Equites Property Fund Limited (EQU) Earnings Call Transcript & Summary

Welcome, everybody, to Equites Property Fund financial year-end results for the year ending February 2020. Yes, it's a different set of results presentation. Obviously, it would have been wonderful to have had you all here with us today, and we've really missed the chatter before the presentation and just interacting with everybody around what market sentiment is and conditions are. And obviously, not having you here today makes it slightly different. However, we're obviously extremely pleased with the results. Just before we go into them, I would just like to go through sort of the process of today. So I will be presenting a little bit of insight and where Equites is at strategically and what we're looking to do and where the opportunities lie for us. Riaan will come in and then give us a bit of an operational update and let us know how things have gone. And I'm sure you guys are very keen to know how our collections have gone and how our interaction has gone with the various sort of tenants in our portfolio, both in the U.K. and South Africa. And then after that, Laila will come in and she'll give the financial update with our normal sort of very thorough disclosures. And over and above that, we take it one step further this year and then Laila's got a whole section on ESG. So we'd like to share some of that insight with you guys this year in terms of what we're doing, what we've been sort of formulating and planning and why we think it's so important to the future of our business. Then the added sort of extra, which is unfortunate, we would have loved to have had the guys here. We -- when we saw them in February in the U.K., we were still very excited about the fact that our U.K. strategic partnership team at Newlands were going to be here with us today. And we obviously always enjoy their company and we're very excited about what we are doing together. However, very efficiently and very proficiently, the team have put together a presentation for us today, which we will take you through. And then after all of that, we will have a -- just a closing comment from me in terms of what we see for the rest of the year. And then we'll have a Q&A. So the Q&A will be on the basis of you guys sending in e-mails. The e-mail address is on the web page. The questions will come through, and we will try as best as possible to answer as many as possible in the time constraints that we do have. So where are we? We are presenting our numbers. So our numbers obviously are reflective of the year that has been, up to the end of Feb. We're very pleased that we have maintained the guidance that we gave at interims in October, and we are giving a distribution growth of 9.4%. Very pleasingly in this environment, we've taken a very, very strong view on valuations, and Laila will talk to that later in the presentation. But notwithstanding that, we've had a 3.7% growth in NAV. Obviously, very importantly for us, which is something that sort of we've done sort of on an ongoing basis, we've kept our loan-to-value very low. And the capital raise we did in February has obviously assisted us in that provision. And the consequence of that is that our balance sheet is in a position now to execute on the deal flow that we currently have in the pipeline. We'll talk to that in a bit more detail, but also the potential opportunities that may come about from here on in. What's obviously very pleasing is that -- since we listed -- I remember when we listed the first year, we were really proud of our portfolio. And I stand to be corrected, but I think we had a weighted average lease expiry profile of about 6 years, and we thought we were a big cheese. And the reality of it is that we managed to take that to 10.2 years. So that is a fundamental sort of cornerstone of our business is having this long-dated income from quality covenants and creating relationship with these guys where we get repeat business from them over time. And then since we listed with ZAR 1 billion portfolio, we've grown this company to a ZAR 15 billion portfolio business. We're obviously very pleased of that. The quality of the portfolio has only got better with time and the essence of what we're doing and how we're doing it means that we believe that going forward that the quality of this portfolio will only get better and better. In terms of our strategy, I mean, we -- to the point of sounding repetitive, boring, whatever else you'd like to define it, Equites' strategy basically still remains to be becoming a globally relevant specialist REIT specializing in the logistics sector. We have a single-minded focus on building our portfolio in line with our strict investment criteria. And how will we do that? I mean we've got a South African business and we've got a U.K. business. Our South African business obviously, has been the cornerstone and been the anchor of our business. And we've set our sights on developing best-in-class logistics parts. And we're doing some really exciting stuff also in terms of the ecological impact that our businesses -- our buildings have. We're looking at every aspect of that and looking to be best-in-class in that and improving it. Because there is merit to that, and we'll talk to that during the presentation. Not only that, obviously, we also are looking to do pre-let developments in non-parks because we do have certain land holdings in areas where we don't control parks. We continue and have always been looking for opportunities to buy assets in terms of -- that meet our strict investment criteria. So we're talking best-in-class. But obviously, there's got to be a pricing metric at which it makes it reasonable for us to bring on to balance sheet. And then the last element is the sale and leaseback scenario. I mean the Shoprite transaction is a classic case in point in that. We'll talk to that in a bit more detail a bit further on. But obviously, that kind of deal is something that is very attractive to Equites and to its shareholders, we believe. In the U.K., we've entered the strategic alignment and partnership with the Newlands team. And we'll finally unlock in terms of what that deal is today, and we will give you some insight in terms of what the metrics are around that. But obviously, that team has got such deep insight into the U.K. market. Their ability to unlock greenfield land into becoming development land is almost unrivaled in the U.K., and we place so much value on this partnership and we foresee in the next sort of 5 years a big rollout in the U.K. on the back of what the Newlands guys are going to be able to bring to par. Most of -- I mean, all of this in the U.K., basically, the essence of that business is that everything will be done on a pre-let basis. But and -- again, we'll talk to that in a bit more detail later on. And then by having this partnership with Newlands, we -- it doesn't preclude us from still doing transactions in the open market. So if a meaningful or sensible transaction which meets our investment criteria is available to us in the open market, we obviously have the benefit of consulting our Newlands partners in it in terms of their opinion on it, so their insight on it and their IP on all these things is very valuable, but we don't preclude ourselves from doing those deals. Operating in the context of our economic realities. I mean I don't want to spend too much time on this. I'm sure you guys have got your own opinions in terms of how the markets will fall off as a consequence of what's happened with COVID and how they'll bounce back. I mean the one thing I will say in the U.K., though, we are of -- as a management team, we are of the opinion that there will be a strong V-shape bounce back in the U.K. economy. And the consequence of that is going to be very positive for our relationship and our ability to unlock with Newlands going forward. In terms of SA, I think there's a lot more unknown in SA. Obviously, the government has implemented a lockdown, which has seen a lot of businesses closed. Unlike the U.K., where online was allowed to basically go mainstream in South Africa, that hasn't been the case. So how businesses reopen, how quickly they go back to pre-COVID spending trends, how quickly does the consumer recover from loss of income for this period, there's a lot of questions there where the government is doing the best they can within the constraints that they do have and how that unfolds. We obviously remain optimistic, South Africa, but we -- it's very difficult for us to judge how that will come back. And will South Africa have a stronger V-shaped return? Probably not as strong as the U.K. one, but we welcome, obviously, that it does come back strongly and that the government puts in place provisions that allows businesses to get back as quickly as possible. In terms of emerging trends, and this is actually quite interesting. I mean you'd think would a disease like this actually have an impact on logistics property? And the reality of it is that we're seeing the commentary coming from all over the world, from companies that operate in the same space that we do and a very -- there's quite a bit of consensus on this. And the first one, obviously, is we foresee world post COVID having what has been now sort of termed as a lot of onshoring of manufacturing. So the offshoring of manufacturing to the cheapest possible point in the world with a view to then shipping it in and maybe assembling locally or whatever, I think these elements of business activity will be relooked at. And we foresee a lot of governments taking decisions that they believe that there are certain industries that -- a certain portion of the manufacturing function needs to be onshore and needs to be retained and there needs to be a certain control over that. The consequence of onshoring, but the consequence also of some of the inventory depletions that we've seen, we saw -- we all saw pictures of supermarkets with nothing on the shelves and a concern that the inventory levels wouldn't be sufficient to sustain us through this pandemic. Obviously, the market responded well and the supermarkets have done a sterling job in terms of getting us back online and everything. However, we do foresee inventory levels increasing going forward. So this obsession with running inventory right down to the line and trying to save every last cent in terms of supply chain, we believe that there will be a change in that. And if I can just let you know, I mean, Prologis put out a document in the last couple of weeks which indicated that if the U.S. economy basically decided to increase their inventory levels by 5%, the consequence of that in terms of demand on logistics space in the U.S. would be about 40 million square meters. And that's an immense amount of property. So if you multiply that across most jurisdictions where inventory levels will potentially need to go up, the consequence of that for our industry, our sector is going to be really, really positive. The final element, obviously, is e-commerce. So as of March -- end of March, which is the last statistical sort of insight that we've got in terms of U.K. sales, e-commerce was 21.9% of U.K. sales, which is quite a significant amount. In terms of worldwide, the growth in 2019 of e-commerce was 16.7% worldwide. South Africa's growth is probably larger than that. But obviously, our base is much, much smaller. So what have we seen? I mean, some of the feedback that we're getting from our tenants and from our partners in the U.K., especially the parcel delivery hubs, they're running at like 130% of their designed capability. So the guys have never seen volumes like this. I mean 1 week in April, we've been led to believe that one of the facilities that we are aware of, that we've been looking at, basically ran at 180% of its pre-Christmas peak. So these are crazy numbers. These are big, big numbers. So this all bodes well for the e-commerce platforms only getting bigger and stronger. What you're seeing is you're seeing people that may not have used e-commerce before. But because of COVID and lockdown, all of a sudden have started using these platforms. The consequence of that is that, as they say, it takes 21 days to get a habit. So 21 days of e-commerce shopping means that these guys might become perennial e-shoppers. So that is fact. And it's something that is being taken into consideration by all planning teams as we speak. The impact of COVID. So I mean obviously, I won't -- the human calamity is something that I'll -- you guys all can work that one out for yourself, and I won't go to that. Be that as it may, obviously, with the shutdowns that have been put in place, the impact is there for all to see. And the reality is that there are going to be winners and losers out of these shutdowns. There are going to be people that will take more pain than others. And we would like to think that because of the nature of our business, the position in the sector that we're in, we are in a very good position to be able to benefit from the new world order and new world dispensation, economic dispensation that we're going to be going into. What I can say is that 80.4% of our tenants in South Africa remained operational. Not fully operational, some of them, but operational nonetheless. And in the U.K., 100% of our tenants remained operational. Again, not fully operational in some cases. Some of them are fully operational, but that remains there. In terms of sentiment, what we're seeing is -- both in the U.K. and South Africa, we're seeing that there is demand for some short-term