Redefine Properties Limited (RDF) Earnings Call Transcript & Summary

Good afternoon, everyone. My name is Anelisa. I am the chief sustainability officer of Redefine Properties. Thank you very much for joining us for our ESG annual investor presentation. Now my job today is to give you an overview of our ESG strategy as it currently stands. But so much more importantly, I'm also going to talk you through the implementation journey that we have undertaken, especially in FY 2023 and where we feel that, that is going to lead us as a business. So first things first, let's do some housekeeping. There is a Q&A function. Please do use it. And I will make sure that towards the end of the presentation, there's plenty of time for me to answer any questions that come from the floor. What you'll also be receiving tomorrow is, obviously, a thank you note as well as a short survey for us to really start to understand what you as investors expect from us from an ESG perspective in the long term as well as what other views you may have regarding the integration of ESG when it comes to the real estate sector as a whole. So I do encourage you to please participate in those insights are always very valuable to us. So let's talk about today's proceedings. We're going to start with an overview of the strategy as well as some of the key wins and the key challenges that we're currently experiencing. We'll then cross over to the environmental section where you'll see that as much as our solar PV is one of the key elements of our strategy, we really have quite a few initiatives on the go and making real progress. We'll then go to the social side of ESG wherein we will explain to you how stakehold engagement is really aiding the scaling up of our ESG initiatives across the board. And then lastly, we'll talk about governance and really focusing on ESG governance, our sustainable finance facilities and our framework as well as the target setting process that we have undertaken, which I think has really made strides since FY 2021 when we first introduced our own clear ESG targets. Then I will quickly close the presentation, and then we'll go into Q&A. So let's start with an overview. We really are focused on scaling up our ESG initiatives. And ultimately, the point is to create demonstrable value, both for ourselves and for our key stakeholders as well as to manage many of the sustainability-related risks and opportunities that face us as a business. So both Redefine and EPP are required to have long-term ESG strategies in place. And obviously, those strategies are quite sensitive to the risks and opportunities that we face in each region. In terms of our operational control boundary, we still apply our ESG strategy to all properties under our operational control. But we're certainly doing a lot of work, especially during this current financial year to start bringing in outside managed properties and making sure that from an ESG perspective, they really are living our key priorities. And as much as I've said it before, I think it's worth just reemphasizing. We really focus on embedding ESG into every critical stage of the life cycle of our properties. And that, I think, is one of the elements that sets us apart. So right from development phase, right through to the management phase of outstanding investments and eventually to the recovery or disposal phase, the point of our investment strategy when it comes to ESG is to make sure that ESG considerations are not just treated as a box-ticking exercise, but are actively incorporated into the overall investment decision-making process as well as into the nuts and bolts of how exactly we manage our assets on a day-to-day basis. So maybe just quickly touching on our overarching values. Our purpose is to create and manage spaces in a way that transforms lives. And that is why so many of our targets are really focused more on impacts than they are on inputs, which I think can sometimes have mixed results. But I think once we start focusing on outcomes and long-term impacts, we really know that the initiatives that we have are going to create sustainable value for our stakeholders. And you'll see as well, our vision is to be the leading South African REIT. I think as we go through the presentation, you will see that the evidence speaks for itself when it comes to ESG. And our mission in this decade is to deliver the smartest and most sustainable spaces the world has ever known. And even though it is going to take quite a bit of time and a massive amount of effort, I think we've made substantive progress in terms of getting to that over our 2050 goal by really focusing on tangible implementation in 2023 and going forward. And obviously, of course, our values really hold us together. And I think in order for us to really implement the ESG strategy, it's important for us to live those values in terms of how we reach our decisions and how we execute them as well. So just to give you a quick recap. These are our moonshot pathways, which are now part of our mission statement. And ESG, although on the face of it, it falls within being a catalyst for good, it's worth noting that all of these different pathways are necessary for us to really achieve our ESG strategy. So for example, we don't spend much of a chance of improving the ESG governance of our data processes without mobilizing digital transformation. And as I made clear as we go along, there is no chance of us actually being able to achieve the UN SDGs if we don't nurture and optimize our ecosystems and really bring our key stakeholders into our ESG journey. And you just see here, we have actually embedded the UN SDGs and our approach to the UN SDGs within our moonshot pathways, which I think is market-leading. So from a stakeholder engagement perspective, this is our updated stakeholder matrix. And obviously, this matrix is situational, depending on the nature of the relationship we have with a particular stakeholder. But it's worth noting as well that even though it will take time to embed. A lot of the content that you're going to see over the course of this presentation speaks directly to value that we have created for one or more of the stakeholders in this matrix, and we are able to prove that now tangibly, which I think we're quite proud of. And EPP, I think, is also on the journey with us to make sure that, that stakeholder engagement strategy is really focused on the effectiveness of those relationships going forward. So this is just an overview of our UN SDGs. Nothing really has changed since 2022. And even when we are setting targets around our sustainability strategy. We take great pains