Interim Results for the six months ended 31 December 2015 1
Proceedings 2 Introduction Highlights Strategy Company Structure Management Structure Corporate Structure Shareholder Profile Financial Review Property Portfolio Pipeline Prospects Annexure A: Existing Portfolio Q & A Anadarko Building, Mozambique 2
3 INTRODUCTION 3
Introduction to Delta Africa 4 First African (excluding South Africa) focused property fund listed on the JSE and SEM Offers investors exposure to USD-yield investment Market capitalisation at 31 December 2015 US$139.6 million (Market capitalisation at 17 February 2016 US$143.1 million based on 81 785 009 shares x US$1.75 share price on SEM) Average property value - US$36.7 million Management team with over 45 years (of Africa) experience and relationships In-country asset and property management teams Property portfolio (current and pipeline) underpinned by long term leases with strong counterparties Mission Statement: To be the leading real estate owner on the African continent, outside of South Africa, within the next five years and to create significant value for our shareholders, ensuring consistent growth by creating strong partnerships, while making a real and meaningful impact in the countries we operate in 4
5 HIGHLIGHTS 5
6 Highlights (for the period ended 31 December 2015) Interim dividend US$6.17 cents per share 32.8% increase vs. 6 month period ended 30 June 2015 At current market price, this represents an annualised dividend yield of 7.1%* (SEM) and 10.6%* (JSE) Total investment property - US$257.0 million Morocco: US$99.4 million Mozambique: US$117.0 million Zambia: US$40.6 million Capital raised US$138.3 million (to date US$ 141.8 million, which includes capital raised during the interim reporting period up to 18 February 2016 of US$3.407 million at US$1.70 per share) NAV of US$175.39 cents per share (excluding FCTR movements) - US$161.78 cents per share in total Announcement of the Mara Delta Merger Announcement of the internalisation of the ManCo *Based on the SEM Trading Price of US$1.70 and JSE Price of ZAR 18.50 and ZAR:USD rate of exchange of 15.85 6
Delta Africa at a Glance 7 31 December 2015 Market capitalisation US$139.6 million note 1 Number of properties 7 Location of properties Targeted new jurisdictions Independent valuation of the property portfolio Morocco; Mozambique; Zambia Mauritius; Kenya; Nigeria; Tanzania; Botswana; Uganda US$257.0 million Gross lettable area 79 127m 2 note 2 Sectoral profile (by revenue) Retail: 70.6%; Office: 29.4% Occupancy rate 96.6% Weighted average rental / m 2 US$18.90 Weighted average escalation 6.01% Property LTV ratio 44.7% note 3 Funding costs Average all-in rate of 6.99% 1 - US$139.6 million market capitalisation figure based on 79 780 817 shares x US$1.75 share price on SEM 2 - GLA represents effective ownership in total GLA of Property in associated companies 3-53.8% including the short term equity bridge facilities 7
8 STRATEGY 8
Strategy 9 Targeted total return (income and NAV growth) in excess of 15% in USD on new acquisitions Leverage on existing knowledge base and experience in Mozambique and Morocco Grow portfolio based on quality USD based leases and strong counterparties Strategic partnerships in existing jurisdictions that will secure and strengthen in-country resources Countries with existing REIT structures will be prioritised Grow shareholder value and returns Tier 1 countries: Morocco; Mozambique; Zambia; Mauritius; Kenya; Tanzania; Botswana Tier 2 countries: Nigeria; Ghana; Uganda 9
