 632m² 12 828m² 10 620m² 9 163m² 5 908m²
Monthly Rental R134/m² R171/m² R136/m² R145/m² R118/m²
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
National Tenant
exposure 93% 82% 87% 99% 90%
Vukile
Ownership 100% 100% 100% 100% 100%
PROGRAMME
DMTN
Vacancy Fully Let 7.1% 1.6% 6.0% 0.0%
Q&A
APPENDICES
Debt Capital Markets Roadshow - July 2018 38Corporate Bond and Commercial Paper Issuances
Balance of secured and unsecured debt
OVERVIEW
COMPANY
Corporate Bonds Security Amount Reference Rate Margin Maturity Date Initial Term
VKE07 Secured R200mn 3M JIBAR 1.65% 08/06/2020 5.1 years
DIRECTION
STRATEGIC
VKE08 Unsecured R110mn 3M JIBAR 1.80% 29/03/2019 3.0 years
MANAGEMENT
TREASURY
VKE09 Secured R378mn 3M JIBAR 1.64% 08/07/2020 3.2 years
VKE10 Secured R194mn 3M JIBAR 1.80% 08/07/2022 5.2 years
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
VKE11 Unsecured R175mn 3M JIBAR 1.75% 20/04/2023 5.0 years
VKE12 Unsecured R150mn 3M JIBAR 1.60% 03/05/2021 3.0 years
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Commercial Paper Security Amount Reference Rate Margin Maturity Date Initial Term
PROGRAMME
DMTN
VKC23 Unsecured R140mn 3M JIBAR 0.70% 20/08/2018 0.5 years
VKC24 Unsecured R100mn 3M JIBAR 1.10% 20/02/2019 1.0 years
Q&A
VKC26 * Unsecured R77mn 3M JIBAR 0.50% 05/09/2018 0.2 years
APPENDICES
* R77mn Commercial Paper issued to Vukile subsidiary in Namibia (eliminated on consolidation).
Debt Capital Markets Roadshow - July 2018 39Funding Plans
Managing Cashflow
OVERVIEW
COMPANY
Z Recently repaid VKE06 a R380mn secured corporate bond in May 2018
DIRECTION
STRATEGIC
Z Recently repaid bank term loans of R150mn in April 2018
MANAGEMENT
TREASURY
Z Will repay term loan of R82mn in July 2018
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Z Potentially considering accessing the DCM market in 2018 to repay Revolving Credit Facilities and manage
funding mix for development projects and potential acquisitions
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Z Castellana presence is well established in the retail market as a credible and trustworthy buyer
Currently seeing very good deal flow in Spain and a possible opportunity is under review
PROGRAMME
DMTN
Q&A
APPENDICES
Debt Capital Markets Roadshow - July 2018 40Q&A
www.vukile.co.za
41Contact Details
Available for questions
OVERVIEW
COMPANY
Vukile Property Fund Designation Email Tel. Number Cell number
Laurence Rapp Chief Executive Office Laurence.Rapp@vukile.co.za +27 (0)11 288 1002 +27 (0)83 266 3011
DIRECTION
STRATEGIC
Mike Potts Chief Financial Office Mike.Potts@vukile.co.za +27 (0)11 288 1003 +27 (0)83 357 1111
MANAGEMENT
TREASURY
Maurice Shapiro Group Head of Treasury Maurice.Shapiro@vukile.co.za +27 (0)11 288 1001 +27 (0)83 577 6184
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
ABSA Capital Designation Email Tel. Number Cell number
Muhammad Motala Syndicate Desk Muhammad.Motala@absacapital.com +27 (0)11 895 5780 +27 (0)79 500 6191
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Marcus Veller Debt Capital Markets Marcus.Veller@absacapital.com +27 (0)11 895 7298 +27 (0)79 613 6796
