Spear Reit Limited (SEA) Earnings Call Transcript & Summary

Good morning, again, everyone. Thank you for joining Spear's Half year 2024 Interim Results Presentation. It's again such an honor and a privilege for us to be here today and to share with you what we've been doing over the last 6 months and also to consistently reward our shareholders. Also a warm welcome to those that have logged on via the Spear YouTube channel. Now I know I'm sure you'll agree it's already Tuesday, but I'm still trying to normalize my nerves of the Saturday. The box really pulling a lastminute.com win over the English. And from all of us at Spear, we want to just also wish the Springboks all the best for the weekend ahead, and that will thumb the All Blacks and bring Bullhome. As I said, it's a privilege for us. We consider operating and managing this business not just as a management team, but also as owners of this business. And the first half of this year has certainly tested us on many fronts. It's required us to really elevate our hands-on asset management approach to the core portfolio. And maybe just in summary, Spear still remains the only regionally focused REIT listed on the JSE. We obtain our specialization through exclusively investing into the Western Cape. We invest across high-quality industrial, commercial, retail and next use assets. And one thing that's always stood out since inception is that we've operated with an extremely high occupancy rate and as a result of our proximity to our assets being excellent and also the management team having an acute understanding of the operating environment that we operate in within the Western Cape. Now the first 6 months for most parts has traded in line with management's expectations. But curve balls have occurred at times. We've had severe weather conditions, 100-year storms that have certainly kept us on our toes and have placed pressure on income growth expectations, together with cost creep in areas like insurance, Sasria and interest rates. However, and some sound eternal optimist, but there remains a realistic optimism that the core portfolio will prevail over what has been an extremely tough first half of the year. Positively amongst the sea of negativity, SPE continues to stand out as SA REIT sector outlier both in its performance and in the total return generation to the market. Spear's Western Cape focus remains key to the aforementioned as regardless of the Western Cape having its own challenges, as I just mentioned, severe weather. We continue to transcend the weakening municipal infrastructure and property fundamentals that are being seen across the rest of South Africa. Now our views are supported across a broad section of the regional economy as migration numbers that have been printed in the recent census show the strong migration of people to the Western Cape. We've seen a notable reduction in our unemployment rate, which means, and as I call it, people are economically active in this province, shopping in our retail centers, renting our office space and purchasing goods from the people that manufacture in our industrial portfolio. Now despite Spear's overall asset growth, not necessarily being at the rate that some people in the market want it to be. We are not going to compromise quality for quantity. We are going to stay a pure income focused fund. And for us, there must be income accretion when we grow. There's no other incentive for us. Now this fully aligns with our investment strategy, which Kim will unpack in the presentation today. And our world view remains that real estate is truly a long-term business. And we simply must just keep doing the basics right, keep it simple and the sustainable growth will come. Spear remains a very simplistic capital structured business. It's easy to understand. Our operating model consistently positions us to present with conviction, the strong investment case that Spear offers to REIT investors seeking direct register indirect real estate exposure in South Africa, but only within the Western Cape. As you'll see today, there are numerous green shoots. Yes, we can talk about interest rates. We can talk about inflation, we can talk about just the overall political situation in the country. But what you'll also see is top line growth, you'll see vacancy reductions, you'll see in-force escalations going in the right direction, rent reversion is going in the right direction, which I believe is a real nuance because of the hands-on management of this business. And because this business is nimble enough to move with the abate flows of the market. After the presentation, we will have some question-and-answer time. So I'd love to hear from you. If the answer any questions on the floor, we also would encourage those online to e-mail any questions that you may have to info@spearprop.co.za, and we'll get to them after the presentation. Just so we're going to cover during the course of the presentation. The following slide is some really good news that he won't have to just listen to me today. They will have Christiaan Barnard, our CFO; and Kim Pfaff-Karg, our CIO, also presenting today. So maybe I'll start with the mission. Stephen Covey says that you always have to start with the end in mind. And for us as a business, our focus and mission is to be the leading Western Cape focused REIT and to consistently grow distribution per share ahead of inflation and to operate within the top quartile of our peer group. For the most part, despite the ups and the downs of the market, we've achieved this mission. Now this mission isn't something that just kind of augments when and as the wind blows. So this really for us is a key north star to our business. Having a look at that mission statement and mission through the filter of our operating environment, the half year's operating conditions were challenging due to the impact of persistent load shedding, rising operating costs due to the impact of -- sorry, rising operating costs and subdued economic growth. But the Western Cape remains a positive outlier overall in the South African context, irrespective of not being immune to the shackles of load shedding and its associated costs. Operating cost creep has remained a concern. As mentioned, we've seen increased interest rates, and you can see the impact that, that has had on the operating business. We've seen a material increase in the city of Cape Town's rates and taxes. And again, sometimes you do become the victim of your own success, given the fact that the city is committing so much money to infrastructure investment over the next 3 years, there was very little choice for the city to increase rates and taxes, both the cents and the rand and the property valuations to actually underpin the infrastructure demands that are growing province and hopefully, one day a trillion-economy province requires. However, we do recover these increases. There is a lag effect. We have appointed professionals, which is some of the best money we do spend in objecting to some of these valuation outcomes from the city. And in Isolated cases, we do have success. The city has become incredibly sophisticated. And therefore, it's highly unlikely that we will have success across the board, but we have provided for that. Nonrecurring R&M, as I mentioned, due to these 100-year range we've had in the cape. It's amazing in 2019, we were paying for rain. And in 2023, you're playing for the rain to stop. So real estate is not a passive business. And then the absorption of diesel costs, there are areas within the portfolio, 5.8% vacancy rate where you do not recover the diesel costs as well as certain common areas. However, if you have a look in the CFO's presentation, you'll clearly see how we have made great inroads into those recovery percentages. In terms of disposal activity, as announced on since, we disposed of the Liberty Life Building to Capitec Bank that is all set for transfer still within this financial year, and that will have an approximately 500 basis point reduction impact on the Spear loan to value and naturally also push up our fixed debt ratios. In terms of portfolio occupancy rates, if you compare on a financial year 2023 to year-to-date, we are about 200 basis points higher in our occupancy rate, which again -- and I'll get to it in the more kind of granular detail on a sectoral performance, but we've seen massive gains made, particularly in the office portfolio over the last 6 months, which is incredibly encouraging. Occupied GLA is in 401,808 square meters at the half year. In terms of rent reversions, another positive takeaway for us from the half year has been a 3.5% positive print in rent reversions. 