Attacq Limited (ATT) Earnings Call Transcript & Summary

All right. Good afternoon, everyone. Welcome to the Attacq pre-close call for the financial year 2021. Brenda, I assume you're ready to kick off?

Hi, Dana. Thanks so much for hosting us, and thank you for [ available. ]

Pleasure.

And there's still people joining us at the moment, so maybe just give it another minute.

Absolutely. I'll give it to...

Thanks, Dana. I think we're ready to go.

Super. Thanks, Brenda. Once again, for those who just joined, welcome to the Attacq pre-close call for the financial year 2021. It's a pleasure to welcome Jackie and the Attacq team who will take us through a presentation. There will be a number of speakers, which we will go through. Michael Clampett joins. He is the Head of Property and Asset Management, recently joined the exco; that will be followed by Giles, who will talk us through some of the developments; Peter, who will talk us a bit about some of the investments and then we'll finish off with Raj who will do the interesting bits on the financials. So if I can hand it over to you, Jackie. Thank you very much.

Good afternoon, everyone. And let us start by thanking the Avior team for arranging and hosting us this afternoon. So thank you so much, guys. As you've seen, we've got multiple speakers today. And I think if we could kick off introducing exco. As you've seen, we have recently appointed Michael Clampett as the asset management executive and Michael will take us through the property update. Giles will do some sales jobs on all of the new schemes we have launched today. Pete will take us through MAS and then Raj will take really into the meaty stuff, and going through especially updated refinance today. So Brenda, if I can please ask you if you can go to the second slide. Next one. Thanks so much. If we stand still and look back at not just the last quarter, but actually looking back at the last financial year -- the last 18 months, our focus in Attacq, we've really put a tactical plan in place. We set ourselves to get through the uncertain downtime of this pandemic, which we're in level 3 lockdown, and we will touch a bit on how do we see the future play out a bit. And with these uncertain times, we've really stuck to 3 basic principles within Attacq, and it gives us great pleasure today to share some stats with you guys, and also to share some execution wins that the Attacq team has achieved over the last few months. In our SA portfolio, operational performance has been strong. We will take you through the malls trading update. We do, however, see the office sector headwinds over the medium term. Work-from-home is definitely not something that's going to disappear in the near future. We do not even see the need for office space. Our teams are just working on what is going to be that optimal level of -- what is that optimal office going to be and what the work-from-home impact will be. But we're definitely seeing in our renewal cycles with our office tenants, the tenants are renewing, but they are substantially in certain cases, reducing in size. Reported seeing some wins in the office space where we had teams requesting more space. So it's definitely a medium-term headwind and our team really focusing through client retention programs that we are introducing to ensure that we retain our tenants, we retain certain retail levels as it is a good product that we are providing, especially in the Waterfall Precinct. You'll recall at the last interim results presentation, we were about to launch SHôPING. We have launched SHôPING at -- in Mall of Africa. Michael will go into a bit more detail of what SHôPING is, and the app, the virtual gift card, and really providing a shopping experience in our malls. It's still early stages of further launching and testing, but really exciting for us as Attacq embracing the digital enablement in our malls and really trying to bridge the gap between being in the palm of your hand, but also having a bricks-and-mortar shopping experience. And then we have said that we've appointed Michael. In the development field, our teams have really been busy. And you'll note over the last, I would say, 2 weeks, we've launched our second residential development rollout, that's called The Mix at Waterfall, completely different offering of what Ellipse -- the 4 Ellipse Towers is. This is aimed at the young market. It's much smaller apartments. It's around about 400 apartments, very close to the mall, and Giles will spend a bit of time today just sharing with you the exciting marketing campaign that we have launched, The Mix. In our new developments, we have completed about 21,000 new developments over the last financial year. We've kicked off just under 30,000 square meters of development, which includes Cotton On, Corporate Campus - Building 6, which is also fully let, pre-completion. And then we have also further approved a further 27,000 square meters of tenant-led developments. Of that, we cannot disclose the tenant details, but it's a combination of office and also strong industrial [ inquiries ] and as well as logistic tenants that we have signed up and we're finalizing the last bit of paperwork. So standing back and looking at the demand for new developments, we've certainly seen the demand has definitely picked up over the last 6 months, transactions that our teams have been working on for the last 12 months. Over the last 6 months, we've really seen traction and the corporates committee to new office space. And really, Waterfall, especially the logistics section has been a winner for the last 3 to 4 RFPs that we have put out through the market. So very, very positive momentum the team has gained over the last 6 months. Then if we stand still on our capital structure, and this is really where the tactical plan for us. It was very, very important for us, protecting our balance sheet, but also providing us enough firepower to unlock these opportunities as they come about. Our liquidity levels is currently at ZAR 1.7 billion. The team, and Raj, Pete and their teams have refinanced ZAR 5.4 billion worth of debt, which is currently being implemented, that have already been approved, and Raj will take you through some of the covenant conditions [ and waivers ] that we have received. We've recycled capital of ZAR 2.2 billion or ZAR 2.3 billion of disposals and we're expecting another ZAR 500 million of disposals in the next 2 weeks. So really hitting our target of ZAR 2 billion, and then also taking an opportunity with furthering the disposals and ensuring that our capital structure is robust. We are continuing the exit strategy of the Rest of Africa as we've also experienced some headwinds in some of the transactions. But the collective approach of the recent Africa JV with [indiscernible] and Hyprop definitely a focus to exit the investment in the most responsible manner. We continue with no guidance for the year, as we've just entered the level 3 lockdown. Implications for us, we particularly watching the restaurant industry. The curfew has got quite a ripple effect on the evening trade. And we've also seen that since last week, the footfall is starting to, I want to say the people are less feet to the mall. So we're definitely monitoring the tenants. We're monitoring the trading densities and where we are seeing a material impact by the curfew and the level 3 lockdown restrictions, we all must definitely see how we assist and help to taking us through once again another lockdown. I'm going to ask Michael to share with you a bit of SHôPING and the launch, and then just to provide you an update on the trading densities, the occupancy as well as the collections over the last quarter.