letting. So as you can imagine, there's been a whole lot of inventory that had been ordered, which was on water, or had been ordered and had to come. That inventory is arriving in the various jurisdictions, and that inventory needs to be stored now because obviously, it was meant to go into stores, but the stock in stores haven't been sold because it's still there. And as a consequence of that, there is demand for some short-term space. So we're seeing that impact. What we will see as a consequence of that, though, is that companies will start now developing plans to take advantage of e-commerce growth, in the U.K. predominantly. But in South Africa, what we're going to see, I think, is we're going to see a lot of companies looking at consolidation at really looking at the scientific metrics around what their platform really needs to be. And we believe Equites is best positioned to partner with a lot of these potential clients in terms of creating product, which will be suitable for them for the next 10, 20 and 30 years. If I can, just to give you some context in the U.K., during the lockdown period, I can tell you of 3 deals that have been announced that are substantial. First one, Amazon in Nottingham with a developer called Panattoni, 550,000 square foot deal. DHL have done a 700,000 square foot deal, we believe, with SEGRO at East Midlands Gateway. And we also have been led to believe that Royal Mail has done a 700,000 square foot deal also at DIRFT with Prologis. So these are obviously quality developers in the U.K., but it just shows that even in this pandemic, there is deal flow. People are taking up space. We are seeing a reduction in vacancy levels in the U.K. However, we do think post pandemic, there may be a few casualties, especially on the high street retail, with some space coming back to market. Lastly, I mean, I'd like to just talk about where we are as a business. And we've separated this into 3 elements. The first element, which obviously is critical and is obviously the financial metrics of our business. The first thing is that we've been on a daily basis, in terms of managing our cash flow and our liquidity. It's been absolutely imperative that we've kept our balance sheet strong. Obviously, we weren't in the capital markets in 2008 and -- during the global financial crisis. But obviously, we have the benefit of conversing with experienced individuals in our sector and the consequence of some of the lessons learned in that period, we decided to take a very defensive measure. And as part of that, effectively, we decided to take ZAR 1 billion out of our facilities and put that stuff on some sort of short-term deposit. By that, we were not beholden to banks potentially entering liquidity crisis, and we don't think that they will, but we basically brought that destiny into our own hands. We control that ourselves, and that was very important for us. The consequence of us understanding the value of the cash that we sit on and the balance sheet that we have has also made us question deals that were in the pipeline, deals that are out there. And as you probably all saw the SENS last yesterday afternoon, we've decided not to do the PEP deal. And not because we don't think it's a great deal. We think it is a great deal. It's a great organization, and it's been a pleasure working with the guys. But the reality of it is that we just feel that under current circumstances, for us to deploy that quantum of money into a development, that will take 18 months to deliver in a region that is not our home region, with a third-party developer to assist PEP and us in the process. We just felt that the risk reward for Equites wasn't commensurate to our investment hurdle. And we approached PEP and we informed them of our decision. And obviously, they were very magnanimous in that they have accepted our decision. We would like to think that we can keep these channels open with them. And if things were to improve dramatically, that we can reengage. And who knows, maybe that deal can be reignited at some stage in the future. What I can tell you is also is the Shoprite deal that obviously was announced prior to lockdown. It's very much on the cards. We like to think that the Competition Commission, like all government agencies, opened yesterday. We're hoping to submit that documentation during the course of this week. But the difference in terms of this deal, obviously, the first one is the strategic partnership with Shoprite. We value that very, very highly as an organization. The fact that Shoprite have decided to partner us is also testimony, I think, to what we have done successfully in the last 6 years in this market. Over and above that, it is also a 20-year lease with guaranteed fixed uplift for that entire period. And we really see this portfolio as being the underpinning cornerstone of our South African portfolio. So we confirm that we are carrying on with this deal. And we'd like to think that the deal will close, hopefully, still in this first half of our financial year. But it may delay, depending on how quickly Competition Commission approvals are put in place. We -- over and above that, we continue to look at diversified sources of funding. And we came into the DMTN program a couple of years ago, and we've been very successful in raising money there at very good pricing. We currently have numerous banking relationships. And the detail of that, I mean, I'll leave to Laila, she'll talk to that a bit later in the presentation. But obviously, we're looking also over and above that. We've done some successful accelerated book builds in the 6 years that we've been around. But obviously, there is always the concern that the capital markets basically may not have the liquidity that they once had. And as a consequence of that, we need to look for alternative sources. And we have engaged interacting with other sources with a view of potentially selling portions of our buildings and creating joint ventures with various annuity-type institutional investors that would like to have direct property exposure. And we see positive opportunity coming from that sort of in the months and years ahead. We still remain committed to accelerated book builds. I mean you are shareholders that are currently our shareholders. But we do understand that the difficulties that the current marketplace currently has. And then finally, I mean, just we -- obviously, in that liquidity risk, I mean we have very low liquidity risk in terms of our debt. I mean, we only have about ZAR 100 million, which is due for renewal in September of this year. So in the context of our portfolio, I mean, that is really not big. In terms of the portfolio, I mean, we are 99.8% let. Obviously, the quality of the covenants is fantastic. And as for the rest of the detail in terms of the operations and where we are with the business, I mean, Riaan will be coming up just now, and he can take you through that in much more detail. From a social point of view, obviously, we, as Equites, have always seen ourselves as a really good corporate South African citizen. We always try and do what is the right thing to do. I mean prior to lockdown, we had already allowed a lot of our staff members, in fact, all our staff members, but some of them didn't take advantage of it. But a lot of our staff members started working from home. We provided them the facilities to do so in terms of laptops, in terms of dongles where they didn't have WiFi connectivity and so on and so forth. And I would really like to commend my staff, my team. They've been absolutely phenomenal. Even -- and I understand that they've got kids at home that are on to school and home can be chaos, and they've still got to feed each other and all weird and wonderful things, but yet they've been true to the task. They've worked tirelessly and they've done an absolutely phenomenal job. I'm super proud of them. Obviously, Equites will be paying full compensation to all its staff, so that is as is. The 3 directors have also adhered to Cyril -- President Cyril Ramaphosa's request, and we've all contributed 1/3 of our salary for 3 months to various charities. And then the final element, which is something, I think, which is very important, is that Equites has contributed in excess of ZAR 1 million to service providers and subcontractors and contractors that are working on facilities for Equites. A lot of these businesses have daily wage staff that obviously are not working, and as a consequence, are being paid potentially very little. So we approached all our service providers and we wanted to contribute to make sure that all these people that are at the entry level of earning capacity are ensured that they are given enough money to at least put food on the table. So we welcome the connectivity with our service providers. They've been very honest with us, and we've been very honest with them. And yes, I mean, obviously, we thank the Board for having approved that on our behalf. I talk now very quickly in terms of our developments. We completed 7 developments during the period, 4 in the U.K., 3 in South Africa. We deployed ZAR 1.3 billion in the period to this. And I think the point I want to make about Equites is that part of the reason that we do develop is that, by developing, we build best-in-class. And I think the essence of our organization is that we really are a property company. We love the properties that we develop. We take personal pride in the delivery of them. We take personal satisfaction in them being at the top end of what we do. What I can tell you is we've got immense IP in the team, but more importantly, we've also got -- we've created strategic relationships with the professional teams. And what I can tell you is that last year in November, we took 4 of our professional team over to the U.K. and they got full exposure to the Newlands development team. They've got full exposure to a construction company in the U.K. called Winvic who were very, very magnanimous in hosting us. And what was reassuring is that our professional team came back, and yes, they learned. But what was reassuring is that, you know what, we often beat ourselves up as South Africans just thinking that we do things a lot worse than everybody else. What was actually nice about that was we came back and we realized that we actually do a lot of these things properly, and we are very good at what we do. So we're very touched with that and the reassurance that what that brings. And then the last element I'd like to bring in terms of our developments is that we've made a strategic decision as an organization as well that we are going for green buildings, and we are getting all our buildings certified that we are developing going forward. We're getting them certified to edge. The consequence of that is, obviously, from a pure property fundamental point of view is that we believe that we'll give at least 30 years to our buildings in terms of them being relevant in the real world that is unfolding in front of us. But more important -- but also in addition to that, and Laila will talk to that a bit later on, there are -- will be, we believe, certain financial benefits in terms of how we raise debt against these properties going forward. And just here's a quick page just to show you the 4 of the developments that were completed in the period. Obviously, very proud of them all. And then more importantly, looking forward, we've got 4 substantial developments on the go in South Africa at the moment. We've got 2 smaller developments in the Cape. And then we've got 1 development in the U.K. as well. Unfortunately, all the South African developments are obviously on lockdown. The U.K. one, fortunately, the guys have been back at work already for about 10 days. But the one thing I think that all these deals have in common is that the Equites team has developed trust with the management teams of our clients. And in that trust, it affords the opportunity to build best-in-class but also for the client to be taken along to the journey so that he really appreciates how his business can function better by using the IP that's available to us. So I mean, we'll repeat again. We've obviously got Equites Park Plumbago. We have the Sandvik facility. Obviously, a massive Swedish multinational, and we have a facility also for Imperial. It's the medical side of Imperial. So this is a pharma-grade facility as well. So we're obviously very chopped with that. And then up at Meadowview, which is sort of the other side of -- on the London Road off ramp of the M3, for those familiar with Joburg. And here, we have 2 facilities, 1 for Altron, which is going to bring 4 facilities into 1, and then 1 for Digistics which is basically going to consolidate a few different client businesses into 1 facility as well. And in a nutshell, 4 world-class facilities for 4 exceptional covenants, which we are very proud of. And we look forward to delivering them. There will be certain delays, obviously, to the construction delivery on these. However, we are looking to mitigate those delays. And we'd like to think as soon as we can get the teams back on site, they will be raring to go, and we will try and recover whatever time we can. Obviously, there are no time penalties for us in this process in terms of the JVCC contracts that we've signed, there will be no financial sort of negative imposition on us. On that, that is sort of an update in terms of where we see Equites, where we see it going forward. I'm going to hand over to Riaan now who's going to take you through the property fundamentals and where we are operationally.