75% of those renewals and lets were done in the industrial portfolio. And what's quite notable about that is that there's a real income growth underpinned there because the in-force escalations are actually the highest in the total portfolio, closer to 7.74%, and the weighted average lease expiry is one of the longest in the core portfolio. We've also had incredible good fortunes in the year where -- actually at the half year, almost 85% of our entire years, renewals and relets were already concluded. So that's going to kind of flow through positively over the next 6 months. In a horizon interest rate environment, tenants do have a little bit of pressure, but we have the best debtor's book manager in the business, and I can't always tell you all the ways and means that we get our money in. They're all legitimate, I promise, but it's very active and very well managed. Despite there being some strain here or there, we do report on a very acceptable receivables book at half year. Now a theme for the South African listed property sector has been REIT's trading at a deep discount to the net asset value. For us, we've adopted a 3-pronged capital allocation strategy, and I'll talk to that a little bit later in the presentation. But one of those prongs is repurchasing of our own shares. Currently, exit cap rates and yields in the Western Cape are very compressed, and we can repurchase our own shares within a portfolio that we understand, the levers we can pull, how we can do it, and that's exactly what we've done. So for the half year, we purchased about ZAR 3.7 million of our shares, and this brings us to about 8.5% of company. And one of the slides to come, I'll just talk to the kind of further rationale plus the repurchasing yields on average for those particular shares. On the 9th of May, we took transfer of the Island Urban Logistics Park in Paarden Eiland, 21,000 square meters, fully let and also in line with our portfolio rebalancing strategy, which effectively is focused on our higher exposure to industrial, retail, mixed use and a bit of a lessening exposure to the commercial office sector. In terms of solar, SPL obviously has every opportunity to look to implement a growing PV solar portfolio. Currently, 54% of assets across the portfolio are installed with solar towards the end of the year, we will be closer to 60%. We have got approximately 7 megawatts installed capacity with that additional 2 coming on stream. Now I think sometimes in the market, there's a misconception that when there's load shedding, you've got a solar plant, the solar obviously generates, interestingly it doesn't, it's grid tied. And I'll also talk to that further in the presentation, but rationale for batteries isn't quite there for us, especially not if the cake will be load shedding free from stage 1 to 4 by the end of 2024 calendar year. Very encouragingly, we've also commenced the Greenfields development in George, our Phase 1 of the airport business park, known as GTX. It's a 30,000 square meter 9 portion industrial development focused on the agri-logistics sector within the Southern Cape. So having a look at some operational aspects that have been a key focus area for the business. So on your left-hand side, you'll see these 8 key points, what we've been eating, sleeping, breathing and everything since the start of the financial year. One has been commercial vacancy, vacancy creep mitigation, cost creep impact and mitigation, mitigation of measures against negative rental reversions, managing our treasury, robust collection profile, our loan-to-value being within our strategic band that we've set as a management team and also scaling the PV portfolio. So how have we done? So we've improved from a commercial vacancy perspective. This property, in particular, where we're standing now, at the end of the financial year in 2023, I was very vocal about my frustration with the low occupancy rate in this particular property. Since the end of the financial year until today, we've taken it from a 60% occupancy rate to north of 80% occupancy rates. And have been a net benefactor of the BPO sector investing heavily into the Cape, in particular into this property, where we've led to the Hilton Global call center as well as the Flipkart call center, which took up in excess of 4,000 square meters in this property. In terms of the balance of the portfolio, our Century City portfolio is now fully let. No. 1 Waterhouse is fully let. Liberty Life Building, while it's in the portfolio is also fully let. We had a 3,000 square meter vacancy. And also the Bloemhof building in Tyger Valley is equity fully let. And that just really breathes impetus into the kind of recovery of the commercial office portfolio. And what's quite interesting is that it wasn't just BPOs that took up these spaces. Some of them were C-suite offices moving from Johannesburg to Cape Town, where executives have taken lifestyle decisions to relocate. Now you can imagine our frustrating it must be if your offices are in Sandton and none of the robots work. If there's potholes everywhere and you've got to try and actually be motivated to execute on an executive plan on a daily basis versus coming to Cape Town and actually being in the city that works and works for you. From a vacancy perspective, again, as I mentioned, vacancies have contracted, which is obviously improved portfolio occupancy rates. Cost creep has been a challenge. And as I mentioned, interest rates, rates and taxes, nonrecurring R&M. So I do believe that we've done what we can to maintain income statement stability, but it has obviously had an impact, and you can see it coming through in the performance. Reversions, as mentioned, consistently from half year 2023, full year 2023 right the way through to this half year. We've seen an annualized half year to half year improvement. And again, that is a result of our early engagement strategy, our hands-on property management strategy and also understanding the market. We know who's moving, who wants space. And also another thing is that geographically, property fundamentals have shifted even in Cape Town where some landlords have got Eskom supply power and some lenders have got a City of Cape Town supply power. And that also has given us, given 90% of our portfolio is supplied by the city of Cape Town, a bit of a competitive advantage. In terms of cash availability, treasury management has been sound with ZAR 150 million of cash availability. Rent collections is trending quite nicely back towards the 99 percentile. And our loan-to-value is well within our strategic brand of 38% to 43%. And the last point on your left-hand side is obviously the scaling of the PV portfolio. Recently, some of our peers announced their successful wheeling from one property to the other. So currently, we are looking at putting in a big solar PV plant at the island in Paarden Eiland and actually wheeling that electricity to 2 Long Street, which is a 22-story high-rise, which has no solar capacity to offset some of the energy demands within the portfolio. So moving on to our corporate performance. So again, on your left-hand side, you'll see Spear REIT in the green line compared to the FTSE JSE Small Cap Index, the FTSE JSE SA listed Property Index and the SA REIT index. This is based upon a cumulative total return metric. And consistently, you will see that Spear has outperformed in particular, the SA REIT index by 10% on a cumulative total return basis from the 1st of March 2023 to the end of August 2023. Now for us, this chart actually shows a very interesting divergent path between Western Cape only focused real estate fund versus the generalist nature of the diversified asset real estate sector, given the fact that there's been such a decay in municipal services and real estate fundamentals in the rest of South Africa. Thematically, we see investor sentiment continue to shift towards these uncomplicated South African businesses, of which Spear is one. Spear's regional approach and investment strategy continues to find favor with astute investors as we navigate the dark days of SA listed property sector. I think even for an investor, when you're looking at deploying capital, you also are looking at good governance. You're looking at where the future revenue is going to be generated. And I think that's exactly what Spear provides you as an investor as a good vehicle for an investor is that you've got the effect of immigration where the balance sheets are moving down to the cave. You've got BPOs, you've got tech businesses investing into the Western Cape and utilizing our assets to generate yield for us and for you as shareholders on a continuous basis. And I think one thing that's also been fantastic to see, and I believe is key to South Africa actually becoming a better place is the contraction of the unemployment rate within the province. I think it's a phenomenal achievement by the Western Cape government and the city of Cape Town and the local authorities