Thank you very much, Jackie. Good to see a couple of familiar names on the call this afternoon. So quite interesting. We have property REIT, and the divider slide does not have a property on it. So what is SHôPING. It's an MVP or minimum viable product that we launched at Mall of Africa in May. It's also a step towards this omnichannel world. We did a lot of research and found that there was a need to digitize gift vouchering to enable people to send and receive these gifts, whether it's corporate or individuals. But we've also created a platform where some of our mom-and-pop tenants that don't necessarily have the human capital or the financial capital to create the own digital experiences or loyalty programs to adopt the platform that we've created for free. And that allows them to create their own royalty programs in the form of stamp cards, and we've seen some great adoption for that. So it doesn't just serve the end consumer or customer, but also serves our retail tenants, and we're very excited to learn as we walk along this journey. Brenda, we can go to the next slide. So quickly just stopping at the occupancy levels as at the end of May 2021, and comparing them to previous year end. You will notice a slight drop in the retail section, mostly due to the 5-year renewable cycle that was entered into at Mall of Africa in April of this year. With that, obviously, there were some decisions that needed to be made. And if a tenant struggled to continue, we elected not to renew that lease. So that occupancy figure should become healthier as we retain some of the tenants we didn't renew in April. In the office and mixed-use section, a really nice move from an occupancy point of view. But if you do your math on the occupied GLA, you will see that, that became smaller. Just a note that the Eglin building has been removed from that figure from May. But it's not just the Eglin building that created positive movement there. Also a couple of great office lets by the team and the staff environment in our Gateway Building, our Corporate Campus, and that also contributed to the strengthening of that occupancy number for offices and mixed-use. Also just a note there that after this reporting period, another 3,500 square meters has been let, so those are leases signed. Once again, just a strong indicator on the actual deal flow and the fact that we are able to conclude some of these deals. The next 2 slides, we're just going to stop at the retail portfolio quickly and just give you an oversight of what has happened. So just a bit of help and assistance in reading this, it could be a bit busy. So there's a gray line. And at the bottom, you will see there's a 2020 note on sort of lockdown levels that fits with the gray line and at the -- with the red line, similar with the 2021 indicators of which levels we've entered into. And what we're trying to demonstrate here is that the retail portfolio from a trade perspective was actually quite healthy pre the first lockdown. So it peaked at about 106.5% of the 2019 number for February, just before going into lockdown. You can then see the gray curve really dropping off as we went into lockdown and then recovering slowly. Once again, just a note of that slight little dip in December and Jan as we went into the second wave and the concurrent level 3 lockdowns that was implemented. You could once again see a small drop off in our turnover levels compared to 2019, but happy to say that since February for the retail portfolio, we've been trading collectively above the 2019 turnover number. So certainly, that's been a very positive indicator. I'm also happy to say that it's clear from the graph that it's not a once-off. It consistently happened since Feb. And we're keeping our eyes very closely on this third wave and the potential impact on our turnover, but we believe our assets have had a period in which they could stabilize before this third wave. If we look at the foot counts on the next slide, it tells a different story. And a question that we ask ourselves is how permanent is this kind of new trend with regard to foot count. So you'll see that foot counts achieved a peak of 107.2% of the 2019 number for February, and then obviously dropping off during the hard lockdown phases, recovering somewhat. But at the end of May, still sitting at about 84.3% of 2019 number. And you will also see that, that trend is pretty consistent. So once again, potentially an indicator of a new level or a new normal when it comes to frequency of visit to the asset. So what this does tell us is that the turnover is definitely there. So as we all know, basket spend increased, but potentially frequency of visit impacted. And so shoppers are making less trips, but still spending the same or roughly the same amount of money at the retail centers. If we look at the collections, and this has been a big focus ever since the hard lockdown of April, May last year. You'll see that for the year-to-date, the 11 months up to May, the collection percentage is just above 100%. Where does that come from? Well, of course, there were some arrears at the end of June 2020, we mean that period of uncertainty. So that's where some of the recovery comes from. But really, I believe this is a good indicator of not only the amount of rental that we charge, but also the quality of that rental that we can collect on a monthly basis. As you can clearly see here, the collection is quite consistent without big peaks and troughs. So once again, very confident that, that trend should continue. From a deferral point of view, maybe an indicator of ability to pay from a tenant perspective. You will see that the number for discounts and deferrals is significantly less for the 11 months to May than it was for June 2020. Also the bulk of that sits kind of in the first quarter of the 2021 financial year. And recently, we've been able to continue without entering into too many deals of assistance. There are certain categories still struggling, specific reference to restaurants and personal services. But after 17 months of this pandemic, in some cases, new leases have been entered into at more sustainable levels for where those businesses trade today. And that's it. Giles?

Thanks, Mike. Thank you. Welcome, everybody. I think what we want to -- what I wanted to demonstrate here, just show to the audience was now the next phase of our residential rollout in the city. This is a prime gateway site on the northern side of the mall parking structure, which is on the left, you can see that deck. And on the right is adjacent to the Gateway West office tower, which is now completely 100% occupied. The idea behind The Mix was for Attacq to introduce a very different residential product than Ellipse which has been exceptionally successful for us, currently on ZAR 1.1 billion in sales in the Precinct. By way of research, it came out and feedback was buyers were very keen to live in Waterfall, but ones in a sort of a tone down product, rather than the luxury resort style precinct that the Ellipse was offering. We previously looked at the site for residential and felt that its adjacency to the mall gave quite a lot of opportunity for us to have a completely integrated product here. So these are 47 -- 42, should I say, 42 square meter average sized units. There's 403 of them across the volume, across 14 floors, heavily packed with amenities. So this is targeting your entry-level purchaser into Waterfall, selling price averaging around ZAR 37,000 a square meter. So it's on par with Ellipse from a sales rate per square meter, but much small units. Every unit does get a balcony, concierge services. There is yoga studios, gym, rooftop bar and restaurant and the pool deck. As I said, yoga studios and laundry facilities, et cetera. Every unit comes with a parking bay. And I think the -- with 86% of the units between 40 and 60 square meters [indiscernible] total purchase price down the chain, so that's a lower entry-level price. That's sitting somewhere between ZAR 1.2 million and ZAR 1.3 million, including the parking bay. So that's launching next Friday. We are taking registrations as of the beginning -- as of the 12th of June, and we've now exceeded -- expression of interest has now exceeded the total number of units in the block. So I think from our perspective, we are expecting quite a fast sale on this, right product, right place, right time, right price. So very, very happy for this. If I can go to the next slide, please, Brenda? Just to reiterate you're looking again at the picture, I think a number of you have seen historically. We have just changed slightly the colors on this. The light blue is pipeline development. So those are schemes that are approved through investment committee are ready to go in the grant or going through a sales process, which is quite healthy. The other blue are schemes that are not yet ready to take to IC. This [indiscernible] progressed with strong special interest in those buildings and either future phases of multi-building precincts while we targeted towards an end user request to tap into Waterfall. Two buildings have been constructed and that's being the Corporate Campus -- Building 6 in yellow, and the Nexus Building 1 of the Nexus Precinct. So still quite a lot of activity focusing on the western side of the city. Corporate Campus is almost coming to an end now with its buildings, 1 to 12; and 6 and 7 are now complete, been very successful for us. And then the focus then will be back into the Nexus and Ingress Precincts [indiscernible] next slide, please, Brenda? Cotton On, under construction, proceeding exceptionally quickly on that. The other 4 blue is pipeline. We are in the ground on one of those, and the other 3 are at various stages of proposal or approval for design. I think what this picture does start to demonstrate is that our logistics has been exceptionally successful, but we are now coming to the point of to a degree running out of industrial land or logistics land within the precinct necessitating us opening up further parcels of land. If you go to the next slide, please? That's the LP 22 Precinct, which is up -- we've got Amrod plus the 2, Woodmead and the Buccleuch interchange. That is another industrial or logistics -- it's a distribution center that has been approved at IC. We're currently under [indiscernible] but it is part of the approved numbers that are in the table at the back of the -- of this presentation, which makes up the 27,000 squares approved. Next slide, please, and then I think over to Peter.