Heidi Barends Debt Capital Markets Heidi.Barends@absacapital.com +27 (0)11 772 7868 +27 (0)71 492 0919
PROGRAMME
DMTN
Q&A
APPENDICES
Debt Capital Markets Roadshow - July 2018 42Appendix A
Secured portfolio
www.vukile.co.za
43Secured Transaction Structure
Industry best practices
Vukile Security
Z The Secured Notes are secured through a guarantee from the Company No.1
OVERVIEW
COMPANY
Vukile Security SPV Trust No.1 Owner Trust
Z The mortgage bonds are housed in the Guarantee SPV, which
DIRECTION
STRATEGIC
provides guarantees to the Permitted Creditors and Vukile
Security SPV Trust No.1 100%
MANAGEMENT
TREASURY
Indemnity, Mortgage
Vukile Security Permitted
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
bond security cession
Company No.1 Creditors
“Guarantee Guarantee (ABSA)
SPV”
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Issue of Secured Indemnity
Bonds to raise Guarantee
funding
PROGRAMME
DMTN
Vukile
Security SPV
Noteholders
Trust No1
Q&A
Group 1 Notes
APPENDICES
Debt Capital Markets Roadshow - July 2018 44Other Secured Portfolio Assets
(excluding Top 5 Assets)
Total Secured Bloemfontein King Senzangakona Highland
OVERVIEW
COMPANY
Portfolio Plaza Centre Mews
GAV R4 368mn R341mn R274mn R244mn
DIRECTION
STRATEGIC
Region South Africa Free State KwaZulu-Natal Mpumalanga
Gross Lettable Area 289 395m² 38 255m² 22 373m² 17 032m²
Monthly Rental R118/m² R87/m² R115/m² R116/m²
MANAGEMENT
TREASURY
National Tenant Exposure 74% 50% 86% 70%
Vacancy 3.8% 0.6% 2.3% 9.9%
Elim Hubyeni Allandale Randburg Square Midrand Samrand
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Shopping Centre Industrial Park Apartments Sanitary City N1
GAV R144mn R136mn R80mn R72mn R61mn
Region Limpopo Gauteng Gauteng Gauteng Gauteng
Gross Lettable Area 12 686m² 21 344m² 180 Units 6 342m² 11 413m²
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Monthly Rental R94/m² R57/m² R5 500/unit R66/m² R53/m²
National Tenant Exposure 84% 1% 100% 23%
Vacancy 2.5% 7.3% Fully let Fully let
Nzhelele Valley Mbombela Richmond Spartan Galaxy Drive
PROGRAMME
DMTN
Shopping Centre Truworths Centre Industrial Park Warehouse Showroom
GAV R60mn R48mn R38mn R27mn R15mn
Region Limpopo Mpumalanga KwaZulu-Natal Gauteng Gauteng
Q&A
Gross Lettable Area 5 307m² 1 920m² 7 940m² 5 241m² 2 431m²
Monthly Rental R117/m² R170/m² R48/m² R53/m² R50/m²
APPENDICES
National Tenant Exposure 87% 100% 0% 0% 100%
Vacancy 12.1% Fully let Fully let Fully let Fully let
Debt Capital Markets Roadshow - July 2018 45Secured portfolio composition
Top 5 assets make up c.65% of the total portfolio
Sectoral Profile - by Market Value Sectoral Profile - by GLA
OVERVIEW
COMPANY
DIRECTION
STRATEGIC
Top 5 Top 5
Properties Properties
MANAGEMENT
TREASURY
By Market
Value By GLA
65% 90% Retail 81%
47%
of Total 8% Industrial 18%
of Total
Value GLA
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
0.3% Motor Related 1%
2% Residential
Geographic Profile - by Market Value Geographic Profile - by GLA
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