to have augmented from a 27% unemployment rate to a 20% unemployment rate year-on-year. And that's largely driven by the recovery of the hospitality sector, the tourism sector and the services sector, which is fantastic to see. I mean we do truly live in the best city in the world. Then in terms of liquidity, yes, liquidity, that little gremlin, but if we cast our minds back to 2016 at listing date, we had hardly any liquidity -- and all we did was we just put one foot in front of the other. We kept doing the basics. We created a consistent, credible and predictable business that delivered to our shareholders what we undertook to our shareholders. Where we are today, we're trading almost ZAR 30 million a month in our stock, approximately 172,000 shares traded on a daily basis. From a 6 months to the end of August, we've traded about 10% of our gross shares in issue. So I think from a liquidity perspective, we're on that journey, and it's consistently improving so much so that we've had very interesting off-benchmark investors coming into our register as a result of the strategy and as a result of the focus. I've already touched on the repurchasing program, so I won't talk too much on it. But just to give you an indication of how it's manifested itself from the end of the financial year through the half year, repurchasing 3.7 million shares. We issued back to qualifying staff members of 886,000 CSP shares. So we don't issue new shares. We actually repurchase in the market and utilize what we've repurchased to settle those CSPs, giving us at the end of the half year about 21.6 million shares that we've repurchased. First half year, we've probably repurchased in the region of about 180,000 additional shares. Now if we compare an average acquisition repurchasing yield is north of 11%. And as I mentioned earlier, we understand the portfolio, we understand where things are going. And they actually, for us, at this point in time, there isn't a better place to allocate capital than repurchasing our own shares at the moment. Then just moving on to the salient details. Just in summary, Spear owns 28 high-quality Western Cape assets banded at ZAR 4.46 billion. We've seen increase in portfolio value since the end of the financial year of about 5.85%. Our average property per property increased value to ZAR 157.5 million on a rate per square meter at ZAR 10,300 per square meter. I know that it's not necessarily an accurate measuring stick, but I think you're going to look very, very hard and very far to be able to get an entry point into a quality portfolio like this at 10,000 square meters. So I do think that we offer incredible value from a valuation perspective. In-force escalations have continued to just increase and become the norm back from the kind of mid-6 percentile to the mid-7 percentiles. Portfolio GLA, 426,000 square meters with an occupancy rate of 94.19%. And our leasing team is working very, very hard to get us back to the close on 100% occupancy rate. So no pressure. But then in terms of the weighted average use expiry, what's interesting is that we reported at the end of the financial year, a 27-month weighted average use expiry. We're now 6 months down the line, and we're still reporting 27, which means that we're successfully able to continue to push out that lease expiry profile. Now for us as a business, it's always great to have this long-dated profile. But for us, what's also critical is tenant preservation and rent preservation in the short, medium and long term. So sometimes you've got to also have a look at optionality. If tenants want to renew for a certain period of time, there may be nuances with it, especially in a post-COVID world, you don't necessarily get the longer dated leases on the office sector. But on our industrial portfolio, it's a completely different story. We've entered into more longer-dated leases, 5 to 10-year leases in the last, I would say, 2 to 3 years in what we've done in our entire existence. So that's very positive. On a rate per square meter basis, our average rental per square meter is ZAR 103 a square meter, which includes rates and taxes. And our collections, as I mentioned, very robust at 98.3%. And that number will improve even further because our large power users on our industrial portfolio pay their rent at the beginning of the month, and they pay the utility charges at the end of the month, and this will be as at the 6th of October as a collection measuring period. And then finally, just on the snapshot, we have generated a ZAR 21.9 million net cash from the portfolio operating activities. Now what does it actually tell you? That tells you that we are a cash underpinned business. So we don't generate our performance through accounting principles, we actually generated through pure cash. Having a look at the financial snapshot. So we reported on a distributable income per share of 40.77 on a DPS of 38.33 per share. That is a growth of 3.21% half year to half year. Now our payout ratio has increased from 90% to 94%. That was as a result of stronger in-force escalations, stronger rent collections, debtors book shrinking and the decision was made that we had enough capital set aside for portfolio CapEx and other reinvestment activity and the payout ratio was increased to 94%. Our SA REIT cost-to-income ratio is 43.32%, and our SA REIT admin cost-to-income ratio has dropped to 5.77%. Our tangible net asset value per share is ZAR 112, which is an increase of 1.3% versus FY '23 tangible asset value per share of 11.47. Our loan-to-value, 39.58%, very much in the sweet spot of our LTV band. Now we don't necessarily see ourselves as passive managers of our assets. So as we enter a tapering cycle, we will look at some opportunities to try and grow the business in a way that doesn't cause us to push up our cost of capital, and that would probably see the LTV kind of remain in the kind of 38 to 43 percentile band. We will see a kind of drop below that band once the Liberty Life Building does transfer, but we do have some other market opportunities we are looking at, together with the demands of developing in George and other organic growth opportunities we will touch on in the presentation that will require some money. In terms of our fixed debt ratio, it's a 33%, now we are below our internal band. Entering into derivatives is very expensive. We have, as a management team, opted to utilize disposal proceeds to naturally bring up that hedge ratio. And what it does in 2 ways is that it obviously increases our hedge ratio and it doesn't impact the income statement from an expense, interest cost perspective. In terms of our average debt expiry 27 months, interest cover ratio 2.36x. That will continue to improve as we enter into an interest rate tapering cycle, and our funders who are here today graciously offer us better margins. In terms of our average cost of fixed debt, 8.27% and our average cost of variable debt, 10.17%. In terms of collections, for the period, we built ZAR 288.7 million in rent. We collected just under ZAR 283.91 million. That's a 98.36% collection ratio. Just on a more granular basis, we collected 98% of our office rental, 97% of our industrial rental and 97% of our retail rental. Now as I mentioned, TENT receivables for the half year, ZAR 4.7 million. We do believe it is a very high prospect of success, both through the court system, which is a slightly longer process, but we have seen some successes of late, which has caused that receivables to continue to shrink. I'm now going to hand over to our CFO, Christiaan Barnard, to take us through the financial performance metrics.