10 COMPANY STRUCTURE 10
11 Management Structure BRONWYN CORBETT CEO GREG PEARSON HEAD OF DEVELOPMENTS HEIDI RIX* COO LEON VAN DE MOORTELE CFO PAUL SIMPSON COUNTRY EXECUTIVE - MOROCCO VACANT JUNIOR ASSET MANAGER KAREN BRAMLEY* COUNTRY EXECUTIVE- EAST AFRICA VACANT JUNIOR ASSET MANAGER JEREMY COOPER* HEAD OF INVESTMENTS VACANT JUNIOR INVESTMENTS MANAGER MIKE SEWELL HEAD OF ACQUISITIONS KAI MARINI JUNIOR ACQUISITIONS MANAGER JACO VAN ZYL* GROUP FINANCE MANAGER ASHWIN METURJEET* FINANCE MANAGER - MAURITIUS EDSON NEVES* FINANCIAL MANAGER - MOZAMBIQUE KIRSTEN LEWIS OFFICE MANAGER/ EXECUTIVE ASSISTANT TREVOR MATTHEWS SENIOR OPERATIONS ASSET MANAGER DAVILSON JOSE ACCOUNTANT - MOZAMBIQUE OJONG NSO OPERATIONS ASSET MANAGER BENYAMIN BELHAJ OPERATIONS ASSET MANAGER - MOROCCO GLORIA MACAMO JUNIOR ASSET MANAGER ROSA DIAS JUNIOR ASSET MANAGER MOHAMMED BOUIBAOUNE SENIOR ACCOUNTANT BOUCHRA EL FAOUZAOUZ* FINANCIAL CONTROLLER KENZA KAGHAT* MARKETING MANAGER AMINE BENYAHIA* ASSISTANT MARKETING MANAGER 11 *New appointments to cater for current and future expected growth
Corporate Structure 12 Delta Africa Property Holdings Limited (Mauritius) (SEM and JSE Listed) 100% Delta International Mauritius Limited (Mauritius) 97% 100% Delta International Bahrain (Bahrain) 100% Ndola Kafubu Investments Limited (Mauritius) 100% Kitwe Mukuba Investments Limited (Mauritius) 100% DIF 1 Limited (Mauritius) 100% HM & K Properties Limited (Mauritius) 100% SAL Investment Holdings Limited (Mauritius) 100% Zimpeto Investment Holdings Limited (Mauritius) 100% Freedom Property Fund SARL (Morocco) Anfa Place Shopping Centre Casablanca, Morocco 50% 50% Kafubu Mall Limited (Zambia) Kafubu Mall, Ndola, Zambia Mukuba Mall Limited (Zambia) Mukuba Mall, Kitwe, Zambia Commotor Limitada (Mozambique) Hollard Building Vodacom Building Maputo, Mozambique 95% 97% 3% 5% S&C Immobiliaria Limitada (Mozambique) Anadarko Building Maputo, Mozambique 3% Zimpeto Immobiliaria Limitada (Mozambique) Zimpeto Square Maputo, Mozambique 12
13 Shareholder Profile (Top 5 Shareholders) As at 17 February 2016 Units held Holding Government Employees Pension Fund 23 854 464 29.17% Delta Property Fund Limited 23 405 584 28.62% Stanlib 6 639 793 8.12% Bowwood & Main No 117 (Pty) Ltd* 5 746 061 7.03% Anchor Capital 6 565 176 8.03% Subtotal 66 211 078 80.96% Other 15 753 930 19.04% Total 81 785 008 100.00% *Management ownership 13
14 FINANCIAL REVIEW 14
Financial Overview 15 6 months to 31 Dec 2015 12 months to 30 Jun 2015 Dividend per share (USD cents) 6.17 11.28 Cost to income ratio 17.1% 25.0% Property LTV 44.7% 48.3% NAV per share (excl. FCTR) (USD cents) NAV per share (incl. FCTR) (USD cents) 175.39 161.78 168.91 169.98 Weighted average rental/m² US$18.90 US$27.00 Average rental escalation over the next 12 months # 6.0% 3.4% # # Includes step up rental for the initial 3 year lease term on certain Anfa leases. Normalised annual escalation of 3.38% 15