Thank you, Andrea. It gives me great pleasure today to present to you operational highlights and also continuously improving property fundamentals. These highlights and our property fundamentals are the result of a single-minded focus by the executive on meeting our -- the exact standards of our investment criteria. I want to focus on 3 elements on this slide. Firstly, our weighted average lease expiry profile has grown to 10.2 years. Combined with that, our South African in-contract average escalation rate is now 7.6%. And we now derive income from 90% of our tenants, which are A grade. Now you combine those 3 statistics with good treasury management, a pipeline that's been unlocked by our development team in South Africa, and the value being unlocked that will be unlocked by our exceptional Newlands team in the U.K. And that presents the building blocks of an exceptional property business, which will provide the requisite predictable and sustainable income streams. Given our impeccable property fundamentals, our business is well equipped to withstand the continued turbulence and even worsening economic conditions. As Andrea indicated earlier, 80% of our South African business has been -- businesses that our tenants of ours have been opened under this Level 5 lockdown and 100% of our U.K. tenants were operational. Our job over the past 6 weeks have therefore been to focus on assisting and working with those tenants in South Africa that have been badly impacted by the lockdown. Our interests are really aligned with them because our business success depends on them getting through this importantly and very difficult period. And we've worked with them by offering them cash flow relief by deferring some of the rentals over a 3- to 6-month period. Fortunately, through these efforts, we've managed to collect 92.8% of the total rental due in South Africa, and 100% of our rentals due in the U.K. You will note from the last point on the slide that only 4.8% of our total rental have been deferred over the next 3 to 6 months. As you can see from this slide, our business has been built for turbulent times, and the robust nature of it has helped us tremendously over this period. We are mindful that the next couple of months will still be very difficult, but we've taken a decision that between Andrea, myself and Laila, we personally deal with all tenant requests regarding rentals over this period. And the channels are continuously open and we will make sure that we do whatever we can to assist these tenants through this period without destroying any value of our business. The next slide illustrates the continued growth of our portfolio, which now at the end of February 2020 was just shy of ZAR 15 billion. Importantly, this growth has been achieved while at the same time having a positive impact on shareholder value. The next slide deals with a very important element. Firstly, one of our primary goals is to enhance the quality, longevity and predictability of our income streams. The lease expiry profile demonstrates that more than 60% of our leases expire beyond 5 years. And in the current financial year, FY '21, there are only 3 leases coming up for renewal. Two of them are industrial leases where we are already in advanced stages of negotiations with the tenant with a view to extending the current arrangement. Also from these negotiations with tenants, we also nearly often see other opportunities for new developments with our tenants. And there are many examples in our portfolio where we use the opportunity to move tenants into facilities that are more efficient and assist them with their business. The next slide shows that currently, our lease expiry profile in the U.K. is at 14.1 years. And in South Africa, at 7.4 years. And on average, it's 10.2 years. And after -- it's important also to note that after the implementation of the Shoprite transaction, our well will be at 11.3 years. This slide clearly shows that the [indiscernible] and U.K. businesses are the main drivers of our business. You will see that the U.K. by value now constitute 42% of our portfolio. Importantly, by rental income, it's just shy of 25%. Through the stringent application of our investment criteria, we've also again reduced our exposure to B and C grade tenants, which you can see on the left-hand side of the slide. These fundamentals are really the building blocks of our business and really, ultimately, the aspects that makes it possible for us to continuously give the returns to our shareholders that are required. And it's something which are at the forefront of every single decision we make as an executive. That concludes the operational highlights from my side. And I would like now to hand over to Laila to take you through probably the most important element of our presentation. Thank you.