Good morning, everyone. So I'm going to try and take you through a bit more detail Quintin has mentioned a lot of the explanation, I will say, I'll keep it try and keep it brief and simplistic as Spear is. Looking at our income statement, on a year-to-year period basis, our revenue declined by 0.41%. But on a like-for-like basis, the revenue increased by 9.8%. Now for the comparative period, the reason for the decline is purely because of the delayed tranche of the island, which is expected in March, but it only occurred in May and the sale of the 55 online transaction, a building, which was included in 6 months in the prior period and was no month this year. But on a like-for-like basis, the revenue growth there is purely because of reduction of vacancy, in-force escalations positive rediversions and robust cost recovery. As an example, we're currently recovering 95% of our diesel costs, which I think is one of the market leaders at that metric. Looking at on net property operating profit growth of 0.6% on a like-for-like basis, 10.14%. Operating expenses increased by 0.31% and on a like-for-like basis, 8.98%. Now again, like-for-like basis, that is quite a substantial increase, but we do have almost a 300% increase in terms of diesel compared to the prior compatible. We all know the effects of load shedding and Level 6 that we experienced in the past 6 months. Repairs and maintenance, 100-year rainfall. I build houses, I know it is expensive to go through these rainfalls. And then in terms of council, as Quintin mentioned, the rates and taxes, we saw substantial increases, which will have a lag in terms of objection and recovery and the credits received by council. Administrative cost to income is at 13.3% decline, but on a like-for-like basis, it increased by 11.45%. Now this is purely because of the fact that there's no short-term incentive accrual as this is based on our visible income per share growth, which unfortunately, this period, there was some pressure on. And in terms of a like-for-like basis, as Quintin mentioned, we had some successive in the courts, but the lawyers is expensive. They do charge some money, but we had good successes and debt cost will also be recovered once the tenants repaid the debts, we had success on. Now on a more detailed income standard basis, I [indiscernible] like IFRS adjustments, even though I'm an accountant. But if you look at our straight-line rental income, the third line from the top, you will see that has increased quite substantially. Now what does that does show you? Is the fact that our leases are longer in period and the rentals are increasing. So even though it's a boring metric that we report on, it's quite a fundamental metric seeing that number rise from period to period. It's showing that leases are being signed for longer at higher rentals. And if we go down to our net interest, which is the elephant in the room, as we all know, interest increased by 8.2% for the comparative period. And that has unfortunately put down expression on DPS as well as an interest cover ratio, which is at 2.36x. We do foresee that the interest cover ratio will normalize in the mid-2.40s as the new rentals come into place, and we do have the cost recoveries over the next 6 months. Looking at the reconciliation of our earnings. Again, I would like to just make it very clear. But if you look at this information, this is pure property operating performance. There is no one-off. There's no capitalized information in here. This is free cash flow generated from the company has paid to shareholders as a property company should be. As Quintin mentioned, we generated 40.77 for the half year, which is a decline of 1.9%, but we are very satisfied with this performance, given the extreme pressure on interest rates, once-off all the costs we had to absorb. After applying a 94% payout ratio, we achieved a ZAR 38.33 distribution per share, which is 3.21% higher than the prior comparative period. Now payout ratio, we previously communicated we will fluctuate between 92% and 95%. Now the ratio will be determined based on the capital required for the uptick of the portfolio in the upcoming 6 months. Based on projects we have currently ongoing, we determined after paying income taxes, that 94% payout is sufficient to be able to retain cash and upkeep the portfolio to the standard is required. Our balance sheet, I don't think there's a more simplistic balance sheet in the sector. If you look at our assets of ZAR 4.6 billion, of which ZAR 400 million is current assets, which is the Liberty Life building that is held for sale, then LTV 39.58%. We have a current liability of ZAR 700 million, which could look scary. But bear in mind of that is the Liberty Life transaction, which will be settled as previously communicated when the transaction concludes, and ZAR 250 million of that is currently sitting with the bank's credit committee for final approval of which terms has already been agreed. So that will be refinanced within the next month or 2 and have moved out to a new 3- to 4-year loan. Our tangible net asset value was ZAR 11.62 at period and increasing from ZAR 11.47. Again, the reason for the increase is purely simplistic is a bit of retention money after paying out our distributions, fair value adjustments, which Kim will touch on later in the presentation, further acquisition of treasury shares and in a couple of other adjustments. After we pay out a dividend of ZAR 0.38 for the period, our tangible net asset required is still ZAR 11.24 just showing how deep of the discount our share is trading at in the market. Now as I mentioned, the elephant in the room, interest rates and funding. We have a total net debt of ZAR 1.77 billion at the average cost of 9.59%. Fixed debt is 33%, average cost of 8.27% and a weighted maturity of 16 months. Variable debt is at 67% and an average cost of 10.17% and a weighted average maturity of 27 months. Now we do have internal mandate to have our fixed debt at between 65% and 75% of group debt. Currently, we are below this band. I can promise you, we are working daily and actively to get that level back into that band by our financial year-end. We've worked nicely with the financial institutions and the global markets teams on the swap rates and the various hedging projects that's out there in the market. But over the past 12 months, swap rates have always traded higher than a variable debt and entering into these products would have been dilutive to the company, and it would have been -- which is currently the theme in the market lock Spear into interest rates for higher and for longer, which we believe we are at top of the cycle in terms of hiking possibly one more given the latest CPI print the 5.4% that occurred last week, but we are very close to tapering cycle starting. Some reporting early 2024, most reporting in mid-2024 at the tapering cycle will start. Now the question lies, do we blade into fix to have a disclosure metric? Or do we buy a time, make sure we enter into the right products at the right time to ensure that we are not dilutive to the group, but we have a runway to ensure that we can, with a 16-month maturity, we can buy our time a little bit and ensure that we fix to get within a band that is accretive to the group. Now, ShopRite has finally come down to trade plus minus the variable rate. So we're starting to get to the level where we can action these numbers. We have the agreements in place of the bank, so we can action it swiftly, if required. Take into consideration dispose the Liberty Life Building will result in the increase in fixed debt ratio 250%, which is very near to completion, which Kim will touch on as well later on. That we do have a disposal pipeline. We will use the disposal pipeline to settle variable debt would also naturally increased the fixed ratio. And looking at the debt expiry, we have a very robust profile where we financed ZAR 326 million asset debt in the year at improved margins. As mentioned, ZAR 250 million is with 4 gross credit, also improved margins. So our markets are continuously improving the ICR, as Quintin mentioned, and will continuously provide more free cash flow to the business and increasing our DIPS over the next 6 months. Then looking at our strictest covenants of the banks, LTVs at 50% and ICR is at 2x, a period end 39.5% LTV and 2.36x ICR. And as we mentioned, we believe that this ratio would normalize in the 2.45x over the medium term as our rental escalations, in-force escalations, cost recoveries kicks in and moved into the new financial year in 2025. Liquidity availability of ZAR 150 million, debt refinanced in the period. And as I mentioned, the refinance that's currently in progress. Now the SA LTV is made up of the following structures in the next 12 months. Bearing in mind, this is only transactions that we know is in the workings that we're actively working on. For example, the disposal of the Liberty Life transaction, which will result in a decrease of 5.84% as property disposal, which we advanced discussions with, which Kim will discuss and has talked to as well, will decrease the LTV by 2.68%. Paying our interim dividend will increase by 2.19%, and then GTX Park in George, which it Infrastructure has commenced in October. Now these 2 metrics are only the civil infrastructure. We have not included the top structure cost in the sensitivity as we will not build obstruct out to sign tenant lease. We will not develop on spec, and we will only include the cost and know the cost. Once we sign the tenant specifications and we know this exact specification that tenant requires, then we were able to include this. But as you can see, at 33.76% post of sale infrastructure, there is a runway to include top structure. It will not place further pressure on the LTV. We will most likely end up back within our strategic band after spending about ZAR 300 million to ZAR 350 million on a top structure. So there's just no risk in terms of any LTV pressure. And that's about it. I'll hand it back to Quintin.