By Market
PROGRAMME
DMTN
Value By GLA
38% KwaZulu-Natal 26%
30% Gauteng 39%
12% Western Cape 9%
Q&A
8% Free State 13%
7% Mpumalanga 7%
APPENDICES
5% Limpopo 6%
Debt Capital Markets Roadshow - July 2018 46Secured Portfolio tenant exposure
Low risk with 70% national tenants
Top 10 Tenants by Contractual Rent Top 10 Tenants by occupied GLA
OVERVIEW
COMPANY
Other
DIRECTION
STRATEGIC
Other 26%
30% Top 10 Top 10
Diversified across Tenants Tenants
MANAGEMENT
TREASURY
311 tenants
42% Nationals
45%
of Total of Total Nationals
70% 74%
Rent GLA
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Tenant Profile - by Contractual Rent Tenant Profile - by occupied GLA
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
8,0% 7,4%
7,2% 2.5% Ackermans
6,5% 2.6% Ackermans
2.6% Pep Stores 2.0% Pep Stores
4,5% 4,6%
PROGRAMME
DMTN
4,0% 2.8% Jet 4,6% 3.3% Jet
3,9% 4,6%
3,9% 3,6%
3,2%
Q&A
3,4%
3,1% 3,2%
APPENDICES
2,3% 2,8%
2,3%
2,2%
Debt Capital Markets Roadshow - July 2018 47Secured portfolio tenant expiry profile
32% of contractual rent expiring in 2022 and beyond (WALE 3.4 years)
% of Contractual Rent
OVERVIEW
COMPANY
% of Contractual Rent Cumulative
100
78
68
DIRECTION
STRATEGIC
51
23 17 22
28 10
MANAGEMENT
TREASURY
Mar-19 Mar-20 Mar-21 Mar-22 Beyond Mar-22
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
% of GLA
% of GLA Cumulative
100
65 73
50
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
32 18 15
8 27
3,5 27
Vacant Mar-19 Mar-20 Mar-21 Mar-22 Beyond Mar-22
PROGRAMME
DMTN
For the 12 months ended 31 March 2018 leases were concluded with:
Z Total contract value R654mn
Q&A
Z Total rentable area 88 697m²
APPENDICES
Z Tenant Retention 84%
Debt Capital Markets Roadshow - July 2018 48Secured portfolio vacancy profile
Vacancy improving to 3.5% of area
5,9
INTRODUCTION
4,5
3,8
3,6
3,2
3,1
OVERVIEW
RETAIL PORTFOLIO
SOUTHERN AFRICAN
Vacancy
3.8% of
Rent Retail Industrial Total
OVERVIEW
PORTFOLIO
SPANISH
MANAGEMENT
& TREASURY
PERFORMANCE
FINANCIAL
Mar-17 Mar-18
8,3
BOARD CHANGES
MANAGEMENT &
Vacancy
4,2
3,8
3,5
3,3
3.5% of
3,0
PROSPECTS
PLANS &
STRATEGIC
GLA
Q&A
APPENDICES
Retail Industrial Total
Debt Capital Markets Roadshow - July 2018 49Appendix B
Southern African portfolio
www.vukile.co.za
50High quality retail assets
Top 15 assets
OVERVIEW
COMPANY
East Rand Mall Pine Crest Phoenix Plaza Gugulethu Square Dobsonville Mall
DIRECTION
STRATEGIC
MANAGEMENT
TREASURY
GAV R1 389mn R914mn R914mn R544mn R513mn
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Region Gauteng KwaZulu-Natal KwaZulu-Natal Western Cape Gauteng
Gross Lettable
Area 68 093m² 40 087m² 24 351m² 25 322m² 26 628m²
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Monthly Rental R260/m² R160/m² R260/m² R155/m² R134/m²
National Tenant
exposure 86% 94% 80% 90% 87%
PROGRAMME
DMTN
Vukile
Ownership 50% 100% 100% 100% 100%
Approx. ~ ~
10.5mn 11.3mn 9.8mn 11.3mn 11.7 mn
Q&A
Footfall
APPENDICES
Vacancy 0.5% 3.5% 1.9% 0.4% 2.0%
~ Estimate
Debt Capital Markets Roadshow - July 2018 51High quality retail assets
Top 15 assets (cont.)
