Growthpoint Properties Limited (GRT) Earnings Call Transcript & Summary

Welcome to the results presentation for Growthpoint Properties for the financial year-end 30 June, 2022. I was trying to start relatively promptly because we obviously have quite a big audience online as well. And I'm sure everybody -- if their lives are anything like ours, you're living by the hour, by the half hour, by the 45 minutes from one meeting to another. So I'm going to try and keep it on schedule. And so I'm going to get straight into it. I think as has become customary, I'm going to deal with agenda items 1 to 4. All of you should have a hard copy of the presentation on your chairs. So please refer to that. And if okay with everybody, we'll do questions at the end, we'll be available certainly for a good hour at least afterwards for questions and interaction. Welcome to some of our management team and some of our directors and former employees as well that are here today. Then Estienne will deal with the agenda items 5, 6 and 7, and then I'll come back to try and conclude and perhaps give some perspectives on the way we're seeing the year ahead. We'll start off by just reviewing some of our strategies and touching on what we're doing in relation to the various elements of our strategy. I think it's very important to note that this year was another year, where we spent an inordinate amount of time on focusing on the balance sheet, strengthening the balance sheet, ensuring liquidity is in place, all of which are important in relation to and to enable us to pursue the strategic initiatives that we have got on the go. It was pleasing for us to see our loan-to-value ratio. Group consolidated loan-to-value ratio come down from 40% to 37.9%. We have a fortune of liquidity on balance sheet at 30 June. And you might ask why, and I'll give you a bit of a perspective on that, but ZAR 10.3 billion worth of unutilized, preapproved facilities with our banking partners and ZAR 1.5 billion in cash. That's ZAR 11.8 billion in aggregate. Now that is quite a staggering number. But sitting behind that is our strategy of looking forward to the imminent refinance of our euro bond. We have a $425 million euro bond, which needs to be refinanced in May 2023. So that's probably from now, what about 7 or 8 months away. As you will all be aware, the global financial markets and debt capital markets, in particular, are really in -- sort of in turmoil at the moment. Pricing has gone up tremendously. And the current take on it is that if we were to refinance in the debt capital markets, our cost of funding would certainly go up quite dramatically. And there's even a question on whether one can get the kind of liquidity that one would need. Can one get another $425 million or EUR 350-odd million, whatever the number is that we're looking for. So we're preempting the fact that we may repay that facility as opposed to refinance it. And therefore, we've put in place all the contingencies and the facilities for us to be able to just draw down on these facilities and repay that debt. So that's the reason why it might seem excessive what you see on balance sheet -- or not on balance sheet, but has committed facilities at 30 June. Then again, talking to liquidity and, let's call it, the balance sheet. You may see that we've increased our dividend payout ratio just a little bit from the 80% over the last year or 2 to 82.5%. As a consequence of that, we're effectively retaining ZAR 935 million worth of cash that still talks to obviously strengthening the balance sheet and essentially looking to fund our future CapEx requirements and normal maintenance CapEx, if you want to call it that, from retained income, as opposed to going out and incrementally borrowing more to fund those expenses. So sitting behind the logic of a slightly higher payout ratio as well as, I guess, comfort from the Board that the balance sheet is in good shape, that we have got ample liquidity. We also, I guess, listening to some of our shareholders, who are going for a higher payout ratio on the, let's call it, the effective flow through of the dividends we receive from Growthpoint Australia and Globalworth. And then also the fact that the -- I lost my train of thought a little bit here -- but I mean the higher dividend, the flow through -- also the tax. So obviously, whatever cash we retain, there is a tax consequence. Shareholders have been saying they'd rather receive the money than us paying tax, which is a valid sort of comment. Balancing all of those balls and we've decided to pay out a little bit more. We do, therefore, then pay a little bit less tax as well. And I think shareholders should be pleased, I guess, with the higher -- effectively the higher dividend payout ratio. Just on international expansion. One of the other key strategies of ours. Target is to get to about 50% of assets offshore and about 40% of our earnings before interest and tax. Offshore currently, we're at 43.5% of assets and 28.4% of our earnings before interest and tax. I think there's certainly an acute awareness from management and the Board that achieving this in a capital-constrained environment, we do still see ourselves in a capital-constrained environment. The ability to just gear is not there, the ability to issue equity, when our share price is trading at a 40-odd percent discount to NAV, is not there. So we will be capital constrained in terms of pursuing this strategy. But incrementally, we're going to continue along this path. And ultimately, the target would be as set out on the top of that slide. So during the period, we did invest another ZAR 480 million into Capital & Regional, our U.K. subsidiary and also a further ZAR 11.3 million into Lango, which is the Africa fund that we manage in partnership with Ninety One. And it's also, I think, pleasing for us to show hard currency dividend income of ZAR 1.5 billion for this financial period compared to ZAR 1.4 billion in the prior period. That's up about 5.6-odd percent. And clearly, we would seek to grow that contribution over the short to medium term. Focusing on the optimization of the South African portfolio, one of the other strategic pillars. We see this as an ongoing focused disposal strategy. Disposing of noncore assets and rebalancing the South African portfolio towards higher-growth sectors as well as regions in the economy. Obviously, the office sector remains particularly challenged. We also see how [ Ting ] has been challenged in terms of economic prospects and economic growth relative to the Western Cape and KZN. So as part of this ongoing rebalancing, we would seek to rotate into some of the higher growth asset classes as well as regions in the economy. In this -- in pursuant of the strategy, we did sell ZAR 2.1 billion worth of assets this year, 37 properties in total at a book profit of about ZAR 240 million. And at balance sheet date, we held another 5 assets for ZAR 72 million for sale. I think it's just important cumulatively to understand that we've sold since 2017, 113 properties to the value of ZAR 9.7 billion, ZAR 4.7 billion of that were offices, EUR 2.2 billion retail and ZAR 2 billion of industrial properties, and then there's about ZAR 800 million of Trading & Development assets that were also sold during that period. And then lastly, just touching on the Growthpoint Investment Partners. This talks to growing new revenue streams, our funds management strategy. We have effectively got about ZAR 15.6 billion worth of assets under management at the moment across the 3 funds that we have. That -- the initial target was to get to ZAR 15 billion. So we have achieved that. And we've set ourselves a new target through to 2027, so call it a 5-year target to effectively double assets under management, taking it from ZAR 15 billion to ZAR 30 billion. And that will be a combination of growing the existing 3 funds that we have, but also looking at the introduction potentially of new funds or new asset classes, alternative asset classes that we could create a new product from and essentially go out and target institutional investors to co-invest alongside us. And I think that's why we've sort of put a brand around the strategy of ours called, Growthpoint Investment Partners. We co-invest with third-party capital, but then we manage these funds and obviously earn a fee for doing so. In the year, we successfully launched the student accommodation fund. There's about ZAR 2.1 billion, ZAR 2.2 billion worth of assets in that fund. And the -- I think, a very interesting new product, and certainly, we were able to raise ZAR 1.2 billion worth of third-party capital. We co-invested ZAR 240 million from the Growthpoint balance sheet, and we attracted ZAR 1.2 billion worth of third-party