Thank you, Riaan. Okay. So I'm going to run through some of the financial highlights. And Andrea touched on the growth in distribution per share. We're proud of our growth in DPS, partly because it has been a difficult year, but also because we're very proud of the quality of our earnings. And I'll talk about that a little bit more and how this growth is made up. But we've fallen well within our target range, in the upper end of our guidance previously provided. And we'll talk about how this growth is made up later on in the slides. And the growth in NAV per share, we've grown by 3.7%. And again, I'd like to emphasize the quality of this growth, which we'll touch on later on. And then the last 3 points, and Riaan said it very well, we've built our business to be defensive. We've built our business to be resilient in uncertain times, such as the ones we currently find ourselves in. So with our low LTV, the extension of our debt maturity profile as well as the quantum of our undrawn facilities, I think, it places us in an exceptional position to weather these uncertain times. On our distribution segment, probably the line item that we will pay the most attention to is the growth in gross property-related income. This is majorly supported by the growth in our like-for-like properties as well as the addition of new properties, which have come online. So the test, the DHL and DPG, Puma and Simba, Nestle, Premier in South Africa, all of those have contributed to the growth in our property-related income. Our net finance cost have increased during the year as our portfolio has grown, so has our debt. And that would result in an increase in net finance cost. This is partially offset by the reduction in finance costs or our cost of funding over the year. We've managed to reduce our cost of funding by 77 basis points, which is admirable, and I'll touch on further on in the presentation. Okay. This is probably one of my favorite slides. It's the growth in distribution per share, and it really just shows the different components which make up our DPS. The biggest component, as you'll see, is the growth in our like-for-like rental income, which demonstrates a very strong underlying property portfolio. There's an impact of 1% as a result of gearing. Our LTV is still relatively low. It's 26%, which is on the lower end of our target range. And as we increase our gearing or as we increase our LTV, there'll definitely be larger impacts of gearing. However, we have to moderate this and model it or balance it very carefully with the increased financial risk associated with increase in that LTV. And 0.4% of the growth is attributable to new acquisitions and developments coming online where these were in excess of our internal hurdle rates. And then 0.5% of this growth is attributable to the decrease in the cost of funding over the period. And we have some impact of the ForEx. And this is as a result of our progressive hedging policy and as a result of the translation of underlying income. And then we've got some small other impacts, and this includes things like an increase in administrative costs as our business grows. The point of this slide is really just to show that our cash generated in the business has increased by ZAR 200 million year-on-year. And this demonstrates, again, the quality of our distributable earnings. The adjustments to take us from cash generated from operations to distributable earnings are largely noncash items, some timing differences and also some items of the capital nature. Okay. An area of focus in recent years has been the capitalization of interest. As we are a developer, and Andrea spoke to how important it is to have a development angle in our business and how it helps us to really create a point of differentiation as well as assets, which are the jewels in our portfolio, we understand that development is a cornerstone to our business. As a result, we have interest capitalization, which is in line with IAS 23. It always has been. Our policy has always been consistent where we capitalize interest to land and properties under development, both in South Africa and the U.K. What's very evident from this slide is that 80% of our interest capitalized relates to properties and land under development in South Africa. And it's interesting to note that land in South Africa is typically held for between 3 and 5 years. And that by the end of that period, you'd usually have a fully built-out high-quality product, which comes online and generates the returns, which you've seen in our portfolio, and 20% of the interest capitalization related to land and property under development in the U.K. What we've put together on the next slide is really just showing you the types of parks we develop. So the land that we're capitalizing interest on ultimately translate into parks. And most of you have seen Equites Park Meadowview, Equites Park Lords View. And we're busy building out Equites Park Plumbago. Over 70% of the interest capitalized in South Africa relates to these parks. And we've seen how these create value over the long term. Okay. On the statement of financial position, I think we can talk about the fair value of investment property. It's increased by ZAR 2.9 billion over the year. This is predominantly attributable to acquisitions and developments in South Africa and the U.K. as well as some fair value uplifts in some foreign exchange movements. On this slide, we -- if you look at the loans and borrowings, you'd see that this has increased year-on-year quite significantly. This is in line with the growth in our property portfolio over the same period. What is interesting to note is that what we have done quite mindfully is we've increased both our sources of funding. So we've increased our funding partners as well as increasing our -- the sources from which we obtain debt funding. So what was quite notable is that in the past year, we've been quite successful in the debt capital market, where we've issued ZAR 900 million of notes. Okay. If we look at our bridge for NAV. What really contributed to our growth in NAV over the period is the fair value uplifts in our property portfolio, some depreciation in the currency and the equity which we raised at a premium to NAV. Once again, I'd just like to point out -- and I'll talk about this in a little bit more detail on the next slide, but we're incredibly proud of the quality of our NAV growth. And the biggest item on our balance sheet is our investment property. What we've done is we've really focused a lot of attention on our policy of valuation. We've decided to make this policy far more robust. What we've done is we've increased our panel of valuers. We now have 3 valuers in South Africa and 2 in the U.K. And very importantly, we've increased the frequency of our valuations. So before, we used to value every property at least once every 3 years. We now aim to value each and every income-producing property at least once every 18 months. And this definitely increases the robustness of our fair values as well as just provides us with up-to-date market information at every reporting date. For the year ended 28 or 29 February, 2020, we've valued over 70% of our property portfolio externally. We did this at interim, and we find it to be very useful because what we really do to test the robustness of our valuations is we look at our inputs and we benchmark our inputs per property type. We also benchmark the average value per square meter to the build costs. What we found is that these values have remained relatively consistent from interim. We've had a slight decrease in the logistics campus average value per square meter. And this was as a result of moderation of rental growth expectations in that sector. And then in the U.K., we've had a slight decrease in the average exit cap rate, and this is as a result of us adding high-quality assets to our portfolio over the past 12 months. Okay. If we look at our net debt dashboard, we've touched on it before, but our loan-to-value has decreased from 26.9% to 26.1% at 29 Feb 2020. Our weighted average debt maturity has increased from 3.6 to 4 years. And very importantly, only 25% or less than 25% of our facilities expire within the next 2 years. So I'm sure you'd all understand that given the uncertain times we find ourselves in, this is incredibly important to mitigate any liquidity risk in the short term. We've touched on before that our all-in cost of debt has fallen 77 basis points over the financial year. This is as a result of a decrease in cost of funding in South Africa and in the U.K. and as -- and a larger proportion of this debt now sitting in the U.K. Our undrawn facilities are ZAR 1.4 billion and our unencumbered properties have increased from ZAR 2.2 billion at Feb '19 to ZAR 2.9 billion at Feb '20. Okay. Our cross-currency utilization. The Board has established an internal limit of 45% cross-currency utilization on our gross assets in the U.K. What we've done very intentionally is we've decreased our utilization from 36% at Feb '19 to 29% at Feb '20. This is as a result of our view on currency and with the depreciation of the rand. But it's also as a result of us drawing down on in-country funding and really changing the way we fund our U.K. business. On the foreign exchange risk, we have a progressive hedging policy, which I'm sure most of you are familiar with. And really, what it does is it ensures certainty in the shorter term. We look to provide certainty over our forecasting and budgeting. And in the longer term, it still allows some exposure to depreciation of the rand. What we've done in the current year is where there was an average exchange rate of 18.64, we've managed to secure an exchange rate of 19.26 over the last 12 months. On our interest rate risk, our hedging policy dictates that we need to hedge at least 80% of our outstanding term loans as well as 70% of outstanding term loans plus capital commitments. You'll notice that we are slightly overhedged in terms of our policy. But that's as a result of the large transaction, which will be coming on board later in this year. What we constantly do is as we enter into transactions, we evaluate the rates at which those transactions are acceptable to us. And we're very comfortable with the levels at which we've hedged in respect of those transactions. Okay. And then Andrea alluded to our focus on ESG. And we've always prided ourselves on being responsible corporate citizens. It's how we conduct our business. It's how we intend to conduct our business going forward, and it will ensure that we have a sustainable portfolio well into the future. We've adopted our approach to sustainability to be aligned with the United Nations Development Goals, and we go into quite a bit of detail both on the slide and in our integrated report. But what I'd like to point out is that not only are we ensuring the quality of our builds and ensuring that we are adhering to the highest standard in terms of green building council and EDGE certification. We have a large focus on the communities in which we operate, on community engagement and on really ensuring the upliftment of the communities and the society in which we operate. All of these, while they are essential to operate as a business in the 21st century, we've also investigated other potential benefits, such as sustainability-linked funding and green bonds, which will then tie in quite nicely. We like to think about these in a holistic manner. And not only will we be doing the right thing, we'd like to believe that there'd be some financial benefits to this in the longer term as well. Again, that's it for me. And we hand you over to Andrea.