16 Distributable Income Statement 6 months to 31 Dec 2015 USD 000 12 months to 30 Jun 2015 USD 000 Net property income 8 615 10 440 Rental income 10 390 13 918 Property operating expenses (1 775) (3 478) Other income and income from associates 879 384 Administrative expenses (1 826) (1 711) Net finance costs (5 326) (3 549) Realised foreign currency gain 2 850 552 Taxation (268) 446 Retained distributable income (2) (175) Distributable income for the period 4 922 6 387 Number of shares in issue 79 780 817 79 780 817 Dividend per share (USD cents) 6.17 11.28 Cost to income % 17.1% 25.0% 16
Statement of Financial Position Assets 31 Dec 2015 USD 000 30 June 2015 USD 000 Non-Current assets 263 320 210 698 Investment property 220 665 210 391 Other non-current assets 42 655 307 Current assets 33 341 25 343 Total assets 296 661 236 041 17 Equity and liabilities Total Equity 129 067 124 413 Interest-bearing liabilities - Properties 131 538 101 657 Interest-bearing liabilities Equity bridge 27 073 - Other Non-current liabilities 191 807 Current liabilities 8 792 9 164 Total equity and liabilities 296 661 236 041 Net asset value per share (cents) 161.78 168.91 17
18 PROPERTY PORTFOLIO 18
19 Portfolio Overview (31 December 2015) Modern retail and office assets with attractive tenant mix located in African countries with strong fundamentals Portfolio Metrics Portfolio summary by geography and type (by asset value) Retail Office Total Number of properties 4 3 7 Acquisition cost (US$m) 166 96 262 Independent Property Value ($m) 151 106 257 16% 45% Mozambique Morocco Weighted Average 7.96% 9.27% 8.00% Capitalisation Rate 2 39% Zambia WALE (years by income) 6.14 years 6.17 years 6.15 years Weighted Average Lease 7.84% 4.40% 6.01% Escalations 1 Weighted Average Gross US$ Rental per m2 per month 12.80 33.00 18.90 GLA (sqm) 2 55,828 23,299 79,127 Occupancy (by GLA) 95.2% 100.0% 96.6% Notes 1 Effective increase from FY2015 to FY2016 2 - GLA represents effective ownership in total GLA of Property in associated companies 41% Retail 59% Office 19
Geographic Spread 20 Morocco Population (million) 33.0 GDP (USDbn) 104.1 Real GDP growth rate (%) 4.4 GDP / Capita (USD) 3 155.2 CPI (%) 1.9 Credit rating Nigeria BBB- Population (million) 179.0 GDP (USDbn) 569.0 Real GDP growth rate (%) 9.19 GDP / Capita (USD) 1 092 CPI 9.3 Credit rating B+ Zambia Population (million) 15.2 GDP (USDbn) 27.07 Real GDP growth rate (%) 7.1 GDP / Capita (USD) 1 081 CPI (%) 1.54 Credit rating Sources: EIU, Standard & Poor s Note: 1. 2013 information; 2. Credit rating based on Standard & Poor s local currency rating B Current presence Target jurisdictions 20 Kenya Population (million) 45.6 GDP (USDbn) 60.94 Real GDP growth rate (%) 3.8 GDP / Capita (USD) 649.0 CPI (%) 6.72 Credit rating B+ Mozambique Population (million) 25.8 GDP (USDbn) 15.3 Real GDP growth rate (%) 7.1 GDP / Capita (USD) 592.5 CPI (%) 4.2 Credit rating B Mauritius Population (million) 1.3 GDP (USDbn) 12.6 Real GDP growth rate (%) 3.2 GDP / Capita (USD) 54 629 CPI (%) 7.16 Credit rating Baa1
21 ACQUISITIONS: DURING THE PERIOD (1 JULY 31 DECEMBER 2015) 21
Zimpeto Square 22 Location: Anchor tenant: Sector: Land title: Maputo, Mozambique Retail Masters, Edcon Retail Leasehold (50+50 years) GLA: 4 764m 2 Parking bays: 136 Anchor lease term: Anchor tenant lease expiry: 10 years May 2024 / 6.5 years Vacancies: 0% Average escalation: Valuation: 4.1% p.a. US$ 11.0 million Acquisition yield: 10.1% Type of purchase: Purchase of building 22