Oshakati Shopping Daveyton Shopping
OVERVIEW
COMPANY
Nonesi Mall Maluti Crescent Moruleng Mall
Centre Centre
DIRECTION
STRATEGIC
MANAGEMENT
TREASURY
GAV R472mn R465mn R412mn R409mn R401mn
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Region Eastern Cape Namibia Free State Gauteng Northwest
Gross Lettable
Area 27 927m² 24 632m² 21 538m² 17 774m² 31 421m²
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Monthly Rental R126/m² R134/m² R133/m² R154/m² R120/m²
National Tenant
exposure 96% 93% 96% 84% 87%
PROGRAMME
DMTN
Vukile
Ownership 100% 100% 100% 100% 80%
Approx. ~ ~
6.7mn 5.9mn 4.2mn ~ 7.7mn 4.0mn
Q&A
Footfall
APPENDICES
Vacancy 0.7% Fully let Fully let 1.4% 4.7%
~ Estimate
Debt Capital Markets Roadshow - July 2018 52High quality retail assets
Top 15 assets (cont.)
Atlantis City Shopping
OVERVIEW
COMPANY
Meadowdale Mall Randburg Square Thavhani Mall Bloemfontein Plaza
Centre
DIRECTION
STRATEGIC
MANAGEMENT
TREASURY
GAV R399mn R397mn R396mn R341mn R331mn
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Region Gauteng Gauteng Limpopo Free State Western Cape
Gross Lettable
Area 47 553m² 40 767m² 53 509m² 38 255m² 22 115m²
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Monthly Rental R76/m² R100/m² R156/m² R87/m² R142/m²
National Tenant
exposure 72% 85% 89% 50% 77%
PROGRAMME
DMTN
Vukile
Ownership 67% 100% 33% 100% 100%
Approx. ~
9.8mn 7.2mn 8.7mn 8.6mn 9.6mn
Q&A
Footfall
APPENDICES
Vacancy 2.2% 8.6% Fully let 0.6% 2.2%
~ Estimate
Debt Capital Markets Roadshow - July 2018 53Retail tenant expiry profile
37% of contractual rent expiring in 2022 and beyond (WALE 3.7 years)
OVERVIEW
COMPANY
% of Contractual Rent Cumulative
100
DIRECTION
STRATEGIC
75
MANAGEMENT
TREASURY
63
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
47
29
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
18 25
16 12
Mar-19 Mar-20 Mar-21 Mar-22 Beyond Mar-22
PROGRAMME
DMTN
For the 12 months ended 31 March 2018 Retail leases were concluded with:
f Total contract value R1 235mn
Q&A
f Total rentable area 147 380m²
APPENDICES
f Tenant Retention 87%
Debt Capital Markets Roadshow - July 2018 54Retail tenant affordability
Consistently strong metrics
Retail Vacancy Profile by Rent Retail Average Base Rentals (excl. Recoveries)
OVERVIEW
COMPANY
DIRECTION
STRATEGIC
130,44
4,0%
122,88
3,9%
114,61
3,6%
108,14
3,4%
3,3%
3,3%
102,56
MANAGEMENT
TREASURY
86,86
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
Retail Contractual Escalations Retail Rent Reversions
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
12,3%
11,6%
8,0%
7,8%
7,6%
7,5%
10,8%
7,4%
7,3%
7,1%
PROGRAMME
DMTN
7,8%
6,9%
5,2%
Q&A
2013 2014 2015 2016 2017 2018 Recent New 2013 2014 2015 2016 2017 2018
APPENDICES
Leases and
Renewals
Note: Historic data per Company Annual Results.