Thank you, Laila. Thank you, Riaan. So it leads us to one of the very last parts of the presentation. And obviously, we've kept the best to the last, should we say. And let's talk about our relationship. I mean when we entered the U.K. market, we entered it because we wanted a rand hedge. We did our first transaction, which was the Tesco's transaction in 2016, which has proven to be a very successful transaction for Equites. And during that time frame, the logistics sector has literally gone viral, should we say. The consequence of that is that some of the pricing points at which deals were being done became way too expensive for Equites. And as a consequence of that, we started going into the forward funding development deals. Now the forward funding development nature of these deals meant that we did take some development risk, but we were afforded certain discounts. The consequence of the market going from strength to strength and strength to strength is that the pricing differential between development deals and buying deals out right basically almost became null and void. So in the process of having done a few development deals with the management team at Roxhill. When that management team announced that they had made a decision that they would be leaving Roxhill and they will talk to that in more detail themselves, we obviously engaged with them with a view of why not us kind of thing. And what I'm pleased to say is that today, we are able to share with you the combination of what's been probably 18 months in the making. And it basically represents strategic relationship between Equites and the Newlands development team. The key elements here are that Equites will own of the business. Newlands will own 40% of it. Equites will fund the business. But as the business starts making profit and profits are distributed to the partners, Newlands will be obligated to reinvest 50% of their profit back into the business, thereby, basically having their interest totally aligned with Equites over time. So what are we doing? We're looking to effectively identify strategic pieces of land where we -- where the Newlands' experience is able to unlock that, and also then look to take it to the next level after planning consent to actually bring deals to flow. The team will talk to that with -- for you guys in the upcoming presentation. And I think the other key element in all of this, which was important for Newlands, but we believe is also important for Equites is that there will be deals that Equites potentially may not want to own. It doesn't mean that we won't fund them. What it means is that we'd be very happy to do them on parcels of our land with a view to on selling them in the market. So the market -- the benefit of the U.K. market is very deep. There's lots of deep capital in it with different investment criteria. And we are confident that we will be able to recycle capital and profit back into deals, which will then -- which Equites will want to keep. And those deals will then feed through to distribution and growth of the business as we go ahead. On that note, I'm going to hand over now to the team, and they're going to put in.