capital. In total, for the funds management or business or growth on Investment Partners business, we generated ZAR 67 million worth of management fees. That's ZAR 41-odd million from the healthcare fund, ZAR 14.5-odd million from the student residential fund and ZAR 11.5 million from Lango. And then lastly, Trading & Development also talks to some of these new revenue streams of ours. It's not so new, I think, has become part of our DNA almost that we have a very successful Trading & Development business. It's very complementary to the fund management business as well, in as much as we're able to create new greenfields product for some of these funds. Last year, we completed the Cintocare Hospital, which we sold to the healthcare fund. And as we sit here today, we've got 2 residential -- student residential schemes that we're busy building, one in Cape Town and one in Gauteng, the Cape Town one, obviously, servicing the needs of the of UCT and the one in Wits servicing the needs of Wits. The one Gauteng is in Wits. So trading profits were ZAR 81 million. Our development fees were about ZAR 8 million and net property income from some of the assets that are in the Trading & Development division. We hold them for a period of time prior to sale. We earned ZAR 56.8 million of rental income on those assets that are in the pipeline. So moving to salient features for the period under review. The SA REIT FFO number is up 13.9% to ZAR 5.3 billion. Our distributable income is ZAR 1.556 and that's an increase of 5.1%. Our dividend is ZAR 1.284 and that's an increase of 8.4%. And you might say, why is the dividend growth a little bit higher than the distributable income number. That's where we've tweaked the payout ratio. So we took the payout ratio from last year was 80%. And this year, we've made it 82.5%. So there's a bit of an increase in the dividend per share number. Group assets grew by 5.2% to ZAR 160.8 billion. LTV, just a shade under 40%, or a shade under 38%, 37.9%. And NAV per share up 6.7% to ZAR 21.58. This slide really just tries to give you a sense of where the growth for this year came from, what were the different elements within the business or our portfolio of investments that drove the growth? And where obviously, did we see a bit of a lag. The total movement and increase in our distributable income was ZAR 255 million for the period. That's the 5%. And the key moving parts within that, I think, starting from the top, the South African business was negative ZAR 176 million. And that's a combination of the fact that we sold a number of assets. I mean, we mentioned the number before, ZAR 2.1 billion of disposals. And then clearly, we're still seeing negative reversions in the South African portfolio. So on renewal, across the portfolio, retail and office and industrial, we're still seeing negative reversion. So a combination of those 2, certainly, the bulk of the number is attributable to the disposals, about ZAR 114 million odd of the ZAR 176 million was due to disposals. The South African finance cost line, we actually saw a saving there of ZAR 129 million. That's really just a play on the fact that the equity that we raised in November 2020 and the DRIP that we offered in December 2020, the combination of that cash that came in, we essentially used that to settle debt. The impact in 2021 number was only for 6 months, whereas the impact on this year's number was for a full 12 months. So that effectively drives the saving in finance costs. Standout for the period is V&A. V&A grew their contribution by ZAR 202 million. Now coming off a relatively low base, bearing in mind the V&A took lots of pain during COVID, given its exposure to the international tourism market. And we're very pleased to say that their Waterfronts made a pretty impressive turnaround. And so you can see the benefit of that coming through to the ZAR 202 million improvement from -- improved contribution from the Waterfront. Growthpoint Australia continues to perform well. It grew its contribution by ZAR 79 million. It's a combination of a slightly higher, 4% higher dividend in Australian dollar terms, a little bit less on the dividend withholding tax. And then obviously, there's a bit of a currency mix in that as well. Globalworth was negative ZAR 52 million driven by the reduced dividend. The euro dividend was down by 10% from --to EUR 0.27 from EUR 0.30 in the year before. Capital & Regional was a positive ZAR 50 million, and that's effectively a result of the fact that Capital & Regional decided to pay a dividend for the first time in 1.5 years. And in the prior year, we received no dividend from Cap & Reg. Then there's a number of sort of 5 or 7 or 8 lines there, which talks to all the different funds, so marginally improved contributions from the different funds as well as their management companies. I'm not going to go through them individually. And I'll just finish off at the bottom with the Trading & Development business. Now although it contributed handsomely to the result for the year, it was ZAR 40 million less than the prior year. Where in the prior year, we had trading profits of rather develop -- trading profit of ZAR 193 million -- sorry, ZAR 115 million versus trading profits for this year at ZAR 81 million. Looking through the income statement. Again, lots of numbers. I'm not going to go through each line, but at a very high level, gross property income grew very marginally at 0.6% to just short of ZAR 12.9 billion. Our property expenses grew at 2.3% to ZAR 3.5 billion. That left net property income at ZAR 9.368 billion, just short of ZAR 9.4 billion, identical number to the year before, quite coincidentally. Our other operating expenses grew at 37.5% to ZAR 888 million, leaving net property income after operating expenses at ZAR 8.48 billion or 2.8% down. Finance costs, on the other hand, was 4.1% down. So savings in total finance costs from ZAR 3.3 billion down to ZAR 3.2 billion. And then the finance and other income, which essentially gives the contributions from the various investments that we have, that was up 21.9% from ZAR 921 million to ZAR 1.123 billion. The biggest contributor there, as mentioned before, was the V&A Waterfront, contributing ZAR 567 million. That's our half share, bearing in mind we only own half of the Waterfront, with the PIC on behalf of the Government Employees Pension Fund owning the other half. In the prior year, its contribution there was ZAR 365 million. So if you may take out the adjustment at the second last line there, the adjustment for noncontrolling interest and tax and various other charges that leaves us with distributable income up 5% at ZAR 5.307 billion compared to ZAR 5.052 million in the prior year. We try and reconcile then from our distributable income down to the SA REIT FFO number. So we report as well in terms of the SA REIT best practice rules and regulations. So we start off with our distributable income number and make a whole bunch of adjustments there. Again, I'm not going to go through them individually. But the bottom line, we get to our SA REIT FFO number of ZAR 5.298 billion, and that's 13.9% up on the prior year. And just a feature when you try and understand these numbers and interpret the numbers, what impact did currency and foreign currency have on the numbers. Looking through the income statement, I think the average exchange rate was slightly lower for FY '22 than FY '23 across all 3, the currencies that we're exposed to, which is the Aussie dollar, the pound and the euro. But on balance sheet date, we actually saw numbers that were slightly higher. Looking at the balance sheet then. Property assets, up 5.6%, ZAR 136 billion compared to ZAR 128 billion. A big increase there in Growthpoint Australia. I think it was driven not only by increases in valuations but also the currency. Our equity investments were up -- sorry -- down 2.8%. The big play -- the big play there, I guess, is the Waterfront and investment in Globalworth. Just on the Waterfront, the number always confuses me a little bit, when I look at it. So just for your own benefit. We show sort of our investment in the Waterfront in 2 lines here. Here the one is the equity value. And then just below that little box, we have a line there, which is loans, which refers to loans granted. So we've been funding the Waterfront partially with shareholder loans. And our shareholder loan to the Waterfront there is ZAR 3.3-odd billion. So if you aggregate that with the equity number, you're getting to more or less the half share of the asset value of the Waterfront at ZAR 9-odd million. So a few other smaller moving parts there. But the -- I think the other big number to focus on, on the balance sheet is the debt number. So total nominal borrowings