Debt Capital Markets Roadshow - July 2018 55East Rand Mall 10,0%
Phoenix Plaza 7,7%
Randburg
Square 7,5%
Gugulethu
Square 7,1%
Debt Capital Markets Roadshow - July 2018
Thavhani Mall 7,0%
Ahead of industry benchmarks
Bloemfontein
Plaza 6,5%
Pine Crest 6,4%
Moruleng Mall 5,7%
Maluti Crescent 5,5%
Rent-to-sales ratio by Top 15 properties
Oshakati
Shopping 5,3%
Centre
Nonesi Mall 5,3%
Daveyton
Shopping 4,5%
Centre
Atlantis City
Shopping 4,5%
Centre
Meadowdale
Mall 4,3%
Dobsonville
Mall 3,8%
Southern
African Average 6,0%
APPENDICES Q&A PROGRAMME SPANISH PORTFOLIO RETAIL PORTFOLIO MANAGEMENT DIRECTION OVERVIEW
DMTN CASHFLOW - SOUTHERN AFRICAN TREASURY STRATEGIC COMPANY
DEFENSIVE CASHFLOW -
56
DEFENSIVERetail portfolio trading statistics by Top 15 properties
High trading density with solid growth ahead of market comparables
OVERVIEW
COMPANY
Annualised trading density Trading density like-for-like growth
2.1% 2.4% (0.6%) 7.7% 0.6% 0.1% 9.5% 0.9% 9.5% 6.2% * 0.2% 8.9% 10.3% 2.0% 2.2%
DIRECTION
STRATEGIC
MANAGEMENT
TREASURY
39 777
39 602
38 206
33 190
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
30 496
29 464
29 416
28 962
28 780
27 598
27 521
26 411
23 915
23 800
21 988
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
15 671
PROGRAMME
DMTN
Daveyton Dobsonville Phoenix Plaza Atlantis City Pine Crest East Rand Mall Maluti Crescent Oshakati Gugulethu Nonesi Mall Thavhani Mall Bloemfontein Moruleng Mall Meadowdale Randburg Southern
Q&A
Shopping Mall Shopping Shopping Square Plaza Mall Square African Average
Centre Centre Centre
APPENDICES
Note: Annualised trading density calculated using monthly trading density over 12 months. Trading density like-for-like growth calculated on stable tenants.
* Trading density like-for-like growth excludes Thavhani Mall as it is a recent development.
Debt Capital Markets Roadshow - July 2018 57Retail insights
Segmental allocation adding to defensive nature of portfolio
OVERVIEW
COMPANY
Segment Focus Tenants Focus
DIRECTION
STRATEGIC
Z Most of retail exposure (66%) remains in buoyant Small Regional and Z Majority of our category exposure remains in the inelastic grocery sector
Community Shopping Centres with 3.6% trading density growth and – accounting for c.22% of our income generated
stable vacancies Z This category accounts for c.R0.5bn in annual turnover within the
MANAGEMENT
TREASURY
Z Rural centres within the portfolio show higher trading density portfolio at a strong annualised trading density of R33 778/m², with a
growth of 7.0% credible average rent to sales of 2.7%
Z Rent-to-sales remains low creating a drawcard for tenants as cost of Z Bottle stores and Health and Beauty continue to show trading density
occupancy is low growth higher than inflation
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Z Average store sizes decreasing, leading to increased densities and higher Z Shoppertainment remains a strategic imperative. Shoppers desire
net rental opportunities experiential interactive forms of entertainment, which our AIM strategy
Z Multiple strategies to increase dwell time have yielded positive results will address
as the year on year footfall is showing increasing trends
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Segmental Profile - by Market Value Retail Portfolio Trading Statistics by Segment
By Market 0.1% 3.6% 3.5% (1.1%) (0.2%) (3.9%) 4.3%
Value
PROGRAMME
DMTN
13% Regional Shopping Centre
34% Small Regional Shopping Centre
35 592
32 348
30 081
32% Community Shopping Centre 28 211
24 122
8% Neighbourhood Shopping Centre
Q&A
17 763
13 835
8% Namibia
APPENDICES
2% Stand Alone Unit
2% Value Centre Regional Shopping Small Regional Community Neighbourhood Namibia Value Centre Stand Alone Unit
Centre Shopping Centre Shopping Centre Shopping Centre
Debt Capital Markets Roadshow - July 2018 58Retail portfolio trading statistics by category
Strong trading densities in core categories
OVERVIEW
COMPANY
Bottle Stores 13,4%
DIRECTION
STRATEGIC
Trading Density like-for-like Growth
MANAGEMENT
TREASURY
Health & Beauty 7,7%
Home Furnishings/ Art/ Sporting/ Outdoor Goods & Wear
Antiques/ Décor 5,3% Food 5,0%
5,4%
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Electronics 4,5%
Fashion 2,1%
Restaurants & Coffee Cell Phones 4,8%
Department Stores Shops 0,7%
(5k
sqm) (1,0%)
PROGRAMME
DMTN
Q&A
10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 50 000 55 000
APPENDICES
Annualised Trading Density
Note: Annualised trading density calculated using Monthly trading density over 12 months. Trading density like-for-like growth calculated on stable tenants.