Kafubu Mall 23 Location: Anchor tenants: Sector: Land title: Ndola, Zambia Shoprite Retail Leasehold GLA: 12 141m 2 Anchor lease term: 8.5 years Anchor tenant lease expiry: April 2024 Average escalation: USD CPI p.a. Valuation: US$17.4 million (100%) Acquisition yield: Type of purchase: 7.75% (7.20% in Mauritius) 50% Purchase of Mauritius SPV 23
Mukuba Mall 24 Location: Anchor tenants: Sector: Land title: Kitwe, Zambia Shoprite, Game, Pick n Pay Retail Freehold GLA: 28 229m 2 Anchor lease term: 4.5 years Anchor tenant lease expiry: March 2020 Average escalation: USD CPI p.a. Valuation: US$63.1 million (100%) Acquisition yield: Type of purchase: 7.75% (7.20% in Mauritius) 50% Purchase of Mauritius SPV 24
25 ACQUISITIONS: AWAITING TRANSFER (CURRENT) 25
Barclays House 26 Location: Ebene, Mauritius Anchor tenant: Barclays Bank Sector: Office Land title: Leasehold GLA: 7 700m 2 Parking bays: 150 Anchor lease term: 12 years Anchor tenant lease expiry: 2028 Average escalation: CPI Vacancies: 0% Valuation: US$14.0 million Acquisition yield: 8.30% (7.40% in Mauritius) Type of purchase: Purchase of building 26
Vale Compound 27 Location: Anchor tenants: Sector: Land title: GLA: Anchor lease term: Tete, Mozambique Vale and Barloworld Commercial / Residential Leasehold (50 + 50 years) 83 x 3 bed villas 40 x 2 bed apartments Anchor tenant lease expiry: 2023 and 2019 Average escalation: Vacancies: 0% Valuation: Acquisition yield: Type of purchase: 7 years Vale, 3 years Barloworld 3% p.a. US$35.7 million 9.80% (7.80% in Mauritius) Purchase of Mauritius SPV 27
Bollore Warehouse 28 Location: Pemba, Mozambique Anchor tenants: Bollore Africa Logistics Sector: Light industrial Land title: Leasehold GLA: 6 374m 2 Parking bays: 10 Anchor lease term: 4.5 years Anchor tenant lease expiry: March 2020 Average escalation: 0% Vacancies: 0% Valuation: US$8.0 million Acquisition yield: 10.90% (7.60% in Mauritius) Type of purchase: Subject to negotiation 28
Buffalo Mall 29 Location: Naivasha, Kenya Ownership interest: 50.0% Anchor tenant: Tuskys Sector: Retail Land title: Leasehold GLA: 6 616m 2 Parking bays: 250 Anchor lease term: 15.0 years Anchor tenant lease expiry: 2030 Average escalation: 3% p.a. Vacancies (GLA): 1.9% Valuation: US$10,4 million (100%) Acquisition yield: 6.4% (2.5% in Mauritius) Type of purchase: Share Purchase. Mauritian holdco 29
Wings Office Towers 30 Location: Lagos, Nigeria Ownership Interest: 37.1% Anchor tenant: Oando PLC Sector: Office Land title: Leasehold GLA: 27 812m 2 Parking bays: 700 Anchor lease term: 10.0 years Anchor tenant lease expiry: 2026 Average escalation: 3% p.a. (4.5% p.a. from year 4 onwards) Vacancies (GLA): 41.3% Valuation: US$280.0 million (100%) Acquisition yield: 9.4% (6.9% in Mauritius) Type of purchase: Share purchase. Mauritian holdco 30
31 Portfolio Overview (Post Acquisitions) Modern retail and office assets with attractive tenant mix located in African countries with strong fundamentals Portfolio Metrics Retail Office Corporate Accommodation Light Industrial Number of properties 5 5 1 1 12 Total Portfolio summary by geography and type (by asset value) 1% 3% Mozambique Acquisition cost (US$m) Independent Property Value ($m) Weighted Average Capitalisation Rate WALE (years by income) 172 220 33 9 434 157 229 36 9 430 7.96% 8.98% 9.72% 10.18% 8.39% 6.07 years 6.23 