Thanks, Christiaan. I appreciate the comprehensive update. Moving on to the portfolio overview. Now I really love this slide. These are our top 5 assets. What's really great about these top 5 assets is that it's a great display of diversification. But in addition to that, our top 5 assets make up just under 50% of our total portfolio value. We have a what we call a less is more approach. So we would own fewer assets, but assets of higher value, giving us real kind of focused asset management opportunities. And what's even more interesting is that we've seen across all 5 with the exception of Sable Square, vacancy contraction across every single one of these assets over the last 6 months. And furthermore, what's quite interesting is that 50% of the total GLA of these top 5 assets is held within Mega Park, which is a multi-let industrial asset, which has got multiple blue-chip tenants as well as a growing weighted average lease expiry, growing in-force escalations and also has printed some really great numbers on a rental growth perspective over the last 6 months. What you'll still see is the Liberty Life Building in this picture, exiting the portfolio towards the end of the financial year. That will be replaced by yet another office building, which was 1 Waterhouse, which also is fully let and occupied by numerous blue-chip tenants like Vodacom, Telesure and a couple of other great businesses, which in my mind has just hit a bit of a blank. Euromonitor also a great company. Then just having a look at the sectoral split by value, revenue and GLA. And I think one thing that Spear has also been known for a little bit of an office heavy business over the years, which has also been one of the reasons why we initiated what we call the portfolio rebalancing strategy. So I'll just take you through these metrics and then kind of granulize them on a per sector basis. And then Kim can also touch on what the strategy will look like a little bit further on in the presentation. From a value perspective, about 1% of our value sits in the land, which is the George development, approximately 16% of our value in retail. Now as a business, we've only ever invested into convenience retail and specific destination retail within the Paarden Eiland region of Cape Town and approximately 34% Industrial, which comprises of multi-let industrial, logistics, warehousing, distribution, small to medium industrial products and 49% of our value in high-quality sort after commercial assets, which obviously have operated at just under 90% occupancy rate. As mentioned in the presentation, 28 assets, 6 industrial assets, 6 retail assets, 9 industrial assets and 13 commercial assets. From an occupancy perspective, 93% occupancy in the retail portfolio, 98% occupancy in the industrial portfolio and 88% occupancy in the commercial portfolio. From a revenue perspective, 49% of our revenue is generated from offices, but that is still whilst we have the Liberty Life Building in the income statement. That will augment quite nicely, almost creating an even kill between industrial and commercial after the transfer date and then 17% of our revenue generated from retail. They're having a look at this almost a more granular split of assets. Now what I would ask you to do and we'll probably kind of give you a little more detail in the next presentation is you almost need to see manufacturing and multi-let industrial as one kind of subsector. So when I talk about manufacturing, I'm also talking about multi-let industrial. So from a portfolio perspective, in terms of value, 40% of our industrial portfolio is logistics, 47% is manufacturing and multi-let industrial and 13% is urban logistics. On a gross lettable area perspective, 43% of our industrial GLA is logistics, 49% is manufacturing and multi-let industrial and 9% is urban logistics. Now Urban Logistics just quickly is a typical industrial asset located very close to your city centers, which provide homes to more bigger box destination industrial, last mile type of fulfillment centers. And in terms of property occupancy, our logistics portfolio is 100% occupied, Urban Logistics portfolio, 99% occupied, manufacturing and multi-let industrial is 95% occupied. In terms of property revenue, we derive 38% of our revenue from logistics, 55% of our revenue from multi-let and manufacturing and 7% of our revenue from urban logistics. In terms of commercial, now this is a bit of a tongue twister, some want to do my best here. Within the CBD, we own 1 asset, 2 Long Street that gives us 22% of our property value. By and large, the Century City portfolio, which is made up of 1 Waterhouse, 2 estuaries in the Liberty Life Building makes up the lion's share of every one of these metrics from a valuation perspective, a GLA perspective, occupancy and a revenue perspective, making up 34% of value, 35% of GLA, 96% of occupancy and 37% of revenue. In terms of the Tyger Valley portfolio, these are 6 or 7 buildings that typically cater for the 150 to 700 square meter market requirement within that area. And we've seen this now being extremely resilient even during COVID, given the fact that you've got such a well-established both residential and commercial node within the northern suburbs, people were willing to actually go back to the office because they live generally a lot closer to where they worked, and that really stood us in good stead specifically during the pandemic period, of which that is 17% of our value. Para is a single asset, 100 fairways, which is a multi-tenanted assets tenanted by the Western Cape government, the city of Cape Town and MWEB and then Century City, I've mentioned, Woodstock is this particular asset making a 5% of value, 7% of gross lettable area, 78% of occupancy. As I mentioned, it's gone from 60% in the financial year 2023 to just under 80% and consistently increasing and 3% of property revenue. And then Brooklyn also it's a single property asset Northgate Corporate Office Park, which makes up 14% of our value, 13% of our GLA, 77% of our occupancy and 12% of our revenue. Retail, less of a tongue twister. As I said, we only invest into convenience retail and destination retail. We do see and unfortunately, maybe Hyprop most recently reversed the fees on that because we simply can't pay what they've paid for [indiscernible], but we wish them all the best. I think it's a fantastic center. But we've seen some opportunities in the regional retail space as rental levels have contracted and maybe offered some market opportunities. But unfortunately, we've been kind of kindly nudged out of that space by the private pension funds and by the likes of Hyprop to not be able to participate in that market because we just can't afford to pay those kinds of values for assets. 80% of our portfolio from a value perspective is convenience retail and 20% is destination retail. On a GLA basis, 60% is convenience and 40% destination retail an occupancy rate of 93%. We have 100% occupancy rate in our destination retail portfolio, which by and large, Kim will talk to will form part of our marine Place development in Paarden Eiland and 89% occupancy in the convenience retail centers. In terms of property revenue, the convenience retail centers contribute 82% to revenue and 18% of destination retail. My personal favorite slide of the day, because I think this is really what we are as a business. We're a listed REIT, we're a property fund, but what we really are is a glorified rental enterprise. That really is what we do. We own space. We're trying to get the best rental for it. We try and manage our overheads, and we try and generate as much net property income as we can. And how has this kind of manifested itself. So over the half year, we had about 74,000 square meters come up for renewal and relet. We've shown net gains of reletting and renewing 83,000 square meters of GLA. What's also been very encouraging is the net gains that we've achieved in both commercial, industrial and marginally in retail. Yes, we have seen a negative reversion in retail. We did advise the market that we had 2 lease agreements that had come off longer-term leases that had escalated well ahead of the market. Those were factored into our income statement assumptions. And then in terms of commercial, if you have a look at the actual percentage of the total of 131,000 square meters, the reversion is a reversion at the end of the day, we don't like to take it. But at the end of the day, we've got to be realistic. We either sit with a vacant space or we take a marginal reversion, the cost of filling the space again, the tenant installation cost and the vacancy cost far outweighs taking a shorter-term reversion even and, in that reversion, we actually are getting slightly better escalation rates coming through. But what's also very interesting is I mentioned earlier about the strong escalation rates in the industrial portfolio. So from a half year period, we've seen 75% of the total GLA that came up for renewal and relet being within the industrial space at a 4.5% positive reversion. So that continues to obviously underpin the strong growth within the industrial portfolio from an income perspective. Just in terms of our tenant vacancy profile, you'll see that we have a vacancy rate of 5.81%. That is 24,780 square meters. We do hold ourselves to quite a high standard. So we'd like to see that shrink consistently. Positively, I can confirm that we've got about 20% of that 6,000 square meters of industrial vacancy under negotiation at the moment. Yesterday, we dropped below 15,000 square meter vacancy with about 450 square meters let at Sable Square offices. And then retail, we've got a variety of plans there that we're looking to implement to contract that vacancy within the portfolio. In terms of the number of tenants, we are just do go about 444 tenants in the portfolio, of which 43% based on GLA are large nationals and international tenants. 