Thanks, Giles. And as we stated, we have been watching since the last 6 months, we have seen [indiscernible] in disposing off MAS shares. There's a summary on the slide presented. As can be seen, we've disposed off just under ZAR 1.4 billion of MAS shares in the last 6 months for a total of market -- totaling just under 101 million MAS shares. The proceeds have been used to reduce our euro debt. So the [indiscernible] to make our final repayment. We will fully settle our euro debt, which I think is positive from a rand-euro currency exchange perspective. And then the balance will go into our SA debt. The MAS shares price has recovered quite nicely over the last 6 months after hitting lows during COVID. So we've taken advantage of the rising share price and definitely the increased appetite for the MAS share to derisk our balance sheet. We're left with approximately 46 million shares, and we intend holding those for the medium to long term, hoping that we can see some further capital growth out of the stock as well as hopefully return to resumption of dividends. I think part of the reason why the MAS share has recovered is partly due to actions of MAS management. They've done very well in exiting their Western European property positions at attractive prices. And I think nothing poise an investor better than cash sitting on the balance sheet waiting to be redeployed by a very competent management team. And then perhaps from our side, I think there was definitely a perceived overhang in the market that Attacq would be disposing off shares or forced to dispose off shares. So we took advantage of the appetite and did what we could to derisk our balance sheet and then also to increase our investment capacity. So it's quite simple. We're down to 6.49%. And it's quite easy from an investor perspective to value that stake on our balance sheet going forward. It's just the share price times the number of shares at any given time. And I think it also simplifies our investment proposition to the market. With that, I'll hand over to you on next slide. Raj?

Thanks, Pete. Brenda, if you can go to the next slide? Thanks. So I think I've got 3 slides really just focusing on maybe 2 elements, the disposals and the recycling of capital. And then how that has impacted, call it, our debt as well as the debt refinances that we've been busy with. So if you look at the slide, talking to 3 -- sorry, Brenda, can you go back? Talking to 3 assets that we've been busy with in terms of disposal processes; 2 Eglin Road, you'll recall that closed in December, transaction value of just over ZAR 76 million. That deal closed, proceeds received. Pete's taken us through the various transactions on MAS share sales, that all of those have closed as well, realizing just under ZAR 1.4 billion worth of proceeds against the carrying value at December of roughly just under ZAR 1.3 billion. So we've realized quite a quite a substantial cash amount from those disposals. And then something that we've communicated by our SENS announcement, the sale of the Deloitte head office building, currently awaiting competition authority approval selling price there, ZAR 850 million against a book value of about ZAR 834 million as per the December carrying value. So total proceeds, ZAR 2.3 billion, a substantial amount. You'll recall last year, we set ourselves a target of about ZAR 2 billion in disposals for us to recycle that capital into our debt. I think we've achieved sort of 15% more than that target. We've got a few transactions that we are still working on. And I think one that has progressed quite far down the line has received IC approval by both parties and something that we hopefully will be able to announce in the next couple of days or weeks, and that transaction will also contribute to our -- according to our overall debt reduction plan. We quite often get a question around what's the impact of the disposals on your balance sheet and your income statement in terms of your credit metrics? So what we've done here at the bottom of the slide, on the left-hand column is the December 2020 interest cover ratio and gearing ratio as we've reported for that period, 1.4x interest cover, a gearing ratio of 46.3%. And on the right of that, we've done a pro forma calculation. So I'll briefly explain what we've done there. We've assumed that the disposals on the top table were all concluded by 1 July 2020, being the beginning of the previous 6-month period. We've applied all the proceeds to our debt, obviously, in some instances, we forfeited the income that we've received from those assets, but then also save on the interest costs. We've then used the December valuations that we've disclosed, and then calculated a pro forma gearing ratio. So if you look at the interest cover ratio on a pro forma basis, that improves from 1.40x to 1.51x. And then the gearing ratio, quite considerable as well from 46.3% down to just over 40 -- at 40.4%. So I think in my mind, a substantial progress made in terms of our debt reduction over the last sort of 6 months. And like I said, we've got maybe a handful of transactions that we're still working on, one that's been quite advanced. And hopefully, we'll be able to disclose some of that information very shortly. Brenda, maybe on to the next slide. A bit of a busy slide. So I'm going to talk about the table up on the top towards the right. The column on the right-hand side, that discloses the information as per our December 2020 results, total gross debt of just over ZAR 11.5 billion, comprising of rand-denominated debt of ZAR 10.5 billion, and then euro debt of just over ZAR 1 billion equivalent, giving us a weighted average loan term of 2.8 years, total hedge percentage of just under 75% and a weighted average term of our hedges of 3.3. Where we are at the end of May, total debt reduced to ZAR 10.87 billion, comprising of rand-denominated debt still at about ZAR 10.5 billion. But you can see the euro debt has reduced significantly by about ZAR 660 million equivalent. And that talks to what Pete was saying just now around the process that we've used to be -- that we've used to pay down some of our euro debt. Then the left column is the post-refi column. So as mentioned by Jackie, we've -- the team's been quite busy refinancing 2 major facilities, 1 being the Mall of Africa facility of ZAR 2.4 billion and the ARF, LBOP facility of ZAR 3.25 billion. Those 2 facilities contributing to the majority of our total rand-denominated debt. Our team has made great progress on that. In terms of the Mall of Africa debt, that's been credit approved. We are finalizing legal agreements on that. That's quite a quick execution based on existing legal agreements that we have in place and just short addendum's required. And on the ARF side, also credit approved allocation has been awarded. I think first draft of the legal has been received, and we're also expecting to close that together with the Mall of Africa finance before the end of this financial year. So post those transactions and the proceeds that we've received from some of the disposals, we will pay down some of our rand-denominated debt as well as clear out all of our euro debt, which will leave us with ZAR 10.1 billion worth of debt. And we've also negotiated as part of those refinances extensions to those facilities. And we've tranched that out between 3 and I think 5 years on both transactions, which will give us, from a group perspective, a weighted average loan term of 3.4 years. And in the next half, when we get there, I'll show you how that has been tranched out to give us a kind of smoother refinance profile. The hedge percentage moves up slightly, not because we've added more hedges, but just because the debt will come down and the hedges will remain static, so that percentage will increase. And likewise, the average term of the hedges will remain around the 3.1x -- 3.1 years' level. On the bottom of the slide, we've disclosed the group covenants like we've done in previous results. In the extreme right, that's what we disclosed at December 2020 as actuals. So the bank gearing ratio reflected a 50.4% measurement against the middle column, which was a 60% covenant. We had no group interest cover ratio, so that was not applicable. And then the minimum NAV measured ZAR 11.1 billion against a covenant of ZAR 10 billion. Obviously, you'll recall, we received a number of questions around that, certainly curiosity around, if you had to breach that maximum or rather minimum NAV, what kind of process would we need to follow with the banks? And I think there was a kind of general kind of, I won't say, anxiety, but definitely uncertainty around what that meant for us. And if you think about the covenant of 10, that was -- a specific banker had set that covenant at 10, with the majority of the banks having a covenant of 7. What the team have done with the refinance is that they negotiated that covenant down from 10 to 7, which means now all the banks are aligned at 7. And clearly, the difference between 11.1% and 7% is a substantially higher headroom. I think that will give everyone a lot more comfort that we're not at risk of breaching that particular financial covenant. Then on the left-hand side, a snapshot -- sorry Brenda, on the left-hand side, a snapshot of our liquidity. Total liquidity of about ZAR 1.7 billion, comprising ZAR 1.34 billion of cash and cash equivalent balances, and then ZAR 358 million in available committed facilities. Like I said giving us a total of ZAR 1.7 billion. As we apply some of those proceeds or cash balances rather to pay down some of the debt that will reduce, but still, I think, a very healthy cash balance in the context of the current environment. Brenda, if you can go to my last slide. This is the debt maturity profile. And you'll recall, in December, we had a substantial amount of debt that was coming up for refinance in the next 12 months. It was part of our focus in terms of the refinances to refinance the debt, but also to term out the debt to give us a better maturity profile. So if you look at this particular slide, the gray columns, what was previously reported. You can see within 12 months, a substantial amount of about ZAR 4.3 billion that was falling due in the first 12 months, followed by ZAR 3.4 billion coming up in the following 12 months. So within 24 months, about call it ZAR 8 billion worth of debt. If you look at the red graph that's what the repayment profile or maturity profile will look like once we've paid it down and finalized or rather implemented the 2 refinances. So within 12 months, about ZAR 172 million worth of maturing debt. And then in the following 12 months up to the 24 month marker, about ZAR 1.7 billion. So a significant amount of the debt being refinanced and pushed out. I think for the next 3 years, extremely manageable maturity of debt. We're certainly not concerned about any of those maturity dates. I think that's it from my side. I saw a couple of questions, but Brenda, if you go into the next slide, I think we are going into Q&A. So perhaps you can have a look at the questions that has -- have come through.