The 3 of us set up Newlands developments in November 2018, following the closure of the Roxhill business, which in turn is on the back of the refinancing deal with SEGRO in 2015. At about this time, we had a number of approaches from international investors looking to invest in the new business. We quickly developed a good relationship with Andrea and Riaan and became very impressed with the management team and the vision of the company. We, therefore, made a positive decision to engage fully with Equites. And I believe Andrea has set out the nature of this relationship today. Needless to say, we are very excited about this partnership. If I could ask you to turn to the next slide in our presentation, this details the team structure and individuals in our business covering the development sectors, finance and construction as well as support. Most of these individuals came over with us from Roxhill in 2018, and we believe this is a really strong team, which has a strong track record in the logistics sector. In addition to this core team, an important aspect of how we work is the very close network of key professionals and contacts that we've built up over the last 20 years. Many of these professionals worked solely for Roxhill over the years and now Newlands and cover key areas such as highways advice, infrastructure advice, planning consultancy and architectural services. Now if I could turn your attention to the next slide and talk briefly about our history and track record. So this slide shows a number of successful businesses which the team has built up over the years, going back to [indiscernible] developments in 2002. This business was set up with debt from Halifax Bank of Scotland and was eventually sold to Goodman in 2008. And this led to the formation of Roxhill developments in 2009. Roxhill was set up following the credit crunch and global financial crisis in 2008 with capital from the private equity sector. The business grew significantly over the next 5 to 10 years and really became too large for the private equity backers, which then led to the business being refinanced by SEGRO in 2015. During this period, the team took forward in excess of 1,500 acres of land and delivered over 15 million square feet of floor space for a number of key customers, including Amazon, DHL, DSV, H&M, DPD, Travis Perkins and Lidl to name but a few. Five of the larger and more complex schemes delivered at Roxhill during this time and listed at the bottom of this slide, being East Midlands Gateway, Coventry Gateway, Northampton Gateway, Peterborough Gateway and Wharf Park. Each of these schemes had a number of complex infrastructure or planning challenges to overcome. The combined square footage of these schemes is approximately 20 million square feet. And I'm pleased to say that the individuals at Roxhill who helped deliver these schemes are now with us at Newlands. So we really believe we have a great team and a strong track record, and we're very excited about the potential of the Newlands business. We already have some really exciting projects, which we're working on. But before we talk about these, I would like to hand you over to Simon, who's going to talk about the U.K. market.

Thank you, Graham. Prior to the COVID-19 pandemic, despite uncertainty surrounding the ongoing Brexit negotiations, the U.K. logistics development market remained robust and active with high levels of demand for development land opportunities ensuring that land values were increasing and rents in core locations were continuing to rise. The M1 motorway corridor and its surrounding areas, the East Midlands and the Southeast locations were the most active with demand from occupiers continuing to increase. This demand was led by online retailers, which accounted for approximately 40% of take-up of facilities over 100,000 square feet in size. Take-up has also been strong from direct e-commerce, parcel delivery operators as well as third-party logistics contractors. The Newlands team are currently developing approximately 1.5 million square feet of space at Peterborough Gateway as well as 1 million square feet of space for Howdens at Wharf Park in Northampton. Subject to the ongoing COVID-19 situation, all of these facilities will be completed by the end of quarter 3 of this year. The COVID-19 pandemic has had a sudden and significant impact on U.K. market. However, we believe the logistics and supply chain industry and the development of logistics facilities will become an absolutely key focus for the vast majority of operators. A number of short-term requirements from the health care sector, supermarkets, e-commerce and logistics operators have come to the market since the emergence of COVID-19. However, in the long term, supply chain risk mitigation and resilience will become a key focus. As a result, a number of occupiers are now undertaking reviews of their supply chains, and there is already evidence of operators looking to develop strategic new logistics facilities in an attempt to ensure that their supply chains are efficient and robust. There is also the potential for U.K. manufacturers to now increase operations within the U.K., which will have an impact on demand for warehouse space. It is key that developers and investors understand the key drivers and future strategies of individual operators, which is and will continue to be a focus for the Newlands team. I believe the COVID-19 pandemic will accelerate trends already seen across the sector with demand from retailers, including last mile delivery, direct e-commerce and parcel delivery operators continuing to rise. The pandemic is highlighting the critical importance of supply chain and logistics property and infrastructure. And I believe, therefore, that the sector is robust and well placed following the recovery from COVID-19.