years 6.05 years 4.22 years 6.11 years 25% 10% 23% 38% Morocco Zambia Nigeria Kenya Mauritius Weighted Average 7.72% 4.09% 3.00% 0.00% 4.88% Lease Escalations 1 Weighted Average Gross US$ Rental per m2 per month 13.9 40.9 21.7 11.8 24.2 GLA (sqm) 2 58,838 41 317 12 966 6 374 119,495 2% 8% 37% Retail Office Occupancy (by GLA) 95.3% 100.0% 100.0% 100.0% 97.7% The table above includes the following announced acquisitions: Barclays House Bollore Warehouse Vale Compound Buffalo Mall Naivasha Wings Office Towers Notes 1 Effective increase from FY2015 to FY2016 2 - GLA represents effective ownership in total GLA of Property in associated companies 53% Corporate Accomodation Light Industrial 31
32 PIPELINE 32
Pipeline 33 Existing Assets Average Yield: 7-9% (in Mauritius) Funding: Combination of equity issuance, debt and vendor share placement Region Asset Gross Asset Value Mozambique A-Grade Office $67m Ghana A-Grade Office $22m Kenya Education $45m Botswana Diversified Property Portfolio $85m Zambia Cosmopolitan Mall $38m TOTAL $257m 33
Pipeline 34 Developments Average Yield: 10-14% (in Mauritius) Region Asset Gross Asset Value Mozambique A-Grade Retail $20m Mozambique A-Grade Retail $30m Tanzania P-Grade Offices $77m Tanzania A-Grade Retail $154m Kenya A-Grade Retail $15m Kenya A-Grade Retail $26m TOTAL $322m 34
35 PROSPECTS 35
Prospects 36 Successful conclusion of the Mara Delta Merger Right of first refusal over development pipeline Extensive development pipeline (Abland) Strategic Shareholder Agreement (Pivotal) Access to R300 million to fund Pipeline Growth of management team and depth of experience Access to international debt and capital markets Expansion/diversification of real-estate asset classes Critical mass (first-mover advantage) Strong relationships with international tenants 36
37 ANNEXURE A: EXISTING PORTFOLIO 37
Anfa Place Shopping Centre 38 Body Text Location: Anchor tenants: Sector: Land title: Casablanca, Morocco Carrefour, M&S, H&M, Virgin Megastore, McDonalds, Starbucks, Burger King Retail Freehold GLA: 30 879m 2 Parking bays: 1 148 Anchor lease term: 3 + 3 + 3 years Anchor tenant lease expiry: 2021 Average escalation: Vacancies: Valuation: 10.0% every 3 years 0.31% in shopping mall 7.33% in street mall US$104.7 million 38
Anadarko Building 39 Body Text Location: Anchor tenant: Sector: Land title: GLA: Maputo, Mozambique Anadarko Petroleum Office Leasehold (50+50 years) 7 805m 2 (plus 4 000m 2 second phase) Parking bays: 185 Anchor lease term: 15 years Anchor tenant lease expiry: May 2028 Weighted average escalation: PPI + 2.5% Vacancies: 0% Valuation: US$ 41.2 million 39
KPMG / Hollard Building 40 Body Text Location: Anchor tenant: Sector: Land title: Maputo, Mozambique KPMG, Hollard & BP Office Leasehold (50+50 years) GLA: 4 945m 2 Parking bays: 99 Anchor lease term: 3.5 years Anchor tenant lease expiry: Feb 2018 Weighted average escalation: 4.1% Vacancies: 0% Valuation: US$ 18.6 million 40
Vodacom Building 41 Body Text Location: Anchor tenant: Sector: Land title: Maputo, Mozambique Vodacom Office Leasehold (50+50 years) GLA: 10 660m 2 Parking bays: 336 Anchor lease term: Anchor tenant lease expiry: 10 years Dec 2020 / 5.9 years Weighted average escalation: 5.0% Vacancies: 0% Valuation: US$ 43.4 million 41
42 Body Text Q & A 42
43 Body Text THANK YOU 43