50% are national tenants, smaller listed tenants and 6%, as I mentioned 5.8% is vacant and 1% is other. Now that 1% is generally our kind of owner manager type of businesses, which you'll find them in the Tyger Valley portfolio, Paarden Eiland portfolio and predominantly in the Blackheath and Mega Park portfolio on the industrial side. Now just kind of getting a little bit more into the detail, just we've split it up per sector. So on the retail side, 48,951 square meters of GLA. What's really great for us from a credit risk perspective, especially in a market where you've got rising interest rates, consumers that are under pressure and tenants that obviously factor their turnover based upon rental, 41% of our tenants within the retail portfolio on strong national. So you're talking the Petcos of the world, okay, well, let's pick up any visit commerce with respect. They've obviously had a bit of a tough time. But these -- you always know your rent is going to be paid. So from a credit risk perspective, having 41% of your tenants being nationals is really, really good for the income statement. Our tenants continue to report consistent trade within both aspects of the portfolio. And also, we don't place any reliance on both international or local tourism. That was particularly important, especially coming through COVID, where a lot of the retail centers that were reliant on tourism, where the local international were really depressed. Occupancy rates, 93.13% collections have been robust, as I mentioned, the negative reversionary print. But also more excitingly, I mean, larger retailers are looking either through mergers and acquisitions or through just additional CapEx allocations to increase their footprint of stores across the portfolio. We just opened up our first Ackermans and PEP at Sable Square, which is positive and aligned with this kind of renewed CapEx on certain of the retail stores. In addition to 2 Long Street, we've let up about 600 square meters to Woodford's car rentals, which also have gone on a massive national kind of growth spree to open across the country. So we're starting to see these types of retailers starting to spend the money where it needs to be spent. Then in terms of commercial, as you've seen throughout this presentation, we've made really good progress on vacancy contraction within the office sector. We've seen a 330-basis point increase in occupancy rates from FY '23, which is over the last 6 months. Collections have been robust. But I must just comment the BPO sector really has been a game changer for Cape Town. And if it wasn't for a big change in [ degislation ] in the Philippines, I think things could have been very different for Cape Town because that really was the change or the shift where BPOs had to really pivot to come to the Cape, and that's been fantastic for us and for many other landlords, which is a bit of a get-out-of-jail-free card, in my opinion. In terms of 1 Waterhouse, fully let, Bloemhof Tyger Valley fully let up preside occupancy, as I mentioned, and the Liberty Life Building, as I've mentioned. Moving on to Industrial. We've seen consistent strong trading within the subsector of our portfolio. The occupancy rates have been very high, 97.52%. Collections have been robust at 97%. And we've seen this continued demand for multi-let industrial within our portfolio. And the comment that I made earlier that 93% of our portfolio is supplied by the city of Cape Town. Now property fundamentals geographically, as we know, have shifted. But again, now certain parts of Cape Town are not supplied by the city of Cape Town supply by Eskom. And we've actually seen a massive tailwind on our Mega Park asset, where we've received tenants from Monje Gardens and from other parts of the Cape that are supplied by Eskom that require consistent supply. Tenants are willing to pay a higher kilowatt hour charge and a higher demand charge on the city of Cape Town on supply, but have consistency of supply because the downtime, the duplicated payroll costs and over time, far outweigh the higher kilowatt hour charge that is incurred. And I can maybe just talk anecdotally on that. So we had console 21,000 square meter tenant within our portfolio. Their lease comes up at the end of -- it came up at the end of October. So you would have seen in our second quarter update or the Q1 update off, sorry, I also had a bit of a blank there. The last update we gave to the market, you would have seen that we showed you the track just the positive traction that we've made in reletting that 21,000 square meters. Now at the point that we issued out that announcement on our quarterly update, we had about a 6-month weighted average lease expiry over 21,000 square meters of the 86,000 square meters at Mega Park. That space was 80-plus percent predict before the expiry of the console lease, not just on -- so the weighted average lease expiry of that 21,000 went from 6 months to about 60 months, which was a combination of a 3-year, 5-year and 10-year lease agreement for 3 different tenants at a higher rate per square meter. So I think all 3 of those tenants moved to Mega Park as a result of it being on a low chilling curtailment program and having consistent electricity supply at its disposal. Then in terms of the Island, taken transfer, Kim will talk to that a little bit later. And then we've commenced on the bulk infrastructure works within George and also received strong interest from prospective tenants. Just a general update. I know that, as I said earlier, please, the qualification is that I am an internal optimist, I do believe that our future will be better than our past. But the operating environment does remain challenging. But the core portfolio is performing very well. We do see a consistent recovery within the office portfolio. We will continue to augment our PV solar program and our water programs to ensure that we place less reliance on fossil fuel-generated supply. Our rental collections have been in line with our forecast and that we'll continue to look for portfolio enhancement opportunities, which, again, Kim will talk to in her presentation slides. So just a quick one on the lease expiry by GLA, if we have a look back 2 years, our average is expiry across the portfolio showed around 18% of our portfolio coming up for renewal and relet on an annualized basis. Because we have done so much work in pushing out that lease expiry profile, in particular across 58% of our portfolio, that average has actually declined by about 4%, which today, about 14% of our portfolio comes up for renewal and relet on an annualized basis, which I think is exceptional work by our property management, asset management and leasing team. We don't see any major kind of red flags here, just to comment. So you'll see under industrial for this particular industrial if you can see this one over here, you'll see that this bar here, this yellow bar, what's quite interesting is that almost 80% of that bars are really been extended and renewed. So that effectively would be liquor runners, which is about 15,000 square meters. We've also done an extension and renewal for Super Group, which is about 13,000 square meters. So that graph that hasn't yet taken into account this particular disclosure here. And the big red bar in September 2024 and August 2025 is the Liberty Life lease that comes up, which will obviously come out of the portfolio well ahead of that particular date. Right. That's it from our side. I'll come back to just talk about the outlook, but I'll hand over to Kim.

Thank you very much, Quintin. Good morning, everybody. I will be talking you through the acquisitions, disposals and development updates followed by our half year property valuations. However, before I begin, for those of you that are new in the room today and joining us online, I'm going to start off by briefly reiterating our investment strategy. First and foremost, Spear is a 100% Western-Cape-based fund, which means that we exclusively invest in the Western Cape province, and we intend to keep it that way. We like to be within 1 hour's drive or flight in the case of George from each of our assets. From a factorial point of view, we strive to consistently have an industrial and retail buyers both in terms of gross lettable area and, of course, also in terms of value. For us, less is always more. And thus, from an individual asset point of view, we aim to have a minimum asset size of ZAR 100 million per property unless an acquisition is particularly strategic to the fund. Our emphasis will always be on quality and stability over quantity. We will only grow the fund with assets that meet our strict investment criteria, which is good quality assets in key locations with strong covenants and with long-dated lease terms and of course, assets that are accretive to the fund. Over the next 5- to 10-year horizon, we plan to unlock embedded bulk across the portfolio, of which we have around 150,000 square meters, some of which I will discuss later in the presentation today. And finally, we intend to grow the portfolio to a meaningful mid-cap sized fund in the region of ZAR 15 billion, which, as we have mentioned before, is more of a growth intent than a target value. I will now take you through the execution of our investment strategy, and we will start with acquisitions. We took transfer of the island on the 9th of May this year. The island is a high-quality 21,500 square meter urban logistics facility located in the sort after Paarden Eiland industrial and mixed-use area, which is immediately north of the Cape Town CBD, but also within close proximity to the harbor. We purchased this property for ZAR 185 million at an initial yield of 9.75%. The yield at which we acquired this asset is attractive, having a positive impact on our overall portfolio earnings immediately from the date of transfer. And after our half year valuations, we have also seen a nice uptick in value. From an asset management perspective, this asset has been stabilized into our core portfolio. It is performing in line with our expectations, and it has proven to be a great fit in the Spear portfolio. Further, this acquisition has increased our industrial gross lettable area to just under 60% of the total Spear portfolio. No further acquisitions have taken place during the interim period. We have, however, assessed a number of opportunities to purchase. But given the high current cost of capital and the compressed yields at which quality assets are trading at in the Western Cape, we have elected to buy at our time. In the line with our 3-pronged capital allocation strategy, acquisitions right now are not at the forefront