to make sure that those targets are specifically aimed towards helping to achieve one or more of the UN SDGs. They're not just a throwaway element or paragraph in our strategy. They really underpin how exactly we measure progress and determine our impact. Similarly, EPP has also got set of SDGs that it has determined through a materiality analysis, which really takes into account the operating conditions within Poland as well. So it's not all roses as much as we've got to opt for the upside. There are several key challenges that we're facing in terms of implementing the strategy. I think from an environmental perspective, I don't need to tell all of you the impact of load shedding. But even from an environmental perspective, obviously, business continuity in our context comes first, and we are forced to burn diesel generators in order to keep the lights on, especially when load shedding intensifies. And that is unfortunately having quite a negative impact on our Scope 1 carbon emissions. But similarly, I think we are also driving significant progress in terms of the reduction of our Scope 2 emissions, as I'll explain later on. Wheeling of renewable energy, I think, is one of the the key drivers in terms of actually helping us unlock the opportunities within a low-carbon economy. But the reality of the situation is most local municipalities prohibited. And that's why we're so proud to have been included in the city of Cape Town's willing pilot, and that solar PV plant on Massmart Brackengate will come online in the coming months. I think there's a lot that has been said on energy, but there's quite a lot that needs to be said on water and the fact that the supply and the security of our water going forward, I think it's going to become very precarious. And that is why it's so important for us to make sure that sufficient resources are devoted to making sure that we have enough access to water, and we can ensure that our tenants can continue to trade during water outages, which unfortunately are becoming increasingly frequent. From a social perspective, a lot has been said about the socioeconomic instability that's currently caused by poverty and inequality in South Africa. But I think there's a lot to be said around the fact that it provides us an opportunity to really make sure that our properties are embedded within the communities that surround those properties, and actually, that enable the success of those properties in the long term. And from a social and governance perspective, and this is why I'm hoping that, that survey tomorrow is going to help. There still seems to be quite a bit of divergence in terms of how investors and funders approach ESG as well as ESG integration into key investment decisions. And similarly, I think what we're seeing in the EU is that the financial institutions are really expecting a large amount of focus to be placed on decarbonization strategies at an asset level. And that's also driven by the EU taxonomy. So EPP has published its inaugural climate risk report which went out a couple of months ago. And you'll see that in response to those pressures, each and every property's climate risks are actually mapped out in quite a bit of detail. Lastly, I think as much as -- has been a convergence on sustainability-related key concepts internationally, they're still in some area of ambiguity. Ultimately, there are certain questions that need to be answered. And I think a lot of issuers, including ourselves, are really going to have to grapple with how exactly they quantify the sustainability-related risks and opportunities facing the portfolio in a manner envisaged with frameworks and standards such as the ISSB IFRS S1 and S2 standards. But look, let's go to what we've achieved so far. And I think it's important to contextualize this in light of what I've just said. Now we've got our top green-rated assets in SA and EPP, and we are incredibly proud to celebrate the fact that 3 of those assets have achieved a net zero carbon level 2 certification based on the operational performance of those assets. But even if you look at the percentage of the portfolio in South Africa, EPP and ELI that are covered by Green Star or BREEAM certifications, respectively. We really have improved the coverage of our certifications, which really shows that these green principles for us are not just talk. They are being embedded, and we are holding ourselves accountable against those best practice principles and I'm very excited to also present to you our energy sourced from renewables. And it's so interesting to look at the journey here where in FY 2020, 6% of our total energy consumption was made up of consumption of renewables, whereas with the city of Cape Town winning pilot and the other winning arrangements that we have in place, by FY 2025, that number is going to be sitting at 22.5%. And what's even more exciting is that, that number is conservative because it's based on our current energy consumption. As we improve the energy efficiency of our buildings, the relative consumption of renewables is actually going to increase even further. So let's quickly talk about the business case for ESG. And you'll start seeing some of these principles play out in the slides to follow. But I think when it comes to yielding projects, we are starting to see real cost savings come out for ourselves and for our tenants. But ultimately, they will depend on the utility arrangement within the building concerned. And ultimately, even when you're looking at office spaces, we are seeing very encouraging evidence of international tenants and brokers actually prioritizing green star-rated offices. And similarly, and I'll talk more about green leases as well. But when it comes to social projects, what is quite positive is that as much as they help us mitigate some of the socioeconomic risks that our properties face, it's so encouraging to see tenants start to get involved and start to show an increase in interest in some of those socioeconomic development projects. And we're going to be talking about that later. And from a governance perspective, I think the efforts that we've put in to improve the governance of our ESG strategy has allowed us to continue to participate and remain relevant in sustainable finance markets as well as to measure and monitor our ESG KPIs. So let's turn over to environmental and start at the beginning. This is just an overview of our carbon footprint in South Africa and in EPP respectively for FY 2022. Our FY 2023, respective carbon footprints are currently being prepared. But you'll see here, especially if you compare to previous years, Scope 1 