Okay. So I think the first question is from Nazeem. ICR's pro forma only looks at lost income from assets and reduced debt costs, but this doesn't include MAS dividend, which may come through later and includes all the rent -- sorry, includes all the rent relief, correct? So Nazeem, I think that's right, in that what we've taken is the 6-month performance between July and December last year and all we've updated for is the impact of those proceeds have they been in effect from 1 July, i.e., we've stripped out any income that we've received in those 6 months from those assets and then applied the proceeds amount to debt at the beginning of the period, meaning that we've saved interest on those facilities being a combination of euro and rand-denominated facilities for the 6 months. That gave us our interest cover ratio. And then from a gearing perspective, we've used the December values adjusted for the loss of assets through the disposal process and then compared that to the adjusted interest-bearing debt amount after the pro forma adjustment reducing that debt. Nazeem, hopefully, that answers your question. Indicative pricing of new debt on 2 facilities. So the 2 facilities that I referred to was Mall of Africa and the ARF/LBOP facility. The ARF/LBOP facility comprises of a number of loans across various tenants from, I think, about 5 to 6 different lenders. So difficult to go through the detail of each of them. But what we have seen is that from the previous refinance on ARF/LBOP to the current refinance, we have seen an increase in pricing. I want to say somewhere between, depending on which tranche you look at, somewhere between sort of 15 to sort of 30 basis points, if not 40 basis points in terms of an increase in pricing. And I think reflective of where bank's cost of capital has gone up, and obviously, the increased risk in the current credit environment. That's what we've seen in ARF/LBOP. In Mall of Africa, we've actually seen a little bit of, call it, savings coming through in terms of the facility margin. So during the course of last year, during the COVID pandemic, we did a short-term rollover, getting us about sort of 18 months additional time to refinance this facility. Based on that pricing versus the pricing that we've received now, I think we're, call it, plus or minus 10 basis points [ keener ] in terms of the margin, but obviously, the terms are a lot longer. So we've refinanced our term between 3 and 5 years. So on a like-for-like basis, the margin has improved substantially more than just 10 basis points. I'm going to go into the third question. It seems like another question for me. Hi, team, what is your threshold for LTV and NAV, and potentially ICR, for you to comfortably declare a dividend for FY '21? If you can comment, perhaps, guide us on where you expect LTV and NAV to settle for FY '21? Yes. So look, I don't necessarily want to forecast where our loan-to-value will come out at. We're currently going through a process, finalizing our property valuations. And we're certainly seeing that, in some instances, year-on-year, some of those valuations improving, i.e., some positive revaluations compared to last year, but it's still a mixed basket. So difficult to say where the LTV will end up. It will be a combination of the key drivers around valuations, which is largely the completed portfolio, the leasehold rights, we've got some derivatives around our interest rate swaps, which also can swing quite a bit period-on-period. And then it's the impact of MAS, which is effectively mark-to-market at year-end, and it will depend on what the spot price of the MAS share price is that will impact the loan to -- the value of the loan-to-value calculation. And from a debt perspective, I think we've given you a very keen indication of where we'll end up in terms of debt values post the refinance. From a NAV perspective, that's really going to be, again, a function of the valuations and where they come out yet. But I think suffice to say that we're not concerned about LTVs, NAVs or ICR covenants. I think we're very comfortable that we will be well within that. From a dividend perspective, that will be a Board decision, and the Board hasn't made a decision as yet. Some of the key factors that we'll take into account in determining whether a dividend is appropriate or not is where we are in the COVID cycle. Is the risk out of the system already? Or is there still some risk to come? And certainly, looking at balance sheet strength and liquidity. And I think that those 3 factors will be taken into account by the Board in determining whether a dividend is appropriate or not. Next question?