of ZAR 63.4 billion, that's up 4.9% compared to the ZAR 60 billion in the prior year. The biggest jump there, I think, is the -- again, the impact of Growthpoint Australia. They have increased their gearing a little bit and then also, obviously, some currency movement in there. And that was offset, in many respects, by the reduction in debt at Capital & Regional where you can see our the ZAR 8.3 billion dropping to ZAR 4.6 billion. Sorry, last one here is just the NAV. NAV per share -- sorry, let's call it shareholder interests, up 6.8% to ZAR 73.8 billion. Right. Just talking to our international investments, briefly. I'm going to go through this relatively quickly, Estienne always complains that I never leave him enough time and then we run over, and I blame him. So I think GOZ to some GOZ up is really that, it continues to perform extremely well. And for FY '22, it produced its best performance ever. We've been invested there since 2009. So we've had a 13-year track record there of uninterrupted dividend growth -- sorry, not uninterrupted dividend growth, but sort of FFO growth. We've played around with the dividend and the dividend payout ratio a little bit. In COVID we pulled the dividend payout ratio back a bit. So -- but it grew its FFO at about 7.8%, it's FFO per share, AUD 0.277 compared to the AUD 25.7 in the previous year. The dividend growth was 4%. It remains a core investment for us. Its gearing is well under control. It's going to nudge up a little bit now post balance sheet. There were a couple of -- a bit of activity at GOZ. They bought another property asset and they -- in fact, today, we heard that they did reach financial close on the acquisition of Fortius Asset Management or Fortius Funds Management. The Growthpoint Australia business is also diversifying into funds management, and we spent ZAR 45 million buying a fund manager that has about $1.9 billion of assets under management. So the company remains very liquid. It's got great access to debt, to facilities. It had a 9.4% increase in its underlying NAV per share. And I guess the only exposure really that we have at GOZ is that 60.9% of its interest rates are hedged. So it's a little bit more exposed to variable interest rates. And I'll talk to the outlook for GOZ in a moment. But the biggest, I think, impact going forward for GOZ, negative impact for GOZ going forward is linked to higher interest on the unhedged portion of the interest rates. It's got a ZAR 5 billion portfolio, very well diversified. It's got extremely well-leased portfolio. 96% of the portfolio is leased to government listed and large organizations. Its vacancy factor is nominal. It's got a 6.3 year average -- weighted average lease expiry that is, I guess, more than double the weighted average lease expiry of the South African business. High levels of tenant retention. And as I mentioned, we have made some pretty good acquisitions towards the back end of the year and just post year-end. And we're very excited at the addition of the fund management business and the prospects to grow that. Globalworth. We own 29.4% of Globalworth. The cost of our investment is ZAR 8.4 billion. Market value is ZAR 6 billion, it doesn't look very good, isn't very good. I think the reality is that, that share price of GOZ is -- sorry, of Globalworth is, for all intents and purposes, I would say, meaningless. The share doesn't trade, 95% of the shares are held by 4 shareholders, of which we are the -- let's say, we're an equal shareholder almost with the other 2 that have pulled their shareholding. So there's 60% shareholding, which is Global -- which is around town and CPI. They pulled their shareholding, and they own slightly more than us on an individual basis, but collectively, as they pulled their shareholding, they got 60%. So we saw a 10% drop in the dividend. I think 2 main issues there. I think one is one-off costs associated with some corporate action, which depressed the second half of '21 earnings. And then the company continued to hold large cash balances where there was, let's call it, a cash drag, which in large part, in the last sort of month of the financial year, of our financial year anyway, just before 30 June has been diminished now in that the company used EUR 323 million of that cash to settle one of its bonds, or the inaugural bond that they issued, Eurobond that they issued. So at least, there should be no further cash drag on that amount going forward. Gearing sitting at about 41-odd percent. The company does still have great access to liquidity and recently signed a 6-year loan facility for $85 million with IFC. And in the short term, there are no real debt maturities or expiries to concern -- to be concerned about. I think the next bond expiry is March 2025. So the Globalworth portfolio, I think, at the moment, the activity there is focused around some redevelopment in Poland and then some newer developments and additions to the portfolio in the industrial sector in Romania. So I think the one sector that continues to perform well in Europe is the industrial sector and quite nice small developments and acquisitions that Globalworth did in that space in Romania. The redevelopments in Poland are focused on 2 assets. One is called Rinoma, the other one Supersam. These are mixed-use properties that had, let's say, probably the mix within the mixed use was too weighted to retail, and the company is in the process of redeveloping those -- the total square meters of those, about 75,000 square meters. It's a great portfolio. It's about EUR 3.2 billion worth of assets, split by value, roughly 50-50 between Poland and Romania, 1.4 million square meters. And albeit that vacancies have crept up marginally, which is having a bit of an impact on the financial result. A newish dynamic has crept into that business and that talks to escalations in rentals. Now for best part of 5 or 6 years, there've been very few or limited escalations in rentals in that market. But the bulk of Globalworth's leases are linked to CPI. And it's a basket of euro CPI, and that number is currently running at about 8%, 8.5-odd percent. And so Globalworth at the moment is able to pass on these CPI adjustments. These are annual CPI adjustments to its tenants. And so, we will see some of the benefit of that coming through. Ultimately, I guess, one would need to understand whether that is sustainable or whether -- when those leases come up for renewal, you're going to then just see a negative reversion again. But certainly, inflation is playing a major part in that part of the world. And we see that in the short term actually, has been positive. Capital & Regional. We own 60% -- 60.8% of the business, cost of ZAR 3.5 billion and our market value is about ZAR 1.1 billion. For the first time in about 18 months, they've declared a dividend. So that's been positive for us. And I think the company did extremely well. Management, they have done a tremendous job deleveraging the balance sheet over the last 18 months. Through a combination of, let's call them, capital transactions, firstly, the equity raise, it was about a GBP 30 million equity raise. And then some very neat deals, where the company bought back debt from some of the lenders at a discount. We bought back an asset. I always struggle with this concept buying back an asset, but we already owned the asset. It was already on our balance sheet. But I mean, the LTV was 150% or something on this particular asset. So albeit it was on our balance sheet, the banks really owned it. But we've kind of bought that asset back at a value of half of the debt from the bank. So again, that's very NAV accretive when you're buying back the debt at a discount. We've also sold some assets. We sold a small office building in Maidstone. And then post 30 June, the cash has come in from the sale of the residential land attached to the Walthamstow property and GBP 40 million for the sale of Blackburn. So on a pro forma basis, gearing in that entity is now down at 40-odd percent. And operationally, things are actually still quite -- performing quite well. I mean the letting is fairly robust. I mean occupancy is about 94%. The footfall has increased. The collections are up at 97%. So on the ground operationally, things are actually holding up quite nicely. But I have to say that the U.K. certainly of all the sort of regions and certainly, if you look through to Europe, the U.K. does have a couple of challenges ahead in the short term. But the position of this portfolio servicing, let's call it, the lower end of the market, the needs-based retailing, we think, will be defensive. And we continue to support the management team and their strategies. I'm going to hand over to Estienne, and then I'll come back after.