emissions have gone up because of diesel consumption in the generators. But what's quite interesting is that our Scope 3 emissions have actually decreased, that Scope 3 emissions to remind you, are primarily made up of electricity consumed within tenanted spaces. From an EPP perspective, if you actually track the journey there since 2019, which is their baseline for determining their ESG performance, their carbon footprint has actually been reduced by about 24%, and that has been achieved primarily through efficiency-based interventions, which is really encouraging, and I think it sets a blueprint for both of our portfolios to really start decarbonizing in the future. So from a physical risk perspective, the first before I get deep into the jargon, let me helpfully explain the different concepts. So your physical climate risks are the risks of storms and flooding extreme weather events, but they also include more long-term risks such as droughts for example, which have already hit several parts of our country. The transition risks on the other hand, are really focused on the risks of the transfer or the transformation of the South African economy into a low-carbon economy. So changes in market sentiment changes in regulation, changes in the requirements from financial institutions, all do pose a risk if we do not adequately anticipate and manage them. And that's why I think going back to physical risks, the fact that we've actually mapped out for South Africa and EPP, an asset-by-asset assessment of the different exposures, the different climate risks really puts us in a very strong position. Because now going forward, we are able to also apply that same methodology to any assets that we may include into the portfolio and similarly start to manage some of the transition risks associated with that, such as through insurance. So ultimately, I think it is going to fall up to us to make sure that from a design perspective, our assets are strong enough to withstand the increasing frequency and severity of these extreme climate events and ultimately continue to trade no matter what may come next. From a net zero perspective, I mean, we've mapped this out. We actually started mapping this out back in 2021, if you recall. And I'm proud to actually show you the amount of progress that we've made and how this kind of journey has really developed because we've actually just completed a complete net zero strategy, which very clearly maps out how exactly we are going to approach net zero throughout our operations which I think is going to be very useful even when it comes to decisions around budgets and the selection of appropriate environmental projects. And it's worth noting, I think this pathway here is aligned with international best practice. And why that's important is that there are already several local regulations as well as, of course, the EU taxonomy in Europe that are already starting to show that a lot of these principles you see on the screen are going to become regulated. Our assets, for example, most of them are located in local municipalities that are signatories to the C40 Cities initiative, which is a global initiative whereby municipalities actually commit towards mid-zero by 2050 for all of the assets within their boundaries. So ultimately, this positions us quite well to make sure that we can actually take advantage of that as opposed to being on the back foot when eventually these regulations come to pause. And this just gives you an overview of our long-term environmental strategy. We have incorporated energy, water, waste and climate-ready design. And I think it's worth noting here that some of the things that we've put on the screen are going to be hopefully achievable by 2050, but some of them are going to be extremely stretching and difficult to maintain. Getting a building to 60-kilowatt hours per square meter of energy intensity is incredibly difficult especially given how large the building is, how dense the building is, et cetera. And it's worth noting as well that some of these targets are not confined to landlord controlled common areas. They also incorporate the entire building, which includes the tenanted spaces. And that's why it's so important for our tenants to follow us on the journey because listen, I can go out and order LED lighting for the entire portfolio. And actually, we've covered most of the common areas in retail and office with LED lighting. But ultimately, if our tenants are going to leave the light on, or if our tenants are not going to manage the [indiscernible] and commit to those good behaviors, a lot of that good work can become undone. And by the way, I say that about tenants, but it applies equally to us as landlord. So a lot of these ambitions are going to be heavily influenced by the behavior of ourselves as well as our key stakeholders. So let's talk about energy management. I think there a lot has been said, and I don't think we're going to stop talking about our renewable energy strategy. And we've got about 40 megawatts of renewable energy currently installed with more to come. And it's worth noting here that this is just the energy that has been installed on rooftops. More can be done once the wheeling arrangements we already have in place come on board, and once the municipalities start to accommodate us from a regulatory perspective so that we can actually start incorporating off-site renewable energy sources. But renewable energy is part of the story. The other part of the story is obviously diesel, which I mentioned earlier, as well as energy efficiency. And it's worth noting your building ultimately is going -- any interventions you introduce in terms of renewables, et cetera, is ultimately going to be influenced by the building's energy demand. You optimize the energy demand, you can get more out of your renewables. And that's why I think from an efficiency perspective, this is just an example. We actually introduced a set point temperature adjustment to the air conditioning facilities in about 12 office and retail buildings. This was about 3 months ago. We're already seeing an average cumulative projected monthly reduction of ZAR 5.8 billion in the cost of electricity across those buildings. And this is what we're trying to achieve because that didn't cost us any money. That was simply something that we influenced through behavior. But enough for me, we're going to transition over to a video from my colleague, Victor Mathey. He is our sustainability project manager and he is going to talk to you a bit more around our energy management strategy. What is Redefine's current approach towards energy management.