Going to be the rent reversion.

Is there rent reversion? I think there's another question before we get there, Jackie. I think there was -- what could you have to concede in order to give the NAV covenant relax to ZAR 7 billion, perhaps higher margins? No. So we definitely didn't negotiate on margins. I think the margins were reflective of where the pricing model came out yet. We have looked at the entire basket of, call it, covenant regime within that bank's facilities. And what we have agreed to is a slightly higher interest cover ratio at a portfolio level within that security portfolio for that particular bank. But we're also very comfortable that those interest cover ratios -- I think it's set at 1.15x as opposed to 1.10x. We're comfortable that those are well achievable, and we've got sufficient headroom to achieve those ICR covenants. Jackie, Mike, I see there's a question from Annaye with regards to rent reversions, so maybe hand over to you guys.

Yes, definitely. Mike, you can give some kind of on the retail rent reversions and also on the office rent reversions. So there's 2 components within the office is the -- one side is the rent reversion. We see certain bigger corporate tenants, bigger reversions. But I think on the smaller tenants, not so big impactful. But on the smaller guys, you're definitely seeing reduction in the space. So we keep in the rental level, but this price reduction and the corporates that do not want to reduce the size, we're definitely seeing some pressure on the office rentals. And then Mike, maybe you can give us some color on the rentals you guys have been busy with Mall of Africa as well as the Garden Route.

Yes. Thanks, Jackie. So I think maybe just in summary, if you look at the categories of properties you own, if you were in logistics hubs, you were kind of okay over the last few months. If you're in retail, it was really tough April, May, June last year. But to a large degree, a lot of the information was surfaced and evident, and you could handle it, you could address it, and move on. And I think there's a lot more certainty on the retail sector. And as you've mentioned, I think the office space is -- that's where a lot of the uncertainty sits today, whether that is corporates considering work-from-home, spacing requirements, affordability. There's a lot that are -- that they have to consider. But to a degree I think our asset base has shown some resilience. Do we have those requests and conversations? Yes, certainly. But the asset-based profile allows us to have those discussions on an individual basis with each of the tenants as and when it comes up.

Thanks, Mike. The next question that we provided that -- at our interims ZAR 64 million in relief at interims, full year ZAR 74 million. Have you only given additional ZAR 10 million in relief or was more considered, but you have managed for deferrals. So the ZAR 64 million was an interest. The further ZAR 10 million was definitely the impact in January, and in February, [indiscernible] had to provide assistance to especially the restaurant tenants. That is not deferral. So that's purely a complete discount to the rental. And then on the deferrals, yes, we are recouping the deferrals on a repayment plan that we have agreed with each and everyone of the tenant. You will also notice that the deferral amount is much larger on the non-retail tenants. It's more our corporate tenants that seek for assistance when we've introduced prepayment plans, which they are all sticking to. And the discounts where it was a complete discount in rentals is more weighted in your retail tenant. So -- it was a further ZAR 10 million of discounts, and it was largely due to the January, February impact of the lockdown restrictions. What would -- the next question with property values follow the trend of footfall levels or the trend of retail sales, outlook on property values. Mike, maybe you can maybe give a -- your views on footfall versus retail sales and the outlook on valuations to those trends.

So valuations really are underpinned by rental flows. And if you look at the retail assets only, those rental flows are underpinned by turnover numbers. So as long as it's affordable for our clients to generate that level of turnover at a certain level of rental, they will continue to be able to pay that rental. I mean that flows back to the valuation. So certainly for us, it's much more important to track turnovers than it is to track footfall, but we're not ignorant about the trend that we are seeing. I mean the trend is evident, it's clear. And so we have to also be responsible with whatever we do in that response. I think, once again, getting back to shopping, that is the first step for us in augmenting this physical footfall with potentially a digital attraction still with the same aim of attracting turnover to our retail assets.

And then the outlook on property values, Mike, on retail?

Yes, I'm going to -- I mean, I'm going to sidestep it a little bit. I think, Raj, he did a good job to say the LTV is still dependent on the valuations. The valuations are still outstanding for this year, but I can -- or for this period, but we've had insights into a couple of our valuations. And I must admit that a lot of it also depends on what happened in June last year and what happened in December of this -- of last year. So in certain cases, specifically on retail, it might have been overly conservative or maybe not a conservative enough for you. I can give you 1 statistic for the month of May. The Garden Route Mall is fully let, and it did a turnover that's 16% higher than the turnover it generated in 2019. Now you can imagine that's a piece of information that's new that the valuer maybe didn't have in June of last year. So it's really difficult to say that valuations in general will behave in a certain manner. I think at this stage valuations on a per property level are going to follow different kind of outcomes. And we'll probably finalize that in the next week or 2.

Raj, next 1 is for you from Soren. What is the difference between...

What is the difference between the bank's gearing ratio showed, 50%, and the LTV mentioned? Is the bank's gearing ratio totals or look through LTV? So the bank, I'll call it the bank ratio is based on the definition, and the definition typically starts out with total assets. It then reduces total assets with intangible assets. So concepts like goodwill, intangible assets, deferred tax assets, et cetera. And then we also make an adjustment for unrestricted cash, being cash that sits with us, but belongs to our tenants. And then we also then remove cash altogether. So the cash that is attributable to Attacq we remove that, and we get then the benefit of that in the numerator, which is total interest-bearing debt less all unrestricted cash. So that's typically the bank ratio. And like I said, it's a definition. The slight anomaly is between bank to bank in terms of what they include and exclude. But, Soren, certainly not a look through LTV where -- and I think what you're looking at is potentially an LTV that proportionally consolidates, get onto the balance sheet of a deck as it relates to an associate or an investment. It is taking the audited set of accounts, which follows a consolidation principle and then makes the changes with regards to the definition on those particular assets that -- asset line items that I've spoken about.

Giles?

Yes, thanks for that. I think you referred to both The Mix and Ellipse, which generated potential profits. Raj, I actually pass on over to you, if I could, because I think it offsets an impact -- the question is around -- assuming around tax and our REIT distribution threshold, aren't they?