Morning, everybody. So we can work through the South African portfolio and the South African business broadly. There is sort of a solemn optimism about, and that is probably as a result of the improvement in many of the salient features and key metrics that we cover in the business. So if you go and look at COVID, hopefully, COVID is now behind us. And certainly, if we look at the statistics, the level of discounts that have been granted has certainly dropped off quite significantly. So there are still a couple of smaller tenants in the retail space here and there that have required help through the year, but we're certainly much better off from this perspective. Vacancies have also dropped quite significantly from 11.6% to 10.3%, mainly in the industrial space. And then our teams have been very, very active in letting just close on 1.4 million square meters. So just to contextualize that, that's about the size of Sandton's GLA that we're having to relet every year. So you can imagine, operationally, that is a huge task. From our -- all that letting came at a bit of an expense in that the average renewal growth rate remains negative, and that is a concerning statistic, but it is improving. The success rate at 75% is also a marked improvement. Arrears is down for the period significantly. Our expense ratio ticked up a little bit to 33.5%, which to some extent, talks to the additional vacancy and the reduced rental in the portfolio. The asset valuations have come down by 1.7%, which indicates, I think that we, probably towards the end of the revaluation cycle from a negative perspective. The bulk of that lies in ZAR 1.5 billion negative revaluation of our office portfolio. And then as Norbert mentioned, we've sold some assets. We still continue to spend on our portfolio. We've spent ZAR 1.1 billion on the portfolio. We've still got commitments of ZAR 650 million in CapEx. And then we acquired the Student Accommodation Fund, which was the latest of the Growthpoint Investment Partners' initiatives. I think, hopefully, this is the last time that we'll probably include this slide, but I think the message here is to contextualize what COVID actually cost Growthpoint over the 3 years, just short of ZAR 800 million. It was probably one of the more successful stimulus packages that was injected into the South African economy. Straight up ZAR 0.5 billion of that was in discounts to larger and smaller retailers, as well as several of our clients in the office and industrial space. But you can see from the total impact in this year at ZAR 43-odd million that, that impact has now significantly reduced and hopefully will be eliminated entirely. In terms of our arrears, we've got -- that number has improved significantly, down to ZAR 195 million. So I think in the heyday normalized environment, pre COVID, the arrears would have hovered in and around just under ZAR 100-odd million. So it's still double that level, which speaks to still a pretty difficult economy out there for our clients. But certainly, these levels are starting to veer in the right diction, which is a reason for optimism. The income statement impact of bad debts was ZAR 24 million for the year. And the accrual accrued amount on balance sheet is ZAR 114 million for bad debts. So we are pretty well provided. We'll start with the good news first. On the industrial side of things, certainly, the metrics are looking particularly more positive. And I would argue that this sector is well on its way into a more normalized environment. So vacancies have reduced to 5.7%. We've seen very, very good letting in Natal and in the Cape where effectively, the portfolio is pretty much full now. And we don't have too much stock on the shelf to offer clients. So we'll be looking potentially in those markets at development or acquiring assets potentially even in those 2 markets. And then in Gauteng, if you strip out the structural vacancies, even here, the vacancy at 5.6% is at a reasonable level. And that will ultimately start driving rental levels. So you can see from the renewal growth rate there at 6.3% negative. Certainly, our view would be, over the next 12 months that we should see that number moving into positive territory because actually, on a national basis, vacancies industrial have dropped off quite significantly. And what is ironically quite helpful is that the inflation in construction cost has -- is assisting to some extent in that, if you had to now move out of your existing facility into a newly built facility, you probably have to step up 30% to 40% in terms of rental levels now. So that is going to provide some protection and some rental pressure in the market going forward. And certainly will help us on 2 million square meters of industrial space. Escalations remain under pressure. But I think that is also quite fluid. And given the inflationary numbers at the moment, I think there is a message into the business to see if we can start negotiating at higher escalation rates and arrears have reduced quite significantly. The like-for-like growth in the portfolio is at 3.7%, which is indicating it's moving in the right direction, quite an improvement on the prior period. And valuations have also started moving in the right direction. So the valuers still have quite a jaundiced view on the rental growth rates, but we're hoping that given the supply and demand dynamics in the specific sector that potentially those might improve over the next year. We have obviously taken advantage of the demand in the sector. Obviously, the sector is the darling of the real estate market globally for the past 2 years, 3 years, and we've managed to sell quite a few property -- noncore properties into the private client and user, the owner/occupier market in this space. So we've sold over just under short of ZAR 700 million worth of assets, and we've got a pipeline of assets that we are looking to dispose. Retail, not quite where industrial is yet, but certainly things are looking up a little bit. There vacancies have come down. And if you strip out offices down to 4.7%, we've got one single shopping center down in Wellington that's faced quite a lot of competition. And as a result, we've seen several of the larger nationals move out of this shopping center, leaving it with a 14% vacancy. So we are actively looking at solutions for that shopping center, potential redevelopment of it, and that will have a material impact on the vacancy levels. Our renewal success rate remains high. So demand is good. Many of the larger retailers have acquired smaller formats, and they're still rolling those out. And certainly, that has helped the demand side of things specifically. The larger retailers have been pretty -- I want to use the word hectic actually, on negotiating rental levels and certainly on renewals. But I think the growth in turnover per square meter in these shopping centers ultimately will start supporting renewal growth in the next probably 18 to 24 months. Escalations have also come under pressure given those dynamics, but arrears have improved quite significantly on the back of the stronger performance at the shopping centers. Like-for-like growth, unfortunately, still remains negative just given the dynamics on reversions. And then as I mentioned, the trading densities have increased by 8.6%. So that specific statistic is probably the most key statistic from our perspective in terms of the sort of view going forward. Because ultimately, if a retailer is trading particularly strong from a certain shop, then ultimately that determines what kind of rentals you can achieve. So we are seeing that, that will probably continue. I think there are a couple of headwinds that have potentially got a negative impact there. And I mean you're talking about higher interest rates, higher fuel cost inflation and energy inflation, and that will potentially dampen that. But we, at this stage, are still cautiously optimistic. Valuations were pretty much flat. And certainly from my humble perspective, not to damn our valuers, but certainly from our experience on the ground having sold ZAR 700 million worth of retail properties. I do -- I don’t know if you can compare our rates per square meter on our retail properties, I think there's still a bit of value on the table there that isn't reflective in the NAV and that is a function of the view on negative reversions by the valuer community. So if that changes, I think you might see quite an improvement in valuations as well. On the office side, look, things here are still reasonably tough, to be honest, and reasonably is probably an understatement. There are markets where things are significantly better. So if we look at Natal and the Western Cape, those 2 markets, I mean, Durban's vacancies are just below 7-odd percent. So I would say that would be a normalized level in office. In Cape Town, I think there's circa between 14% and 13% and varying in the right direction. So demand is reasonably strong. So our challenge does lie in the Sandton area, more specifically. And here, having sat in a little bit of traffic, I was reasonably jovial driving in here this morning, in that I do get the impression that many of our larger office users are starting to get their staff back. And I mean, clearly, Sandton is very dependent on the users in the financial services sector, as well as in the services sector. And I do think that the habit of coming into the office, Tuesdays to Thursdays and staying home Mondays to Fridays is probably not that sustainable. And from our perspective, we'll hope to see that the demand will improve slightly. What we are seeing is certainly some of the smaller tenants coming back into the market, and that will hopefully drive demand slightly. But it's tough out there. Our renewal success rate is still relatively low and the renewal growth rate is short of tragic, to be honest. So it's -- you can rent offices cheaper in Sandton today than you can in the CBD of Pretoria. So that doesn't bode well. But I think there is a bit of an oversupply situation in Sandton that's still working through the market. Obviously, the like-for-like growth with those dynamics is negative at 8.7%. The work-from-home aspect, I have touched on, I think, load shedding is in a way working in our