Redefine's ESG framework is based on the UN SDGs, and we've set clear targets to reach by 2030. UN SDG 13 is applicable here as it requires urgent action to combat climate change and its impacts. The aim is to reach net zero, which requires a two-pronged approach to energy management, firstly, improving energy efficiency and also increasing our generation of renewable energy through rooftop solar PV plant.

And how is Redefine really focusing on and improving its energy efficiency.

At present, we're prioritizing efficiency interventions that are relatively capitalized as of December 2022, emissions associated with electricity sold to tenants amounted to 92% of our total emissions. We've thus started introducing smart metering solutions to provide tenants real-time data on how they are using energy. Currently, we've got over 5,000 smart meters installed in the portfolio. And these meters help the tenants manage their usage, which translates into lower bills for them and a smaller carbon footprint overall. We've also embraced LED lighting solutions as they're typically 50% more energy efficient than their fluorescent counterparts. We've installed over 45,000 LED light bulbs over the last 2 financial years, saving 11.8 megawatt hours of electricity annually. Through energy efficiency assessments, we investigate lighting, heating, ventilation and air conditioning as well as IT equipment such as smart building interventions. It's crucial that the energy management process be based on clear assessments. This will help us determine renewable or energy storage opportunities to further explore.

That's very insightful. But Renewable energy is obviously a very hot topic at the moment. Could you tell us a little bit more about redefines solar PV, strategy and footprint?