Thanks, Giles, and Annaye. Yes, so Annaye, I think the way we look at residential developments because it's developed to sell those sectional title type developments. We typically target the GP profit margin that makes sense. I think on Ellipse, we're tracking somewhere between 25% and 28%. I don't know if Giles is comfortable with that. And I think on The Mix, the percentage that we're looking at is slightly higher than that. It's closer to around the 30% mark. And that's -- and the way you've looked at sectional title development, it certainly isn't conducive for a real estate investment trust to do these sort of developments in any large scale given that they're not rental income in nature, and that's a rental income tested. As a REIT, we need to meet on an annual basis being 75% of our total income. So we've put both these developments in a special purpose vehicle, kind of ring-fencing it from our rental income business. So the GP percentages that I've quoted out before any kind of tax implications that will attract corporate tax at the full 28% and that will have a flow through into the rest of the group. And then we need to make sure in terms of that flow-through, as we aggregate it with all the rental income and other expenses, et cetera, we get to a stage where we can tick the box on the rental income test. And then any distributable profits that we've aggregated together, we need to then distribute at least 75% of that within the year. So now hopefully that talks to kind of the profit margins and how we will treat it from a REIT perspective.

Thanks, Raj. Mike, Mall of Africa, can you give us more color on the process being made on the renewal side of the Mall of Africa? What sort of reversions are we seeing and also maybe kind of the vacancies coming out of the process? And how confident are we to fill the spot? So maybe just an overall update on the Mall of Africa renewal cycle.

So I'll provide more context that will add the color to the response. So we must all keep in mind that we had 182 leases that expired on 30 April of this year. So there's quite a significant amount of leases in probably not a great period for the economy. What we did from a planning perspective as we bulked up the team prior to the cycle, most of the tenants were also allocated to people in the team, depending on whether it was a big national or an international tenant or a local tenant, and that's kind of how we approached it. You would have seen in the earlier slide that we disclosed that the occupancy level was down for May compared to June. I did make mention of Mall of Africa's renewal cycle, creating some of that. So what's important to understand is, for us, it was not just about the quantum of the income in the lease. It is also about the quality of the income. And where we felt that sometimes some of these existing expiries of tenants were not going to be sustainable in future, we made a difficult decision, and we did not renew. So from a renewal point of view, we peaked now in May with vacancy of just over 40 boxes. Of those, we've already got lease agreements signed on 14 boxes with a very exciting mix of local and international tenants. Unfortunately, I can't steal all the thunder here by naming and disclosing them, but most of them are in shopfitting mode now. They will take via July through September, and most of those lease agreements that have been signed on those vacancies should all be opened by the end of September or October of this year. And those are only the ones that we've signed up to today. So is that metric going to suffer a little bit in the short term? Yes, it certainly is. But I also believe that physical retail is not dead. If we could complete 14 quality leases in this period, I think Mall of Africa is going to be a good product come sort of November this year. So on the reversions, I think we're going to do proper disclosure when we're doing our annual results here. It's really difficult to say. In some instances, where there was a lot of uncertainty, we elected to do a renewal for 12 months only, but these are in very few cases. And where there was enough certainty we could conclude a lease for 3 to 5 years with some of these tenants. Most of our nationals are renewed on a 5-year basis. So once again, when you refer to the reversion, I think we'll have to strip out what we probably deem to be short-term support versus a longer-term renewal and give you both numbers in future.

Thanks, Michael. Then the next question is from Annaye. Annaye, I prefer to ask are you asking this specific yield investment properties have been disclosed at the balance sheet or this disposed in the balance sheet? Okay, we will answer the question as it is. So dispose -- disclose, so [indiscernible] investment varies depending on the asset class. So our average yield, Raj, please help me, is round about, I would say, 8.5% to 9% is our range of cap rates and deals that we work on our tenants.

[indiscernible] So we look at it on the capex basis [indiscernible] confirmation for yield in our December PowerPoint we gave a range across asset class, I think, it was on Slide 6. So from 7.28% for retail up to 8% for asset classes. So yes, it depends on the asset class and exact asset that we're looking at.

Yes. I think on the balance of risk, how significant is downside risk to your property valuation given the future capital uncertainty. We have been looking at our valuations, and the valuation drive is that really being the driving force on that valuations over the last few months or last few years. We -- the values have been particularly a lot of focus on the rent reversion so the market-related rentals of [indiscernible] will renew at as well as the vacancy period for those particular tenants when they will not renew the tenant. So I would say in the 5 and 10 new DCs the values have already put significant, I would say, cash flow fine, especially on tenants where there is uncertainty with the top tenants that has not been trading well. And then they have also discounted the rental levels within those particular valuations. But you can only provide this much. I think our cash flow uncertainties have definitely improved over the last year. As we've seen in last year, we had almost ZAR 160 million worth of discount in deferrals. And this year, we are sitting at ZAR 75 million. So I think we have definitely improved, and a lot of that uncertainty has been taken out, but the value is to build and certain level of uncertainty as well into the discounted cash front. And then we have got, what gross rate has been achieved on new office leases? And how this is going to be to what was achieved for our COVID had valuations taken these new ratings to a cut? So let me answer the first question. So our average office reversion rent in our safer valuations was ZAR 201 square meter that the value is applied. The SC Johnson gross lease was about ZAR 200. So I would say to be spot on with what our value is in our market rentals, how does it compare prior to now, I'm going to go in quite net rentals. So currently, we're achieving between ZAR 135, ZAR 138 to ZAR 155. Prior to COVID, I would have said we're achieving -- we've achieved ZAR 145 to ZAR 160. So there was about ZAR 10 per square meter discount on new leases that we have seen, especially in The Waterfall note. Then we've got -- will Attacq take advantage of the lifting of the electricity producing threshold from 1 megawatt to 100 megawatts? We are most definitely looking into those opportunities and seeing how can we bring more renewable energy into our portfolio. So yes, we are looking into that. And then views on the impact of [indiscernible] rights? As a result of the -- I think it's the general trade valuation roll of 2020. Michael, you can comment on that. But I think our values from our properties are pretty much in line with our book value. So we don't foresee material big impact, but I think you can give more closer to that detail.

That's correct. We've also had a meeting with our professionals on this, the professionals that assist us with all our rate queries and municipal valuations. Out of that engagement, also not too much of a concern, and we are in the process of following whatever is required for the -- for next year's general valuation roll. But thus far, nothing has been highlighted to us as a serious risk.

Thanks, Mike. And then you've got a question from Soren. Mike, this one -- next one is for you, of the 40 boxes referred at the Mall of Africa, what is the vacancy like currently?