favor. Many people don't have electricity at home. So they are coming back to the offices in these conditions. But on the other hand, they're reluctant, given the higher fuel prices, to drive into office if they're living very far. So I think it will potentially drive a bit of a hub-and-spoke scenario, demand in more regional areas might improve a little bit given those dynamics. The valuations remain on the negative at 5.4%, but it does look like things are slowing down there as well. And some of these valuations on offices now are reaching ZAR 5,000 a square meter, which is effectively just marginally higher than the bulk rate per square meter. Certainly, I think probably will offer upside over the medium to longer term. So it is something to keep our eye on. We've managed to sell to short of ZAR 0.5 billion worth of offices, mainly into the owner/occupier and private client markets. Liquidity in selling assets remains quite constrained. And certainly, the demand for office from investors is probably lower than some of the other sectors, given the demand dynamics at the moment. From an ESG perspective, certainly, we're making an impact on 9 of the specific sustainable development goals. With integrity, ethics, and our values guiding our governments. We provide space to thrive in environmentally sustainable buildings, while improving the social and material well-being of individuals and communities. So that ethos runs through in the business and has been for more than 10 years before ESG became a buzzword with the institutional market. Growthpoint's been working in the back room. I mean we already have 13.2 megawatts of solar power. And with the regulations being lifted, we're looking to double that in this year, which is quite an ambitious task, but hopefully, we'll get that executed. We have 71 buildings with certification at the moment. We have had 191 buildings certified over several years. We have a BE-Level 1 rating. And from an ethics point of view, we have established a Strategy and Ethics Committee. And we have given our close relationship with IFC, also policies and alignment with their performance standards. And we've done a gap analysis between growth points, environmental, social management system and that of the IFC performance standards. On the V&A, I think Norbert's already indicated that things are looking quite a bit better. So certainly, the income is pretty much close to the prior normal levels, if you'd like, pre COVID levels. Retail sales have been up to those levels, above 14%. Commercial office vacancies are remarkably at 1.8%. We've seen international visitors through the airport back at 75% of pre-COVID levels and climbing. So we're going into our holiday season. And certainly, there's a lot of optimism that those traveler numbers will increase significantly. And I think on top of that, we've seen local corporate travel come back into the market. On the financial side, net property income is 52% higher than prior period, and that was mainly as a reduction of the COVID measures that have reduced into the tenant base. And then our operating profit is 62% higher than FY '21. Successful -- the successful rates appeal, which I think we alluded to at half year, delivered a ZAR 77.5 million refund to our tenants and a ZAR 28 million benefit to the income statement there. And then collections were at 93-odd percent and that was certainly on average, currently, they're trading closer to 95-odd-percent. And visitor numbers have increased to -- by 32% and now are just short of 20% of those pre-COVID levels. So retail -- on the retail side, things are going really good. There's strong demand. Vacancies are miniscule. There is a bit of development space that we're still looking to let. Given the period that we've gone through, clearly, rental negotiations have been pretty tough. And even at the V&A, reversions are prevalent at more or less just under 10-odd percent. The majority of our tenants now are performing very, very well and above COVID levels, except for those that are still dependent on the tourist market. And then rental relief is pretty much out of the system to a major extent. And our rental levels that we are achieving are still significantly higher than the benchmarks of super regionals that are comparable. On the marine and industrial side, our tenants are trading normally there. In fact, the casual berthing and super yacht and the yacht building industry performed exceptionally well there, and we've seen a 32% increase there in the net property income. And then the cruise terminal, which has been mainly closed, given what's happened in the international sort of touring market will open in October, and it's set to have a pretty solid traffic going through there over the festive season. Offices, 60% of that, the office market in the V&A has led to absolutely top blue-chip tenants. And our vacancies are pretty much miniscule at 1.8%, as earlier mentioned. Construction is underway on the buildings for the -- for a Caltex service station redevelopment and also the Investec building, which is 10,000 square meters, of which they're going to be taking 7,700. And our hotels are at 81%. So I think I was listening to one of the CEOs of the large hotel groupings, with their results earlier in the week. And I think their occupancies went from 0 to 49% on average. So at 81%, certainly a significantly better position than what I would suggest the market is. And more importantly, the RevPARs that we've been able to achieve is at normalized levels. So even in the residential units, we've seen the vacancies drop there from 30-odd percent to 18%. Our Investment Partners business, so I will just briefly run through each one of the funds that we've got. The health care fund is -- has now got assets of ZAR 3.4 billion in value. We've raised ZAR 1.3 billion in external capital and are actively looking to raise more capital for the fund. We effectively, as Growthpoint have a shareholding of 55.9% in that fund. And we've successfully concluded the transaction with IFC, where they've basically signed a transaction for $80 million worth of convertible equity and debt facility. The Competition Commission submission is in on the Adcock Ingram head office, which is -- will be the latest acquisition. We're buying 50% of the Adcock Ingram head office in Midrand and warehouse facility. And then there is quite a healthy pipeline of opportunity for this fund. So to the extent we can raise capital, we certainly will be able to deploy it. The one large transaction that was concluded earlier in the year was also the acquisition of the Cintocare Hospital in Menlyn Maine in Pretoria and that was transferred in August of the year and at a cost of ZAR 515 million. And the best news of a lot is that the distribution grew at 7.5%, and that translated into ZAR 142 million distribution to Growthpoint. Lango is the fund that investors, north of our South African borders. That fund now has $613 million worth of assets in. It has an equity value of $323-odd million. And we've seen a distribution from the fund of ZAR 22.3 million. The fund is looking to raise capital at the moment, is quite well developed, those discussions. And it will use the funding that it raises to reduce its debt probably to the extent of about ZAR 50-odd million and then deploy into the Eastern African market. The further development has also been that we've had Circle Mall off-line for pretty much most of the year. It has been in redevelopment after the riots in Nigeria, and that mall will be opening in October this year. The newest fund is the Student Accommodation Fund. This fund has assets of ZAR 2.2 billion. It's focused, purpose-built student accommodation. It's creating raises effectively for the students. These properties are very, very well located. They also have in our JV with Feenstra Group have a very particular management style, which creates a community living feel. So anybody that went to university raised in the good old days, where there was a bit of spirit and this is all being created for these students. And as such, the occupancy levels in this fund is particularly high. We have raised ZAR 1.2 billion of external capital. Both Growthpoint and Feenstra, have equity stake or co-partners with the investors in this fund, and as a result, we've seen a dividend from that fund for the first period of ZAR 16.7 million, and we're targeting to grow that fund to ZAR 12 billion. On the capital management side, as Norbert said, I think he's covered the fact that we've got very, very deep liquidity in preparation for the refinance of our offshore bond. We have also raised funding, as mentioned for the Growthpoint Investment Partners funds. We raised ZAR 60 million convertible bond for the health care fund as mentioned. We had a bridging loan from Investec for ZAR 550 million. Now all these funds are obviously consolidated onto our balance sheet, the South African -- so the student accommodation and the health care fund are unlisted REITs and they are consolidated onto our balance sheet. So all those funding facilities will reflect in our debt balance of ZAR 39.2 million. The weighted average term of our debt has reduced to 2.9 years. But given the fact that ZAR 7 billion of that is the foreign bond that comes up in May, hopefully, in the following period, we'll be able to lengthen that maturity profile. And then our unsecured debt is at 54%. We did get an inaugural Fitch rating, which was 1 notch higher than the sovereign at BB plus, and we have a national scale rating from the AAA. And then Moody's have confirmed our rating at Ba2 and a national scale rating of A1 and with a stable outlook. The interest rate hedging is maintained at 83.9%, and that is at a weighted cost of debt of 8.1% in the South African context. And if you then add our foreign denominated debt and cross-currency swaps to that, it takes it down to 6.1%. We remain at conservative levels from a foreign debt exposure perspective. So GOZ is funded mainly with CCIRS. And actually, Capital & Regional has no debt against that, no pound debt and then Globalworth and Lango funded with the U.S. dollar bond. So I'm going to ask Norbert to just maybe return and finish the with the conclusion for you. Thank you very much.