Sure. With the reality of load shedding in South Africa, our solar PV plants are crucial to fulfilling our ESG commitments and creating value for our stakeholders. We have achieved one of the largest solar PV rollouts in the South African REIT sector. Our current solar generation capacity is 31.9 megawatt peak, which meets roughly 7% of our electricity demand and there's currently an expansion project underway of 12.9 megawatt peak worth ZAR 142.5 million.

And obviously, with this discussion comes a lot of opportunities. Where do you see further opportunities for Redefine to expand its solar PV footprint in its portfolio?

We are excited about opportunities for wheeling as provided by the city of Cape Town pilot project. And this -- and what this would mean for future renewable energy projects in our spaces not just in the city of Cape Town but in other municipal areas as well.

So I would go so far as to say that renewable energy with solar PV is the flavor of the year, but batteries really seem to be the flavor of the month. Could you tell us about Redefine's approach towards battery integration when it comes to its overall energy management strategy?

Battery storage is currently the buzzword in the South African energy markets or energy sector. It's stopping solar PV, I would think, at this point in time. Unfortunately, purchasing batteries as a substitute for diesel generators is expensive and they require extensive storage space. With us need to determine whether they will be installed solely to address load shedding or whether we can create long-term value for our stakeholders through the installation of batteries. Installing batteries purely to alleviate the effects of load shedding requires that we make assumptions around the average load shedding we will experience. Should the load-shedding issue be resolved, the batteries may then become largely obsolete. Luckily, there are other opportunities for battery use. At Kwena Square, for example, we have installed batteries during the development of that asset. The battery systems picked for that installation was purely to assist us to free up some capacity during peak times because the grid in the area is quite constrained. The battery system is integrated with a solar PV plant as well as the generator, which allows some reduction in cost -- on diesel cost for that specific asset. Other opportunities that exist around battery technology is energy arbitrage, where you can charge batteries in off-peak time slots where energy is cheaper and discharge batteries in peak time slots when energy is more expensive. So that allows for a cost offset or a reduction in the cost for energy in peak times. So you're substituting expensive energy with cheap energy. That makes sense. Another opportunity is for peak shaving, where you can discharge batteries in your peak usage period to alleviate the draw from the grid during that peak time.