Soren wants to quote the numbers. So once again, May is as bad as going to be. If I give you a number, it's on gross lettable area. So that's the GLA. So it's sitting at, I think, just above 7.7%. You must once again consider that taking into consideration the 14 leases that we've already signed, that I spoke about earlier, that number is going to drop to below 3% because a lot of the big boxes are taken care of in those leases. So what we're left with and potentially where some of the work is going to sit up until December is more the boxes that are below about 80, maybe 100 square meters. So from a number of boxes point of view, it might sound a lot, but from a GLA perspective, then all of a sudden the vacancy rate is going to shrink a lot.

Thanks [indiscernible] we've answered your question, as we disclosed. And in another question, [indiscernible] you received in 5 years' time, how much of the debt will be disclosed to the Waterfall mode? And that's a very good question. Currently, if we look at our property portfolio, it's just under ZAR 20 billion way offsetting Waterfall and other [indiscernible]. It all depends on the development momentum, as we acquired more as management and as a Board, I need to focus now on tenant-led developments and not institute-led developments. So in the last few months, we've, as I've said in the opening slide, we have gained a lot of traction in tenant-led developments, especially on the industrial side. We've had a few very good, also, office leases that we have signed. But that -- it's really focused on tenant-led developments. It's very difficult to give a complete number. But if you take into account, we have got another million square meters of development in Waterfall, and we have only built out just under 600,000 square meters. So -- and that's ZAR 10 billion. So if we further develop the million square meters, it's over ZAR 20 billion worth of development work that still sits within multiple. Will that happen over the next 5 years? I don't think so. That's -- it's a much longer view as the economy and the tenant demand is definitely going to play a big role. So I think if we can finalize the eastern side of the city, and furthermore, the Sanlam and logistics hub, we have done really well over the last 5 years -- over the next 5 years. Okay. What is the biggest risk facing the company over the next 6 to 12 months? We definitely -- I would say the uncertainty of the impact of the economy and the long-term impact that we will face as a country of what COVID has brought to our country and our economy, the -- how quick can we accelerate business growth in the country. For us, that's going to be a big impact of how quick we can roll our Waterfall. And then I would say from a risk mitigant point of view, if we look directly into Attacq, I think our biggest focus had been our liquidity and our [indiscernible] renewal program, which has been successful. And now it's really focusing on applying the capital sensibly. And focusing on the transactions that make sense from a capital allocation point of view. So I think for the medium term, we have derisked the company from a liquidity point of view rationalizing our office renewals being Transnet, that have notified us that they will not renew and really finding a tenant for Transnet. We're busy with Cell C on the subletting. So it's really focusing on the operations of the company and ensuring that we find replacement tenants and we give the tenants with their renewal. So very much operational focused risk. Any more questions from anyone.

Maybe just 1 from myself. What's the thinking behind holding the 6.5% in MAS? I see in the SENS announcement, said that no intention to sell any in the foreseeable future. Maybe just give us some thoughts there?

Well, I think, MAS is also undergoing massive change. They've done really well beyond most investors expectations from -- in terms of exiting the Western European portfolio. We've been -- if I can put it, I will be reluctant to say this, in that, just given where COVID went and what the uncertainty was a year ago and that the massive drop in the MAS share price in the last calendar year, we took the opportunity to derisk our balance sheet position. There were lots of debates. And as you can see, we've sold out in a phased approach. But with this last disposal, we've essentially derisked our entire euro funding position because there will be no more euro debt on our balance sheet. And the balance of our MAS shares are totally unsecured. So we see -- just given MAS management's good performance to date and the strategy going forward, the economy in which they operate in, we see there is a lot of upside. We feel we've unfortunately had to need some value on the table, but it was balanced against doing the right thing to derisk our balance sheet position. And we'd like to get compensated for the period that we've held the stock and in doing so hopefully pick up some distributions if and when they return to paying distribution. So I think in the long-term, it is currency for us, but the long term is long. And in the medium term, we'd like to see how management performs and how the share price performs and what the -- and see that the share reaches its true distribution potential. And the sooner the better for ourselves. So, we've done the hard yards on it.

So I'm I right in saying that you're happy with the euro debt levels, and it's -- really it is now back to the investments of all the data?

The euro debt levels are being [indiscernible] because it was not mentioned on balance sheet, and as I think across the [indiscernible], but one of the very common questions we will get was I think you have an expectation that we would be -- you see us in the market trading a few thousand shares a day, but that's certainly not the case. So we really like the balance of our position, and we look forward to [indiscernible] of the period that we hold it.

Great. Thank you. I see there a few more questions there, Jackie.

Yes. So that 1 million development partner will increase your asset base to 1 million -- billion. Given that over time and depending on what we build, which offices, is it residential, more logistics. So that's a rough guide. And then also over a period that is -- that we have build up. But as [indiscernible] periods definitely change. So that is a rough estimate that there is ZAR 20 billion. Next question, which malls [indiscernible]? I would say we invested in really good malls, and we've also seen how well all of our malls have performed. I would say -- we say that Brooklyn Mall is [indiscernible], but I think it's only for the reason that we only own 20 -- a minority stake in the mall. I think the Growthpoint management team is an excellent team. It's great being partners with them. But we've always been desirous to dispose off that share because of not owning and controlling the precinct, and that's the purpose of our company. The second question, would you look to bail out anyone like Accelerate with its problems at Fourways Mall. I don't think that's our focus at this stage. I think our focus is Waterfall. Before we bailout Fourways, we would rather spend our money involving beautiful logistic stocks or investing more money into sustainable income. [indiscernible] meant that vacancies at Mall of Africa speak, I would gather that 7.7% vacancy is the highest since it's opened in 2016. I don't think it's just COVID, but Mike, you can maybe comment on the detail of that question.

Yes. I'll just clarify. Maybe before I do that, Jackie, I think we've said for a number of years, it's all about the quality of assets that we own. And certainly, if you buy an asset that's distressed about someone out then you could assume it's not a quality asset. So it's not going to fit our asset profile. I think once again, Soren, we must just be careful with some of these numbers. The number quoted is the number for the end of May. End of May, it would have peaked because our expiry profile was all for April this year. So it's -- I think -- has COVID had an impact? Certainly it has. But I think it's also a consequence of a renewal cycle. And certainly, whenever a company has to report depending on whether the renewal cycle is somewhere, they're going to report on the 5-year renewal cycle, and there's going to be some fallout because you simply aren't going to renew 100% of the leases that expire. So we must just be careful on how we handle it. I think it's a combination, but certainly it's not just because of COVID that we've got vacancies. We had to make some decisions on the sustainability of some of the guys that expired. We opted to not renew some that we thought were not going to continue, and we would rather relet that to tenants that are sustainable in the current environment. So that's where that vacancy number comes from. But certainly, as I've quoted before, it's going to drop significantly by 1 September once the doors are open [indiscernible] is going to be significantly less. So it's more a question of the timing of this disclosure than it is about, I think, the health of the mall, the impact of COVID.