Thank you very much, Estienne. I see it's 12:00 somebody who was kind enough to have their alarm on. So that means we're fresh out of time. Estienne used up all the time again, and now we're late. So no time to conclude and no time for questions. Thank you very much. Ladies and gents, I'm going to move through this last section very, very quickly. I think we've spoken a lot about the different aspects of the business. I think touching here on Growthpoint Australia, it's fair to say it's still a very core investment of ours. It is going to be a bit tougher in Aussie, especially with higher interest rates. So the company guided for lower FFO numbers for this FY '23 year, but they also gave guidance on the dividend. So the dividend is going to -- is $0.214 that they projected. It's about just short of 3% growth. And again, one has to obviously imply there -- or implied there is a higher payout ratio from the 75% this year to probably in the low 80s. Globalworth. I guess we're a bit concerned about the ongoing conflict in the area. Whilst to date, there hasn't really been any meaningful impact, we feel that as we're heading into winter and as Russia switched off the gas supply to Europe. Generally speaking, there's a lot more uncertainty in the area. And eventually, that should and would have a slightly -- or a more negative impact. But notwithstanding that, the business is sound. It's solid. It's got strong shareholders, financially sound shareholders, gearings under control, no short-term debt expiries. So we're still pretty -- we're confident with the region, to be honest with you, investing in that Eastern European region is still something that we believe in. If we look at our risk sort of and return metrics, we do believe that, that area still offers value. Capital & Regional has stabilized. It is probably a bit subscale at the moment. Market cap is only about GBP 100 million. We own 60% of that, just over 60% of that. Share price trading at a big discount, GBP 0.60 or GBP 0.58, GBP 0.59. NAV is about 118. So very difficult to go out and aggressively raise capital, whether that be debt or equity. So we're going to be strategizing around how one could scale that business up and what the various strategies for that business are. But we still firmly believe in the story and firmly believe in the management team. So we will continue to hold and support that business. South Africa, Estienne spoke at length about some of the challenges we've got here. Sadly, I mean, if you look at the last quarterly GDP number that came out 0.8% negative. It's certainly not good. I know retail numbers came out yesterday, which optically looked very good. But then, I was lucky enough to catch a little snippet on the radio last night, where an economist interpreted the number and said you got to take the base effects of July '21 into account, where obviously, we had the riots and we -- I think July on July was down x percent. And so there's actually still no good story on retail. So the SA dynamic remains challenging but having said that, our key metrics are all improving and all improved. Even if it's negative, it's now a little bit less negative. So we're feeling generally a lot better about the SA environment, but it's going to remain tough. Waterfront, we're hoping for another cracker of a year from the Waterfront. For 2.5 years, we haven't had any cruise liners come in into the -- into Cape Town. The cruise season starts now in October, with something like 150 confirmed cruise liner dockings. That's all positive. The sporting events, just this recent World Cup Sevens, the test against Wales, with the Sevens is also coming back again, the one in December. So a lot of sporting events. And we certainly -- you just got a sort of walk in the Waterfront to feel the energy, queues outside the red bus terminus and all sorts of. It's -- we really are confident about the Waterfront and its prospects. And then I guess, in conclusion, we're looking forward to guidance. I know everybody is looking for guidance on DPS and certainly dividend per share and distributable income per share. We do believe that we are sort of well positioned and defensively positioned. We've got some good strong hard currency earnings and the portfolio is well diversified. Having said that, I think everybody appreciates that the world is still a very, very uncertain place at the moment. And we've seen unprecedented inflation numbers around the world. Interest rate increases are continuing right across the globe. All of that creates a bit more uncertainty. So I think, in conclusion, I think we are projecting growth for next year, but we think that, that growth will be quite muted. And I think that concludes the formal part of the presentation. There are a number of questions online.