Well, I hope you enjoyed that video. And Victor really has an amazing way of explaining very complex concepts in quite a simple and straightforward manner. So let's talk about our water strategy. I think once again, going back to that net zero example, our focus really is on looking at the efficiency of our buildings from a water consumption perspective. And that's why in addition to rolling out smart water meters across the portfolio, we've also looked at the installation of Propelair toilets, which are water-efficient toilets that reduce your average water consumed per flash from about 9 liters of flush down to 1.5 liters of flush. And what is quite useful is that we've seen a cumulative projected annual savings of about ZAR 2.4 million across 21 office and retail properties where we've installed these toilets. And bear in mind, of course, we only started that process in July of 2022. But it's worth a note of caution that the anticipated savings from these toilets ultimately are going to be influenced by on-site behavior. Such as, for example, responsible leak detection and responsible water consumption practices on site. And that is why for us from an efficiency perspective, it has to be a combination of water-efficient technologies as well as responsible behavior. And I just wanted to include a case study here. This is from the Golden Walk Shopping Center. To give you an idea, Golden Walk used to be the seventh biggest water consumer in our carbon footprint back in FY 2021. We installed about 64 toilets in July of 2022, and we incorporated training and awareness for the occupants as well as for the visitors of Golden Walk as part and parcel of the installation, as opposed to sort of installing them and hoping for the best later on. Worth noting as well that despite appearances, the toilet is actually harder to break than your normal toilets. And to really close the loop, even the leftover units that we have, we are in the process of donating those to schools and charities in need. And that is where, for me, the environmental and social side of the ESG strategy really managed to crossover. So our annual water consumption decreased by about 59% on average, and that resulted in an average saving of approximately ZAR 900,000 since installation as well as, of course, other water efficiency initiatives and responsible behavior interventions at Golden Walk. And it's estimated now that, that installation is going to increase the value of this asset by over ZAR 10 million and will contribute towards the growth in asset value. And that really is the kind of success story that we're looking for here. We're not just going to throw CapEx at projects, but we really want to see where we can show demonstrable value, either in a reduction in the resources used by the particular property [indiscernible] resource or in reduction, I mean in costs as well. So let's talk about waste management, which tends to be a little bit forgotten in means through ESG conversations. But I think it is critically important to make sure that from a waste management perspective, we understand that in the ordinary course of events, when your municipalities collect garbage, they don't tell you the waste streams within your property. They don't recycle any of it. It goes straight to landfill and a lot of landfills in urban areas, as you probably know, are overwhelmed. And that is why we've actually commenced a waste rationalization project within the portfolio, covering 90 properties in Phase I, which is complete. And the purpose there is to make sure that we have waste service providers that can provide us with accurate real-time recycling data on our properties and that they can actually help us sort and weigh the different types of waste on-site to make sure that our waste statistics are as accurate as possible. And what I'm proud to show you here is that the recycling rate has actually increased by 9% since the rationalization. And we've actually introduced targets at a per building level. But the actual cost of waste per square meter has actually decreased from $0.89 per square meter to $0.76 per square meter which is very promising, and that's why especially in the next financial year, we really are going to be improving more the coverage, I mean, of our waste management initiatives in the portfolio to really maximize impact. And lastly, all of these initiatives really contribute towards our green building program. And you'll see some of the statistics that I showed you earlier, but have a look at this specific graph, where back in FY 2017 the total number of certifications were sitting at just above 40 certifications. And as of 4 weeks ago, we are sitting on about 186 active certifications. Most of them are comprised of existing building performance certifications. And what that means is that we constantly look at the operational performance of our green buildings every 3 years as opposed to doing a one-off design level rating, which doesn't need to be measured constantly. So ultimately, even when you're talking about smart buildings, our smart building strategy and journey is going to be essential for us to operationalize some of these green building principles and monitor data in real time. And we feel that this is a critical part of our net zero journey going forward. So let's go to social. And let me start off by saying when it comes to our social strategy, it's what I said earlier, and I'll say it again, our stakeholder engagement strategy is absolutely critical to our ability to execute this ESG strategy in any meaningful way. And you'll see that in the slides to come, that for each of the upstream and the main upstream and downstream, actual stakeholders, we have a clear target set approach as well as a clear engagement approach when it comes to embedding those relationships. And it's not just on environmental behavior, although I've talked about that a lot. It's also about our social economic development initiatives. If you think about it, every large corporate, you can think of, probably has some kind of CSI strategy in place, and they devote certain resources to it. But because we being SA Inc. are not working together enough on these initiatives, collectively, we're not actually moving the needle as much as we should. And that is why the importance of collaboration and developing these ecosystems is important even from a socioeconomic development perspective. So let's talk about our strategic approach to stakeholder management. Obviously, I think how we manage those stakeholder relationships is going to be nurtured, of course, by the relationships that we build with key players within our stakeholding universe. And ultimately, we rely on all of our employees to carry that journey through. But if you have a look as well, I think we're going to move towards a process whereby we're constantly measuring via surveys or via Net Promoter Scores, the quality and more importantly, the effectiveness of those stakeholder strategies and using that information strategically to make sure that those relationships and the effectiveness thereof is improved over time. And when it comes to impact as well. I think a lot of these discussions around the social side of ESG tend to be focused on inputs once again, and less on outputs or impacts, and that's why this -- we have actually designed an internal impact framework that actually sets out a vision of transformational impact that's aligned to our mission as well as our purpose, which is to transform lives. So going forward, our BEE strategy is going to be included in that impact framework. But what is important there is that we are not just going to follow a scorecard approach for the sake of getting BEE points. We're actually going to look across the business at the different initiatives we have, start seeing how we can marry the BEE score card as well as the initiatives and the outcomes of those initiatives and start seeing how we can use a BEE score card approach to our advantage to measure and scale up our transformational initiatives across our stakeholder base. So let's talk about communities. I think once again, we've moved away from a simple CSI approach to really making an impact. And when I say making an impact, it's also about how we engage with our communities. I think the mistake that a lot of corporates can sometimes make is talking at communities as opposed to talking to communities. And that is why our community engagement process is so critical and why we are continuously working at it at each stage of the life cycle of our properties. So right from when we develop an asset and go into design, planning and construction through to when we are actually operating an asset, it's important for us to really understand how those assets influence the local community. And what is notable as well is that even when you're looking at Green Star, yes, a lot of the criteria in Green Star are green and focus on energy, water and waste. But they also look at the walkability score of our properties. How close are our properties located to public transport facilities? Do they have cycling racks so that people can cycle to work? Do they facilitate, for example, ridesharing amongst the occupants of the buildings. And that really just focus -- helps focus the mind in terms of making sure that our assets in terms of the design of those assets are integrated into the community and take into account the needs of the community. And some of these findings you see here in terms of the -- for every Rand investment and every Euro invested, you've seen before, we published it in our 2022 ESG report. But it's really worth noting that we've really gone to the point where we are actually measuring the economic impact and the impact that our business has, our assets have on job creation in this country. And that is something that we feel very passionate about and we feel that similarly, other companies should start doing as well. And then we move over to tenants. Now I think here as well, it's worth noting that our tenant engagement strategy has really become far more focused. We've engaged with a number of our national retailers in South Africa, and EPP is actively engaging with its tenants to improve its energy performance. But if you have a look at the portion of our top 10 properties or top 10 tenants at least within our portfolio that we've engaged with, it's clear that we really are trying to engage with the -- with the tenants who can really move the needle. And we're trying to engage with them at a corporate level. Because, ultimately, it's important for us to engage at a store level, and we're doing that, too. But if you don't have that push coming internally within tenant structures to actually start behaving more responsibly, it becomes quite difficult to implement your strategy. So as a great example of how we've managed to turn this into a real success, we're now going to play you a video with Janice Cheadle. She is the ESG Director and Company Secretary at Mr Price. And she's going to talk to us a little bit about how we have actually managed to integrate Mr Price and Redefine's ESG strategies. [Presentation]