Debt Capital Markets Roadshow - July 2018 59Edcon exposure
Support Edcon in their restructuring
Z Continue to critically assess our exposure to Edcon and manage appropriately over time
OVERVIEW
COMPANY
Exposure to Edcon based on GLA Action plan
DIRECTION
STRATEGIC
Z We have been in discussions with Edcon to restructure
MANAGEMENT
TREASURY
0,7% 5,7%
specific leases, including reducing store sizes and possible
Total 6,4%
store closures. 73% of the leases will remain unchanged
Z The space in question accounts for 6 233m² (0.7% of the
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
0,4% 3,2% total occupied GLA of the Southern African portfolio).
Jet
This would reduce Vukile’ s exposure to Edcon from
3,6%
6.4% to 5.7% of total occupied GLA
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Z The affected stores comprise 16 shops (6 Edgars Active
2,2% 8 Jet Mart and 2 Edgars shops)
Edgars 2,2% Z We have already negotiated offers for 3 436m² (55%) of
the space, mostly to second tier nationals, who generally
PROGRAMME
DMTN
pay higher rental than Edcon
0,26%
Edgars Active, CNA, Red Square Z The c.R5m effect of the restructured Edcon leases has
and Edgars Connect
0,4% 0,6% already been factored into our forecasts and form part of
Q&A
Vukile’s guidance for our next financial year
APPENDICES
Z We will continue to monitor and engage with Edcon as
Area to be reduced Area post restructuring .
part of our ongoing risk management
Debt Capital Markets Roadshow - July 2018 60Alternative Income Management
Starting to gather momentum
OVERVIEW
COMPANY
Z 41 new contracts concluded to deliver in-mall and out-mall advertising income
Z Court space income to increase with new agreement with Compass Communications
DIRECTION
STRATEGIC
(promotions division of Smollan Retail Solutions)
MANAGEMENT
TREASURY
Z Deployment of fibre to 37 malls
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Z Launch of free wifi at 17 malls* for shoppers via our digital platform to build our shopper database
Z Offer shoppers a “Fan Club” to drive shopper loyalty, personal offers and rewards
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Z Tenants are able to engage the shopper directly via the mall “Fan Club”
Z Seek to unlock value for tenants from our consumer behaviour insights and monetary value for shareholders
PROGRAMME
DMTN
from our shopper database
Q&A
APPENDICES
* Centres with cumulative GLA of c.0.5mn m² with monthly foot-traffic of c.11mn
Debt Capital Markets Roadshow - July 2018 61Extension and upgrade
Pinecrest Shopping Centre, Pinetown, KZN
OVERVIEW
COMPANY
Z Upgrading the existing centre and expanding the total GLA
from 40 087m² to 45 190m²
DIRECTION
STRATEGIC
Z A new mall, upgraded food court and an improved tenant
mix is being added to the centre
MANAGEMENT
TREASURY
Z New tenants include: HiFi Corporation, Spur, Old Mutual
and Galaxy Bingo
Z The centre has an average monthly footfall of 940 000
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
people
Z The new GoDurban! bus terminal will lead to increased
footfall and potential future development opportunities
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Location Additional GLA
Pinetown, KZN 5 103m²
PROGRAMME
DMTN
Commencement Date Total Capex
April 2018 R167mn
Q&A