Before we go to the online ones, I'm going to just maybe reach out to the audience here, there is a roving mic. And if you will, please use the roving mic to ask your question considering I think all the people online would obviously also like to hear. So I've got a question over there. We'll go to the audience first.

Just 2 questions, guys. The first is, do you have an idea of what kind of discounts you guys are selling those 9 office assets at?

I'm sorry, did you say what was the discounts?

The discounts, yes and that's a…

I think they sold pretty much close to book value.

Book value. I don't think there's any…

Erosion in discount.

And then for any office raising conversions, what kind of offers are you getting there? And what would that kind of discount be.

Yes. So we obviously assess every single property for its optimal use, if you'd like. Not every property can be converted to residential. And I think the financial dynamics of converting to residential is quite significant. So if you're going to take our average valuation of value per square meter of our office portfolio, circa, I don't know, ZAR 12,000 to ZAR 13,000 a square meter for resi development to work, it has to be probably the highest it can be is at about ZAR 8,000 a square meter, whereas the most of the developers are looking to buy that at about ZAR 5,000 a square meter. So you have to write off just about 2/3 of the property's valuation. So we have one specific asset, which is in a residential node on the east side of Johannesburg and in Riverwoods, correct. And we've done a JV with a partner there, and we're trying to obtain certain presales before we will commence with that transaction.

And then the second question was on the SA side, there was a pretty big increase in your admin expenses of about 20%. Can you guys just break that down a bit?

Yes, I'll try and answer that. So I mean, obviously, the other operating expenses in totality has grown by, I think, it's circa 40%. There's a real mix there. SA 20-odd percent, as you point out. I've had a look at the details behind that. There's nothing -- not 1 number in particular that's driving that. Personnel costs, if you want, staff costs increased quite substantially. I think there was about a ZAR 40-odd million increase, order fee increases, CSI -- contribution to CSI increased. So there's a whole mix of expenses there that pushed that number up. In relation to Capital & Regional, there's also a very material increase in that particular line item for CapReg. There you got to look at the property expense line as well as the other operating expense line. So the property expense line came down by 10%. The other operating expense line went up, as it was more than double, but there was a mapping issue there with some expenses in the prior year. We're sitting in a different line compared to where they are this year. If you aggregate the 2 property expenses and other operating expenses combined for C&R actually just went up very marginal. And then GOZ, the GOZ number is also up by 20-odd percent, and that was pretty much linked to payroll and employment costs.

All right. Any other questions from the floor? I think I have asked guys maybe your thoughts [indiscernible] let's go to one or more. One of the first one on online.

Yes. So we've got an investor here that wants to know why are we so tight and not paying out a bit more distribution. So enquiring in terms of distribution payout ratio.

Is that you [ Beet ]? maybe online. Yes. So what about the payout ratio, I mean what are we going to go higher? I think growth point and Growthpoint's Board's view is that the old days, the good old days of 100% payout ratios are gone. We don't see ourselves ever getting back up to 100% payout ratios. We don't think it's a sustainable business model. When you've got CapEx and development, CapEx and maintenance, CapEx that you have to fund and that essentially, if you're paying out 100% of your earnings that means you have to go and borrow to -- and increase your gearing. So we're tried to find a sustainable level, where we can, "self-fund" those expenses. And we -- I think the short answer is that don't look for the 82% to go to 85% to go to 87% to go to 90%, it's not going to happen. So we're going to be at or around the 80% level, maybe a little bit higher, but we certainly aren't going up to 100%. I was going to say, ever again, but ever again is a very long time. So if you guys give us a share price at 20% above NAV. And if you tap the debt markets and the values go right up to -- right up to where they were and LTVs are at 25% or 30%, then we can talk. But until then no.

Question in the corner there. Off the floor.

[ Kabelo from Mazia ]. I just have 2 quick questions, 2 questions. Firstly, on your health care, sort of, fund asset management that business. Have you had discussions with the larger sort of health care providers, Netcare and Mediclinic and over taking over some of the existing assets and effectively, is that part of the pipeline? That's the first question. And then the second question, I mean, you mentioned [indiscernible] cheaper to rent in Sandton relative to your ex Sandton areas. So just thinking about that, I mean, is it a question of Sandton is cheap. The other areas are expensive and those would come down. The rentals will come down. Or is it the inverse where net-net Sandton, as vacancies improve, it will revert higher than the older areas. And in the interim, what's the key risk between the 2 dynamics?

Okay. I'll do the health care one. I think the short answer on the health care one is that we are scouring the entire market for opportunities. We're clearly aware of the, let's call them, the big 3 listed health care companies and the big portfolios that they own. We've had a number of engagements with them. Guys are not that keen, strategically, to dispose of assets. There might be the odd one that comes out of that portfolio. It's not core to our growth. You asked, is that part of the pipeline. It's not really in the pipeline. So outside of that, we are seeing good opportunity. In fact, many, many greenfields opportunities to develop and build new hospital properties. Problem is the risk associated with these new hospitals is quite high. And so -- and generally, the risk is in who's the operator. If you -- if the operator were to be one of the big 3, then I guess, it's a lower risk in terms of the financial, their ability to pay rent. These hospitals take 2 to 3 years before they become profitable. So the -- whomever the operator is, needs capital and access to capital to see them through the first 3 years of losses. And so, we're trying to always find a balance between how much risk we put in that fund versus how much, let's call it, stable income we have from good operators. So that I would say is the answer to that question.

And just on the office side, I think Sandton has got a unique dynamic. I don't think it will spill over into the other regions, if you'd like. I think the issue is that you've got significant oversupply here and the corporate, within this environment, are still rightsizing negatively. So albeit that you are starting to see smaller tenants come in. It's not really changing the letting dynamic. And as, let's call it, private investors or developers or even the listed sector get more desperate though the rentals continue to drop, right? And I think the only thing that is sort of a bit of a help is to develop news practically not feasible at all in this environment given the cost. So if a new corporate wants -- or a growing corporate wants a very nice shiny new head office to go and build a new one is going to cost them significantly more, probably ZAR 40,000, ZAR 45,000 square meter, whereas if they move into one of these that can actually get quite a nice deal. Okay. Then any other questions from the floor? Yes. So we've got a question here about the conglomerate discount embedded into Growthpoint. And there's a question, if we want to unbundle the company, break it apart, even -- or have we considered a separate question? Have we considered buybacks?