And then we -- We buy malls far away from Waterfall like Rosebank. Once again, we need to -- as I've said before, we need to look at our capital allocation, what makes the sense from a capital allocation point of view. And I don't want to say we won't, but I don't think we are in the market in buying malls in Rosebank at this stage. And can you sell more MAS or will listing requirements require shareholders' approval?

At the moment, if we look at the JSE-listed requirements, there is a capitalization rule, which you'll set how the -- a single transaction or a subject met to the transaction. If we had to sell more MAS shares now, it's a function of our market cap. I think category 1 is where shareholder acquires [indiscernible] required and that's at 30% of your market cap. I haven't done the numbers recently. But if we had to transfer a substantial number of MAS shares, we would fall far low of that JSE-listed requirement. As we can see 50% of our market cap, if we aggregate all of the MAS transactions in the last 12 months. So we would need to go to shareholders to transfer more MAS shares, yes, at the moment.

After saying that, we are not going to share.

Will you do a rights' issue at 1 stage. Next question, I think that is -- of the levers where we definitely always keep on considering that we as management and as a Board, can opt for -- but I don't think at this stage it's optimal to do -- for us to do a rights issue at this stage. But it's definitely voiced in the consideration as a management team as one of our leaders took over.

I think that -- just to add to that, just given where share prices are and the availability of capital in the market, I think it's incumbent for many teams to try and if you need capital and recycle capital to dispose some assets, and that's essentially been our approach to date as has been to disclose of assets and all. Based on the assets we've disclosed, we feel comfortable that we disposed at full year to book value despite the tough market conditions. So that would be our third risk once we issue capital and it's issued and it's out there forever. And at the moment, just given where shares prices are related to MAS it's much -- setting up the first quarter call for most property companies.

Maybe just 1 last 1 from me. I don't see any more coming through on the chat from myself. So maybe for Raj, that point you made, Giles, regarding the recycling of capital. It looks like you've done an excellent job in getting your facilities extended. We've had a number of interactions with banks in the last couple of weeks and the appetite for commercial real estate differs quite vastly now compared to where it was perhaps a year or 2 ago. Can you give us a sense of just where the banks are thinking? Are you changing your lending mix? Is there a propensity for more appetite from some banks than others?

Yes. I think it's a good question. I mean having been with the banks for a couple of years, their strategies do change and cycles come and go. They end up being overweight in certain sectors or industries versus other industries. It sounded that we stay quite close to with regards to all the banking relationships that we've got. And we'd like to understand where the bank's thinking is at with regards to real estate specifically and appetite for our own paper. We haven't seen any material, call it, concerns from any of the major relationships that we've got. And I'd like to say that's typically your sort of big 3 banks plus some of the other institutions that we've got deep relationships with. Certainly -- last year, there was a lot of uncertainty around COVID, what was that impact going to be both in rentals and on valuations. I think a lot of that uncertainty has kind of dissipated since then. They are kind of -- even though valuations still are uncertain, we're certainly not contemplating 20% devaluations on retail portfolios where sometimes -- last year you would have someone commenting something like that, and then the market will get a little bit jittery around that. So I think there is a lot more certainty around real estate and what's happening within the sector. And I think in my own personal conversations with some of the bankers, they've weathered to their mind an extremely difficult period over the last sort of 12, 18 months. And they believe their books are in very good nick when it comes to real estate. And perhaps it's the segment that we are part of, which is the kind of listed sector or the corporate and investment banking sector. And they haven't written off a lot of bad debts with regards to the segment of the market. I think some of the provisions that they did provide for last year, they're kind of unwinding now. So kind of the macro answer is, certainly, we haven't had any kind of indications that real estate in our segment is a challenge. And then more specific to home around the tech none of the banks have ever come to us and said, look, we want to reduce our exposure to you because you're in the real estate sector or specific challenges around a tax. So fortunately, I think there's still positivity around our relationships in real estate in general.

Thanks, Raj. Jackie, I see there's a question there from Shane. You want me to read it? Can you give an update on the current book value per share, please?

Shane, we can't give you an update just yet. Obviously, we haven't updated all of the numbers as yet. The big outstanding is the valuations, et cetera. But -- that will be something that we'll obviously disclose in our full year results presentation. So at this point in time, not at liberty to disclose an updated book value per share.

I think we -- any last questions from anyone? There we are. Rachel has 1 from Truffle. You mentioned some potential uptick in some valuations on the retail side. Could you provide any color on valuations for office.

It is difficult to say. I think it's going to be pretty flat. And we will just need to see the various views on our CapEx. But I think if everything stays equal, I think we [indiscernible] that we can achieve our group value prices. So once again, that's where the values also seem to look for guidance. I think the leases that we have signed over the last 12 in our office portfolio certainly substantiates the rental values of what the values have contributed towards. So we don't see upside. And maybe 1 or 2 potential downsides, we need to see how the values will treat the transit building with the vacancy there. So we will definitely see some downside. And then for the rest, I think it will be very much a flat set of valuations, but let see.

Thanks, Jackie. I think we've exhausted all the questions. Jackie, can I hand it back to yourself to make some concluding remarks.

Yes. Once again, thank you for everyone's time today and for dialing in and supporting it. Again, thank you to my fellow executive team and to all the staff that's signing in. I think when we set out this plan a year ago, it was quite tough, and we're quite proud of where we have taken it to where we are today. Especially with the debt refinancing program and the disposal program, we will continue to focus on the basics and the fundamentals. And yes, we also are welcoming -- if you know the third wave is quite done and people have got their vaccines, we are most welcome to invite you to come and see what else the team are building. The city is looking phenomenal with Ellipse and another launch of The Mix. So we guys -- despite the pandemic, we have done some excellent work from a development point of view. So we encourage you once come and visit us, kind of see what we're doing. And yes, thank you for the support over the last 12 months.

Super. Thanks, Jackie. I think the detail was exceptional for a preclose. So thank you very much for that in the way that everyone answered the questions. I think that concludes this afternoon's call. So thanks, everyone, for your participation and look forward to seeing the results in a few weeks' time. All the best. Thank you.

Thank you.

Thank you.

Bye. Take care.

Bye.