Completion Date Projected Yield on Capex
APPENDICES
July 2019 7.9%
Debt Capital Markets Roadshow - July 2018 62Redevelopment in progress
Maluti Crescent, Phuthaditjhaba
OVERVIEW
COMPANY
Z Redevelopment to cater to nationals with
exceptional trading densities of greater than R40 000/m²
per annum who wish to expand their footprints
DIRECTION
STRATEGIC
Z Centre will be the largest enclosed mall in the town
MANAGEMENT
TREASURY
Z Pick ‘n Pay will be introduced as a second food anchor
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Z The trade area consists of 82 000 households
Z Flanagan & Gerard to handle development management
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Location Current GLA
Phuthaditjhaba, FS 21 538m²
Additional GLA Total Capex
PROGRAMME
DMTN
12 357m² R368mn
Commencement Date Projected Yield on Capex
September 2017 8.3%
Q&A
Completion Date Letting
APPENDICES
April 2019 75% committed by nationals
Debt Capital Markets Roadshow - July 2018 63Appendix C
Spanish Portfolio
www.vukile.co.za
www vukile co za
64Spain portfolio overview
Top 10 assets
Kinepolis Retail Park
OVERVIEW
COMPANY
Alameda Retail Park Parque Oeste Parque Principado Marismas Del Polvorin
and Leisure Centre
DIRECTION
STRATEGIC
MANAGEMENT
TREASURY
Value €55.3mn €49.4mn €45.6mn €32.6mn €28.8mn
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Province Granada Madrid Granada Asturias Huelva
Gross Lettable
Area 27 256m² 13 604m² 25 988m² 16 396m² 20 000m²
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Monthly Rental €10.71/m² €15.58/m² €9.44/m² €9.52/m² €7.69/m²
Sector Retail Retail Retail Retail Retail
Media Markt, Media Markt, Sprinter, Bricomart, Conforama, Media Markt,
PROGRAMME
DMTN
Major Tenants Decathlon, Mercadona
Kiwoko, Worten Aki Intersport Mercadona, Low Fit
WALE 2.6 years 4.7 years 6.1 years 3.3 years 3.7 years
Q&A
Vacancy 4.6% Fully Let 9.0% Fully Let Fully Let
APPENDICES
(i) Parque Oeste comprises two adjacent properties that were acquired in two separate companies, but has been treated as a single combined property for reporting purposes
Note: All data represents 100% of Castellana, Vukile shareholding is 98.7%
Debt Capital Markets Roadshow - July 2018 65Spain portfolio overview
Top 10 assets
OVERVIEW
COMPANY
Konecta Madrid La Heredad La Serena(i) Pinatar Park Mejostilla
DIRECTION
STRATEGIC
MANAGEMENT
TREASURY
GAV €20.1mn €19.2mn €15.4mn €11.6mn €6.4mn
RETAIL PORTFOLIO
SOUTHERN AFRICAN
CASHFLOW -
DEFENSIVE
Province Madrid Badajoz Badajoz Murcia Caceres
Gross Lettable
Area 11 046m² 13 653m² 12 605m² 10 637m² 7 281m²
SPANISH PORTFOLIO
CASHFLOW -
DEFENSIVE
Monthly Rental €10.26/m² €7.48/m² €6.63/m² €6.25/m² €6.58/m²
Sector Offices Retail Retail Retail Retail
PROGRAMME
DMTN
Aki, Mercadona, Aki, Mercadona, Aki, Eonomy Cash, Sprinter, Electrocash,
Major Tenants Konecta
Sprinter Electrocash, Sprinter Leclerc Aldi
WALE 13.2 years 3.5 years 3.3 years 4.2 years 8.3 years
Q&A
Vacancy Fully Let Fully Let 10.7% Fully Let Fully Let
APPENDICES
(i) La Serena comprises two adjacent properties that were acquired in two separate companies, but has been treated as a single combined property for reporting purposes
Note: All data represents 100% of Castellana, Vukile shareholding is 98.3%
Debt Capital Markets Roadshow - July 2018 66You can also read