I'll answer that. I think certainly, I mean, this question of the discount is very much at the front of the mind of both management and the Board. In our strategy session in February this year, we did a lot of detailed analysis for the Board on ways to potentially unlock that discount. We also engaged the services of some investment banks in that regard. And it remains, I think, part of our overall evaluation. I think my personal conclusion from that entire exercise was that until such time as we see the South African portfolio and the South African dynamics turn positive, where you don't continuously have negative reversions, increasing vacancies. Cost-to-income ratio is rising, valuations under pressure, et cetera, until that dynamic changes, it's very difficult, I guess, for the -- for us as management to close that gap. The mere sale or unbundling of GOZ or the mere sale or unbundling of C&R or the Waterfront, to our mind, is not necessarily going to be the key driver of closing that discount. What remains, I think, will just trade at a sort of a bigger discount. Would be part of our analysis. But look, it's ongoing. We do have -- we are engaged with some consultants as well at the moment, looking at this, and it will receive the attention that it deserves. And I'll leave it at that.

On the share buyback, yes, I think clearly, trading at a 40% discount, you should be definitely looking at buying back our own shares. For us, it's always been a balance between that and our gearing. So if you've got 40% LTV and you don't want to go above 40%, then you shouldn't really be stretching your balance sheet. So balance sheet strength to our mind was -- has been overriding the ability to go back and buy back shares, which obviously, on the key metrics is positive. So it's helpful for dips per share and earnings per share and all that kind of stuff. But for -- given the environment that we've been in, we've prioritized balance sheet over necessarily driving the extra couple of cents you can maybe get on the dips.

Estienne, I just wanted to check back, Paul Kollenberg has got a comment that could be on that office question. Can we just open it up to Paul, please.

Please, Paul.

Paul is in London.

London.

Sorry, can you hear me.

We can.

Yes, we can.

Right. Sorry, I wanted to just circle back to the question on Sandton. Because Sandton has a wide range of properties and a wide range of locations. So when you say that Sandton is cheap, there are certainly areas in Sandton where you can get great bargains. But we are seeing demand for the better buildings, for the green buildings and the buildings in the right location. So I don't want to tarnish Sandton with one brush at the moment, but certainly you've got to have the right building and the right location.

Thanks, Paul.

Thanks, Paul. I think, I mean, that message is probably consistent in that actually, the demand from tenants more amenity and they're very focused on ESG credentials. And again, that the properties have to be more efficient and certainly more green is definitely a theme. And I've got a question here. Cap & Reg, this business seems to have a great competent management team and good focus, needs-based retail, but the company seems subscale. Do you have any views in this regard? And will the business require capital to scale?

I think I've already answered that in the earlier statements, I made around CapReg. And I mean, in short, we remain supportive of the business and the management team. So I think…

And there was a question here as to what did we pay for our investment in GOZ and what's its value now? I think we paid $900 million.

GOZ is a -- it is somewhere in the slides. It's ZAR 9 billion and it's worth ZAR 18 billion.

Yes, that's right. Okay. Then what are your -- okay, we did this share buyback thing, NAV. Okay. What are your plans with GWI. Pull the stake -- are you still on the Board?

Yes, still on the Board. So look, when we structured that transaction, we were very careful to protect ourselves as best we can, even as a minority. And so we've got entrenched rights in the MOI in terms of board representation and all sorts of things. So we're pretty comfortable with all of that. I mean the fact of the matter is you've got 4 shareholders, owning 95% of the shares. It doesn't trade. It's -- the people always refer to the share price, but it's completely and utterly meaningless. It's EUR 4.20, NAV is EUR 8.60. We just saw valuations come through on Globalworth for the half year. The valuations were up. So it's -- and in fact, not only Globalworth, I'm aware of Around Town, which is obviously one of the big shareholders in the controlling consortium. Their own valuations were also up. So there's a massive disconnect between the listed market and the direct market. And I guess what I can say is that I think all the shareholders realize that it's suboptimal to -- the current situation is suboptimal and that we'll work together with them and there's a good dialog with them. Work together with them to try and find a solution that suits all parties.

Then there's a question around the telecoms investments that we've been making. So obviously, we've been buying a couple of telecom towers, and those actually proved to be very, very good investments for us. It's still very, very small. So over time, it might be something that we'll scale up. But if we're ready to say something more about it, then we will in the future. How sustainable is the Trading & Development.

So just on that is, I think just -- it's odd to just buy a couple of cellphone towers. It is strategically part of our thinking on funds management and creating new funds and, let's call it, property investment in the Property Investment partners strategy.

Good. You already said too much.

No.

Right. So Trading & Development, how sustainable is that income. So it would be my view that, that business has a very, very good skill sets and that the -- we've always sort of communicated to the market that the idea is that, that business will contribute between ZAR 100 million and ZAR 200 million per year, clearly being quite a lumpy fee generative kind of business. You can't always time it perfectly from that perspective. But we believe it's very, very sustainable. And their largest client is, in fact, Growthpoint. So they do refurbish our buildings and work on optimizing the capital employed in these buildings. And then they're also open for business to third-party clients. So they can develop pretty much anything, from a hospital to a warehouse, for any third party, on a bespoke basis for fees. And here and there, where it makes sense, we do a Trading & Development sort of deal, where we trade in the specific assets for profit. We have limited the amount of capital that we have exposure to that type of activity to below ZAR 1 billion. Then do you have any sense of whether the negative reversions will continue to be double-digit over the foreseeable future. So I think in -- I think I did kind of give a view on retail and industrial that I believe between 12 to 18 months, certainly, in the industrial side, I mean, industrial is already single digit, and I think that will eliminate and become positive. Retail might just take a little bit longer just given that dynamic. But office, it's quite difficult to really understand. I think I can ask a question back, is do know when -- if you know when the South African economy is going to grow materially, then I'll give you an answer to that question. So it is very -- the office business is particularly linked to the South African economy. GOZ is buying back shares is your stake therefore increasing?

Yes.

Okay. And that's the question. So I think there was one other…

Any more from the floor.

Just comes at a time when we ready to take [indiscernible]. I think just looking at around doesn't look like there's anything else on the floor, anything more online? So yes, ladies and gents, thank you very much for your attendance today and your time. We really appreciate your support. We will be here for another hour or so and a big chunk of our management team are here as well. So if you want any detailed questions on a asset -- a specific asset, or a particular sector of the business, please feel free to hang around and join us for a drink and something to eat. Thank you very much for your time. Appreciate it.