versus portfolio reinvestment, share repurchasing and of course, the launch of our greenfield development in George, which I will speak to later in the presentation. Disposals. This year, we have concluded the sale of 12 Pickwick Road, which is a noncore asset. It is a specialized industrial lab facility located in Salt River just behind the hotel here, which we sold to the tenant for just shy of ZAR 23 million. And we also concluded the sale of the Liberty Life Building for ZAR 400 million in Century City. This sale was strategic, and it will significantly reduce our exposure to the office sector, but more importantly, to single-tenanted office risk. The property or the transaction is unconditional, and we expect it will transfer towards the end of our financial year. We are always looking internally within our portfolio to see where we can optimize, create value or mitigate risk. And as such, we are in advanced stages of negotiation to sell another one of our assets, which we, as a management team, together with our investment committee believe has reached the end of its life cycle. Once concluded, the proceeds will be redeployed in line with our capital allocation strategy. And all things going according to plan, the property will be sold at an attractive exit yield and also at a premium to what we originally paid for the asset. On to development growth. Firstly, we have Blackheath Park, the extension. As mentioned in our last results presentation, we completed what we deem to be Phase 1 of the Blackheath Park at redevelopment, which comprise 13,000 square meters of existing gross lettable area, plus 3,000 square meters of newly constructed lettable area. This redevelopment cost us ZAR 74 million on the back of a brand-new 10-year lease with Blackheath brands. To the north of the earth is a vacant piece of land, which we intend to develop with a 7,000 square meter warehouse, which will be Phase 2 of the development. We have already responded to an RFP using this opportunity as the responding asset, which we would like to present. This unlock of value will be tenant-driven and not speculative. However, given the robust demand for warehousing in Cape Town and the location of the site, we believe it will not be long before we secure a suitable tenant. The estimated cost of Phase 2 is around ZAR 66.5 million. But given that we already own the land and thus, the land cost is effectively nil. We anticipate this development will yield an attractive initial return. GTX Park in George. This greenfield development opportunity comprises a 7.75-hectare piece of land located directly opposite the George Airport. George is one of the fastest-growing towns in South Africa and is a sort after tourism, agricultural business and investment destination. George is ideally located between Cape Town and [indiscernible] in the heart of the Garden route. George linked seamlessly to all major towns in South Africa via the N2 highway and of course, the George Airport. The land has been rezoned successfully from agricultural to light industrial and will form part of a greater development, which will be known as the airport business park. GTX, which is our portions, approved bulk is and 30,000 square meters. This development will also be tenant-driven and not speculative. We are currently targeting agri logistics, cold storage, and last mile and airport-related users. The unit sizes will vary between 400 square meters and 10,000 square meters with roof heights of between 10.5 meters and 15 meters. The full development cost, including the land is estimated to be around ZAR 400 million, and our target initial yield is pegged at 9.85%. Since launching this development, we have been inundated with inquiries, and now it's just a matter of securing the right tenants. And we're also happy to report that bulk infrastructure works are currently underway. Marine Place in Paarden Eiland. Marine Place is a sizable project with an estimated total development cost of ZAR 1.4 billion. Given our current market cap, we will only undertake this project with a strategic or strategic co-partners. We have approved rights of 52,000 square meters, and the envisaged design will have a strong residential bias together with showroom, convenience, retail and many offices and many industrial units to the rear. As you can see, the location of these sites is absolutely prime being a stone throw from the Cape Town CBD and also benefiting from uninterrupted ocean views. The properties are currently let and yielding an acceptable return. And as such, we are in no rush to develop these properties. However, having said that, we have seen a significant increase in demand for sectional title residential units in Cape Town despite rising interest rates. So we do believe that we are approaching the development cycle where this project is moving closer and closer to activation. Our idea would be to trade out of the residential component to reduce the total capital cost of the development. And that concludes our investment strategy and execution. I will now take you through the Spear half year valuations. When comparing our interim results to that of 6 months prior, the total value of the portfolio, excluding land, has increased by almost 6% from ZAR 4.1 billion to ZAR 4.4 billion. However, on a like-for-like basis, the portfolio has increased by ZAR 24 million, representing a marginal uplift of 0.55%. When analyzing our portfolio from a sectorial point of view, all sectors, including offices, have performed well. This is the first time since the onset of the COVID-19 pandemic that we have seen an uplift, albeit marginal in the office sector. This, as Quintin mentioned, is largely due to the high demand in the Western Cape for offices in the tech and call center industries, which has had a positive impact on the overall office sector in the Western Cape and particularly in Cape Town. As we guided at our full year results presentation, we expected to see a troughing out of the office valuations, which is a product of improved letting activity, improved in-force escalations and a reduction in vacancy rates. Now on to the valuation metrics. Our average industrial property is ZAR 6,223 a square meter. The average office property is GBP 17,830 a square meter, which is including parking. And the average retail property is GBP 11,780 a square meter, all of which are considerably below their respective replacement costs, indicating good value and conservative valuations. Across all sectors, the average value per property has increased, all of which are above our target minimum of ZAR 100 million per property. And as you can see, our valuation assumptions are very much in line with reported statistics in South Africa and relevant to the Western Cape. In addition, it's important to note that we do not value any bulk in the portfolio, of which, as I mentioned previously, we have around 150,000 square meters. By conservative estimates, considering a bulk value of ZAR 2,000 a square meter, that represents unrealized net asset value upside within our portfolio of around ZAR 300 million. We plan to unlock this bulk in hand as and when market factors determine. The underlying property portfolio is strong and has proven to be resilient despite ongoing tough trading conditions. And in this context, we are pleased with the performance of our portfolio. And whilst we remain hopeful that macroeconomic conditions improve, and interest rates start to decline, we will continue to focus on what we can control in order to grow and strengthen the existing underlying portfolio. Thank you very much. I'll hand back over to Quintin.

Thank you very much, Kim Okay. Just moving on to some ESG aspects of our business. I think the key focus for us since early 2018 was how we could place less reliance on fossil fuel generated electricity supply as well as the learnings of day 0, how we could augment the water demands that truly is a finite resource across our portfolio because effectively, that did present 2 very kind of strong risk items within our business, especially historically having exposure to the hospitality sector in the Western Cape. So where we are today? So currently, we have around 54% of our portfolio covered in PV solar. We are moving closer and closer to achieving that goal of getting to 60%. I think what's very important here is that the average penetration rate on the properties that have got solar are generating around 23% of the existing power demands. As I mentioned earlier, we bring on another 2.3 megawatt of solar through plant expansions at Mega Park, at Sable Square, at Nampak and at Waterhouse, which will again push up that megawatt generation capacity through the portfolio. This also doesn't yet take into account the fourth leg of what we call our 3-pronged funding approach, which will include wheeling into the not-too-distant future. And then if you take a zoom out and look across the 28-asset portfolio, we are generating, which includes assets with solar and assets without solar, around 18% of our total electricity demand is being generated from our PV solar panels and that will increase further to about 25% by the end of this calendar year, which, again, doesn't include the wheeling or the expansion of the Nampak facility. We also look for opportunities to leverage off of portfolio assets as well as our sustainability products to actually create a full circle through a social investment impact. So what does that mean? So our Radnor facility, which is tenanted on a long-term lease by super group. What we've done is we've donated the roof on that particular property and install the solar system on that roof, which is then rented back to a solar provider. We get a roof rental. That roof rental funds for a bursary for previously disadvantaged female studying property studies or property-related stream at UCT through the Women's property network Trust. And we'll be actually launching a second similar initiative on 26 Marine Drive, where the solar system, the inverters and all the operating and maintenance has been donated by our solar partners, and that will generate probably around ZAR 50,000, 60,000 a year, which will be channeled to the Home of Hope, which looks after abandoned babies in Sea Port. And for us, it's fantastic how we can leverage off