Thank you, Simon. So we would now like to talk about 3 key projects, which we're involved with right now, and we are very excited about. The first is our scheme at Basingstoke. Basingstoke is a city approximately 50 miles from Central London and is approximately 30 miles from London Heathrow. As you can see on the first slide, it's approximately equidistant between Southampton, where there is a major seaport, and London Heathrow. The land that we control at Basingstoke is approximately 90 acres, and it sits immediately adjacent to Junction 7 of the M3 motorway. This provides a direct and fast connection to the M25 London Orbital. So the site sits in an excellent location to serve London, the wider Southeast, but also London Heathrow and the port of Southampton. The next slide details the current master plan which we are working towards. And this shows a single large units of approximately 600,000 square feet, together with some midsized units of between 150,000 to 200,000 square feet. The scheme totals approximately 1.1 million square feet. While the site doesn't have planning, we were attracted to the opportunity both because of its location, but also because we felt there was not enough deployment land in Basingstoke, and it was a really strong case for securing planning permission for logistics warehousing. Basingstoke has a very low supply of employment land and no other large sites were being promoted in the area. In order to secure the opportunity, we had to go through a formal selection process in competition with a number of other developers, including SEGRO, Goodman, St. Modwen and [indiscernible] We had a good relationship with landowners' agent, Avison Young, and he knew and understood our track record very well. But importantly, the landowner was impressed with the track record and the team's proven ability in securing planning permission on schemes of this nature. So we are now well advanced with the preparation of a planning application, and we hope to submit this in July. And we believe that a consent should be achievable by the end of this year. Without even beginning marketing scheme, we have already attracted significant interest in the development. And we're very close to finalizing heads of terms with an existing very well-known customer, which we hope to be able to announce later in the year. So this is a great scheme and a fantastic location, which we're really excited about. I would now like to pass it over to Ashley, who's going to talk about our land at Peterborough, and then Simon, who will talk about Barnsley.

Good morning, everybody. I'm Ashley Hollinshead. I'm the Finance Director at Newlands. And I'm just going to walk us through a couple of slides about Peterborough Gateway and the opportunity that it presents there. Peterborough, some of you may know having visited, is a fantastic site that has really taken advantage of some of the new connectivity links from the dual carraging of the A1 all the way from London up to Peterborough via Cambridge. This has really put Peterborough on the map in terms of the logistics network and location, and has seen Roxhill have a tremendous success over the last couple of years at attracting many new occupiers to the area. The site is just shy of 15 acres and provides an opportunity to put a building on around 300,000 square foot. However, the likelihood is, is that we'll do a deal on a smaller scale and be left with 5 or 6 acres to do a further building. We are currently in exclusivity with an international e-retailer for circa 10 acres of this site. But I think it's fair to say that we have got interest from another 2 occupiers that would be interested in taking the whole of the scheme. So I think the reality is that we are running with the e-retailer at the moment as it will present an excellent opportunity for Equites with a great covenant on its balance sheet.

Right. Let's turn to an overview of what the Peterborough Gateway opportunity is. So I've got an aerial view here, which brings home the scale of the actual park and the extent to which it has been developed over the last couple of years. We, as Roxhill have completed about 2 million square foot of development in the last 18 months, most of which will be completed on site over the summer, in particular of interest are the 2 units on the far right-hand side, which are the Coloplast and DSV units, which are both in the Equites portfolio. So as you will appreciate and some of you have been there, this site really does present an opportunity that Equites know and love as part of its portfolio.

Hermes are a German parcel delivery and collection company who operate throughout Europe and are one of the largest operators in the U.K. market. The company forms part of the [indiscernible] Group, one of the world's largest e-commerce operators. The Newlands team developed a 270,000 square foot bespoke parcel sortation facility in Rugby, which was completed in late 2016. The respective teams maintained a close working relationship and Hermes made Newlands aware of the company's proposals to develop a similar facility to serve both the Midlands and Northern markets. Newlands proposed a site at Junction 36 of the M1 in South Yorkshire. And following an extensive process, Hermes selected this site as the company's preferred option. The proposed Hermes facility is to be 340,000 square feet on a site of 50 acres. The proposed lease length, geared rent and fixed rent review structure reflect the low density of the facility. This density allows for the extensive on-site vehicle accommodation that Hermes require due to the nature of the company's operation. The site is allocated for development and is owned by the same estate as the Peterborough Gateway development. Hermes made formal representation to the estate, promoting that Newlands be selected to deliver the new development which, along with the success of the Peterborough Gateway scheme, insured Newland's appointment. Hermes' recommendation was as a result of the Newlands team's delivery of the facility at Rugby as well as its track record in developing schemes of this scale, which require extensive earthworks and infrastructure solutions.

Fantastic. Well, welcome back, and thank you to the Newlands team for that most insightful presentation. Obviously, we've intimated what the relationship was building up to, and I think today is a good first presentation to actually show you the possibilities that lie before us in terms of our opportunities in the U.K. So in conclusion, obviously, like everything prospects, we're obviously very comfortable with our balance sheet. We're very comfortable with the liquidity of the cash available to us for us to basically meet every single one of our obligations and commitments that we've contracted to. We still will look for further opportunities and price them accordingly, and we hope to continue to grow the business. We believe that the portfolio has got a certain stress level, which makes it resilient to the COVID implications on the economy. But the complete unlock of all that is still too unknown to all of us. We're constantly stress-testing our models in terms of bringing things on site, in terms of our rent collections on a monthly basis. And all these things are key elements of the processes that we drive internally. And as a consequence of the numerous unknowns, we're unfortunately unable to give you guidance in terms of the year. We believe that, hopefully, within the next sort of 3 to 4 months, when the world sort of settles and finds a quantum of its new normal, that we would welcome the opportunity to put guidance out there. But we would only want to do that at a time when we have much, much, much more clarity in terms of what's going on. So on that, I mean, that really calls the presentation. In concluding the presentation though, it would be a miss of me, firstly, not to thank our Board, our Chairman, Leon Campher, in particular. His insights into what's also been happening behind the scenes with his position at ASISA has been very helpful in formulating sort of our ideas and our opinion. And as ever, he is a welcome and very important part of the Board. This doesn't take anything away from any of the other Board members, and we thank them all equally. But I would like to firstly have a special mention for Laila. As a lot of you will know, Laila stepped into the breach of the financial director resignation in December. And I think she's done an absolutely sterling job. She's worked tirelessly. She's managed her team superbly. And on that note, I'd also really want to extend a massive thank you to her team. Her team have been fantastic. I mean, we had an addition to her team in [indiscernible] But obviously, Chris and Nas have been invaluable support to Laila and really thank you to them. But takes nothing away from me thanking also the rest of the team, from Riaan's operational team done unbelievable work in making sure that billing processes have been followed meticulously, that renegotiated addendums have been put out to clients, had been signed and collated and uploaded onto the system. But the billings that are going out now take reflection of some of the cash flow issues that Riaan alluded to earlier. And then obviously, the development team that is obviously very, very important to the Equites strategic model. I mean, John and his team have been working invaluably in the background, making sure that as soon as we are given the opportunity to go that we go. So thank you really to the whole Equites team. It's been a privilege to lead you. And it's been amazing just to see under such, such difficult circumstances how we all rose to the occasion. And I am really, really, really proud and very happy to be part of this team. On that, I think that calls it. And we do have a -- we have a bit of a Q&A now. So we have received a couple of questions that have come through the system. I'm going to hand over to Riaan, who has been receiving the questions. Riaan, maybe you can read out the first question.