Thank you so much, Janis, for joining me today.

It's such a pleasure.

So Janice, can you tell me more about the Mr Price Foundation and the HandPicked program?

Sure. So we established Mr Price Foundation in 2005. And through the foundation, we take on the greatest needs facing South African youth by unlocking access to quality education and skill development. And our aim really is to empower youth to achieve their full potential. Mr Price Foundation is also a key part of how we achieve our social initiatives for our sustainability strategy. HandPicked is a program for the Mr Press Foundation and is a skills development program that cultivates youth entreprenurship in agriculture. It equips in terms of the knowledge, experience and tools they need to establish growing hubs or to pursue careers in every business. It also enables the shift from consumers to producers, stimulates local economies through generating income and boost sustainable food production.

This is such an amazing initiative. And could you talk about the scalability of the HandPicked Program in the context of commercial retail buildings?

HandPicked has the potential to become a national beacon of hope with the right partners in place providing space, sponsorship and onsite grocers and customers to buy the fresh produce. So partnering with our commercial retail landlords is imperative to grow the region impact of the HandPicked program.

And I guess that's where Redefine comes in. And it's been such a pleasure partnering with HandPicked to establish the HandPicked city farms initiative at Kenilworth Center. Now could you share with us some insights on how this partnership has really opened up new possibilities for HandPicked?

Sure. So Redefine has one of our biggest landlords really is in the ideal position to influence key suppliers and offtakers of the produce that's grown. So another exciting development is that it's enabled the potential expansion of the HandPicked for the farm at Kenilworth Center. So Phase 2, we're aiming to increase the number of plants grown from around 5,500 to over 10,500.

And that's such an impressive feat -- so how do you see the partnership between Redefine and Mr Price going forward in terms of our mutual ESG strategies?