of our real estate assets, placing invest reliance on fossil fuel-generated supply and actually also having a social impact within the portfolio. And I think that has given -- the sole opportunity has actually given us that space to operate. I think what's also quite interesting is that we've seen across the portfolio that we're starting to only scratch the surface now as to how much we can actually do with the solar. So only 2 of our assets are currently on an Eskom supply, but contrary to popular belief, there are departments within Eskom that actually do function quite well. So our 2 Blackheath assets, we've had robust engagements with the team from Eskom, and we are looking at some wheeling opportunities within Blackheath, but also through -- because the 2 properties are neighboring properties, one has a higher power user, one is a lower power user with a 15,000 square meter roof. We can actually almost kind of without actually physically wheeling it, we can just connect the 2 properties through an arterial session and actually start to leverage off of the 2 operations to the advantage of the business. Then maybe just an update for those who don't know, just how serious South Africa is taking the solar opportunity. So far, this year, we've imported as a nation, ZAR 50 billion worth of solar products into the country. Now just to put it in context, so the Medupi power station was built and designed to generate 4.7 gigawatts of power. That to date will cost the taxpayer ZAR 135 billion. That ZAR 50 billion worth of imported PV solar will generate 4.7 gigawatts. So it's just interesting that the private sector, again, is stepping up to solve a problem that was really created by poor governance and by corruption. And then maybe just to kind of talk a little bit further down the ESG line. We've also placed BE procurement and SLA generation at the forefront of our ESG strategy within the business. We do adopt a people planned profit approach and so much so that we've -- through an equity ownership model, we've transacted on broad-based black empowerment transactions, whereby Spear provides the guarantees for those transactions and then the shares get pledged back to the funders. And in addition to that, our CFO completed our first sustainability-linked bond in the last 12 months with Standard Bank. Thank you very much for the business. In addition to that, those come with KPIs. And those particular KPIs are linked to our PV solar strategy. So we can measure the generation, we can measure the performance of the systems and provide detailed feedback to the banks, which then give us an improved margin on our funding as to how these PV solar plants are operating. But in addition to that, BE procurement will also be a KPI that gets measured as we move from increasing our BE score card points on procurement from 11 points to 21 points in the last reporting period. So this is a very kind of brief summary. But I made a point earlier about all these solar panels are grid tied. Now the Mayor has been very vocal. We've entered into our first large-scale lease agreements with the city, not us, but the property sector where they lease roof space and reduce the kind of energy demand of the city. The second phase of that is a 500-megawatt dispatchable power tender, which is currently out, which will effectively remove load shedding between Stage 1 and Stage 4. Why is it important for us because we are 100% Western Cape based fund and having a commercial office portfolio of 131,000 square meters, we've already spent the money installing diesel generators. Now just an example on Waterhouse, 2.5 hours of battery autonomy will cost us in CapEx, about ZAR 5.5 million. Now what happens when we spend the CapEx and the city of Cape Town at the end of 2024 no longer is exposed to load shedding Stage 1 and Stage 4, it sits redundant. And it's impossible to recover that cost from your tenants. So you got to either choose a course of action. You either stick to the plan, which is a lease addendum where you recover a prorated cost of the diesel generator or you recover prorated cost of the batteries. But if there's no locating between Stage 1 and Stage 4, you've got a sunken CapEx cost. Yes, the generators have been paid for, but that's our rationale and kind of perspective. In addition to the other insurance-related specifications that you have to comply with when installing these batteries within your portfolio. And just moving on to the outlook. Things will be tougher for longer, but the old blue bills amongst this year, so we are tough guys. But also we're a team that are committed to seeing through the tougher trading environment. Things won't always be bad. Things work in ebbs and flows. And we do believe that next year is a very important year politically for this country, and I'd encourage all to vote for change and for the country to go in the right direction. And I think the Western Cape government has been a prime example of what happens when you're a good steward of what you've been given to manage. And we've seen that in our valuations. We've seen that in the general performance of the province. I think cost creep is something that will be a growth inhibitor as Christiaan pointed out, finance costs, diesel costs, insurance, et cetera, et cetera, which will continue for the short term, I think, absorb the top line growth, but it's not going to be a structural issue for us at Spear. I think the municipal and provincial infrastructure investment within the province will continue to propel the province forward, continuously attracting more and more investments, both from an FTI perspective as well as a local perspective, which will expand urban edges, which will continue to expand Spear's ecosystem, both into retail opportunities, industrial opportunities and mixed-use opportunities. Load shedding is a major threat to the country, from an economic perspective. And I think that it's something that is an indictment against the governing party. We remain optimistic that, that 500 megawatts especial power will come through by the end of 2024. And we remain optimistic that the rate hike cycle has kind of reached the top of its cycle, and we should, by all accounts, be recipient of some interest cost tailwinds into the future. But what can we control? We can control the day-to-day running of our business. We can engage with our tenants, we can manage our costs. And I think that's one thing that we see within our team is a deep investment into the long-term sustainability of Spear. So we count how many to trials we deploy, we count how many subtitles we deploy. And that's true. We actually take a lot of ownership within our business. I think the infrastructure investment across the province will create, as I say, growth opportunities within the subsectors that we choose to invest into. We don't have to own every property in Cape Town. We want to be very specific as to the investment criteria, the type of assets that we own are assets that will generate long-term returns for us, not just short-term returns. From an operating perspective, we've always operated with a high occupancy rate. It's been one of the hallmarks of our business since inception, and we will continue to deliver on that basis. And for many people, as I said, these private pension funds are giving us run for money as those real estate fundamentals continue to shift on a geographical basis. So just in terms of our guidance, things will, as I said, be tougher for longer. We've delivered on a DIPS negative growth for the first time since inception. But I do think compared to our peers, we've actually done a lot better. And it's not about us being better than them, but it's just these are facts of life in terms of the regional focus and the niche that we operate in. But we have delivered a distributable income of distribution per share growth of the 3.21%. For us, there's a lot of uncertainty going into the next 6 months. Factors that are outside of the operational metrics of the business. So we are hesitant to issue any further guidance for what will happen over the next 6 months. But as the market has come to become accustomed to, we do issue a detailed quarterly operating trading update to the market, which I think provides good insight as to where we are in the financial period, and we'll do exactly the same. But any guidance that does get provided will be informed and impacted by the effect of load shedding, reducing our vacancies within the portfolio that renewals are done in line with our forecast that we don't incur any major tenant failures and hand on heart right now, we don't have any of those concerns within our business that our tenants will successfully absorb these rising costs that we pass on to them. We don't see any further increases in the interest rate and that there's no civil unrest in Cape town or in South Africa. So any changes to these assumptions and I know it's quite a few qualifications, but these are facts that we have to operate within, will impact whatever guidance there will be that we put out. So that does bring us to the end of our presentation. Thank you all for attending. I'll just give us a few minutes to just see if there are any questions online. But while we're doing that, is there any questions from the floor? I think we have to put the air con on, it's getting a little bit little warm in here. We actually did it on purpose, so you wouldn't ask any questions. Okay. So if there are any questions off the floor, are there any questions - sorry, maybe just give you a name, where you're from.

Just give us your name. Where you from?

Thank you. Just sitting and listening to you, it's quite obvious to me and everybody else. This group is exceptionally well and professionally managed. Congratulations on that. I just have one question maybe for Kim. She mentioned an interesting thing about the bulk value that's not reflected in asset value of ZAR 300 million. What percentage of that would apply to Paarden Eiland, Marine? I wondered?

Well, it's probably on a net basis, probably about, I would say, give or take, 28,000 square meters on a net basis outside of existing GLA.

And what impact would that have on national Value?

Price of ZAR 11 the EUR 300 million. I haven't calculated it. Have you got no idea.