Thank you, Andrea. The first question is from Tanase. It asked when was the last time that the properties were valued externally and what percentage of the external valuations were performed at that time?

I think we touched on this earlier, and it's something that we're definitely proud of and just the increase in robustness of our valuation. The last time our properties were externally valued was -- as [indiscernible] said, the reports were issued around March, the end of March, and we valued -- externally valued 61% of our income-producing properties at that date.

We've had a couple of questions come in for our Newlands team. The first one from Justin, which asked, what is the likely capital value of the 3 schemes you mentioned and talked about today? And also what sort of discount are assets likely to be acquired at? Graham, you or one of your team members, would you be able to take that one?

Yes, sure. I'll take that question, Riaan. Yes. So look, if we look at the 3 schemes that we've discussed this morning individually, the Hermes investments at Barnsley is likely to be valued at about GBP 80 million. The -- an adjoining plot that has the ability of developing out about 500,000 square feet, and that's likely to have an end investment value of GBP 50 million. If you then move down to the Peterborough plot that Ashley described earlier, that will probably have an end investment value of about GBP 20 million to GBP 25 million. And then finally, if we move down to Basingstoke, the big pre-let that we are currently working on of around about 600,000 square feet, will have an end investment value of about GBP 200 million. And then the rest of the scheme would probably have an investment value of about GBP 75 million to GBP 80 million. So if you add all of those 3 schemes up together, there's probably an end investment value just to those 3 schemes as somewhere between GBP 425 million and GBP 450 million. In terms of the second sort of aspect of that question, the dealer structure that Andrea described earlier and how that works in terms of the JV and the profit that it kicks out. Obviously, each scheme is different in terms of its profitability. But generally speaking, once profit is [indiscernible] effectively means that assets are acquired on balance sheet of about 75 to 100 basis point discount to market.

Thank you very much, Graham. There's another one here which asks from Peter, what other sites pipeline are the Newlands team looking at for the Equites-Newlands joint venture.

Okay, perhaps I'll answer that question as well, excuse me. So the team here is very busy looking at a number of other opportunities, we'll look to announce sort of during the course of the remainder of the year. Most of those schemes that we're looking at are held under what we call an option agreement, which means we then take control of the land for sort of 5- or 10-year period and commence discussions on planning. But we're not committed to acquiring the asset. It's just a position that allows us to control the asset whilst we take forward the planning process. And then as and when you get planning on a site, the asset is valued at that point in time, which sort of helps protect us in terms of moving to land values as well. So there are a number of sites that we're looking at that will help us grow the U.K. business. And we'll look to announce some of these during the course of the next 12 months.

Thank you, Graham. And the last question on -- that we received on the U.K. You've told us that the Hermes deal is showing good potential. If everything goes to plan, when do you think you'll get confirmation and how long would it be until Equites-Newlands have an income-producing asset? Maybe your -- one of your team members can answer that one for us, Graham.

Thank you, Riaan. It's Simon. I'll answer that question. Legals with Hermes, I'm glad to say are in advanced position. Obviously, we know them very well, having been through the process before, which I've described on this slide earlier. In terms of the planning application for the [indiscernible] facility. We're well progressed with that. We're looking at application being submitted to [indiscernible] on the 1st of June this year. That would then lead us to a determination by the local authority in September, which is the target date. We will then start on site very, very quickly with the required infrastructure, works to service the site and put utilities in, with the start on site for the actual Hermes facility in early next year, January next year, which would then provide Hermes with the required early access date of -- the target is the 1st of July, which gives them a period of time to fit out their sortation equipment for actual completion in September of next year. That's the time scale we're working into.

Okay. So we have a question from [indiscernible] who's asked, have any tenants declared a force majeure. I think, Riaan, you'd be best suited to answer this question.

Thank you, Laila. None of our 64 lease agreements have force majeures provisions in them. I think the second element that's important to note is that different to a retail shop in a shopping center, our warehouses are operational in the sense that they are achieving the use and enjoyment for our tenants, which ultimately, is the storage and warehousing of their product. As a result of that, our discussions with our tenants, we're not surrounding this majeure or force majeure, but rather those tenants that have been impacted through the stage 5 lockdown, some of them required some assistance to get through the next 3 to 6 months. And we focused on helping them from a cash flow point of view by deferring some of the immediate rentals. So we've not had any impact from that side.

I think we've got one last question from Rajesh, who's asked, what is your view of retail and office property valuations in South Africa? Do you see any interesting opportunities to get involved or more pain to come?

I think I'll take that one. Rajesh, thanks for the question. I mean, firstly, for us to occasion an opinion on retail and office property, I think, would be a miss. It's a property sector that we've not been involved in, we have no expertise in. And hence, I don't think it would be correct to us to occasion an opinion on that. In terms of seeing opportunities to go there. Now unfortunately -- well, not unfortunately, I mean, obviously, the essence of our presentation today started with our strategic intent. Our strategic intent is to be a globally relevant, best-in-class logistics, landlord and developer. That is not going to change anytime soon. So yes, office and retail is not on our horizon, and we will remain true to what we do and what we think we do best. Okay. I think -- and that's the Q&A done. Again, finally, thank you so much for joining us today. We look forward to interacting with the various shareholders and analysts in the next couple of days. We've got a few one-on-ones coming up. And -- yes, and God bless you all and may you all -- may we all remain safe in this difficult time. Thank you. Bye-bye.