Vukile Property Fund Limited (VKE) Earnings Call Transcript & Summary

Great. Good afternoon, everybody, and a very warm welcome to our results presentation. Thank you all for attending. And for those of you that are attending online, also a very warm welcome to you. If I can please ask any questions you have to please put into the chat and we'll address them at the end of the presentation. So as usual, I'd like to start off the presentation by really just contextualizing the group and where our numbers are. And let's just get this clicking through [indiscernible], there we are. So where are we sitting today as a group? We're sitting with about ZAR 40.3 billion worth of assets. We're operating only in the retail sector. As you know, we know what we do, and we do it well. We don't try and do too many things. We have got a great tenant mix. And I think that really gets to the quality of the cash flows coming through the business, which for us is always a definition of where quality lies in a property portfolio. So today, we're sitting with about 61% of our assets in Spain and the balance in South Africa. Just to look for a moment at the strategic listed investments, you'll notice that Lar España is now accounting for ZAR 3.5 billion of our overall assets. we have increased our stake in the past financial year. And then we've seen some very strong growth in the share price as well, which is up about 30%. But in total, we've got about 47% total return on our investment in Lar España. At the opposite end of the table, you've got Fairvest. We went into the financial year owning about 6% of the company. We sold down during the year at year-end, that was 2.5%, and then post year-end, we've sold the balance. So we are now out of that, no longer part of where we felt the strategic value has been a tremendous investment for us. And that money has partly been recycled into the increased stake in Lar España, and will also go into the rollout of our solar PV. So that is a bit of context around the group. Let's jump into the highlights for the year. And as you've seen in the commentary, an exceptionally strong result for the year. We're really happy with what we have been able to produce for the market, outperforming the upper end of the guidance that we had, so growth in FFO per share of 6.7% and growth in dividends coming in at 10.5%, and really driven by 2 very strong operating results, both in South Africa and in Spain, where I think the fundamentals are coming together superbly and really what we're seeing is the results of our consumer-led model, bringing increased footfall to the centers, driving sales, driving good performance for our tenants, and that is then translating into growing rentals and ultimately growing value for our shareholders. And Itu and Alfonso will talk you through that in a bit more detail. And then our balance sheet is looking very strong. A marginal reduction in LTV to 40.7%, but most importantly, is ZAR 5.3 billion worth of liquidity and that is ZAR 2.4 billion of cash balances and ZAR 2.9 billion of undrawn facilities. And that ZAR 2.4 billion of cash really is very important in the plans, we'll discuss a little bit later on. So before we get into the future-looking stuff, I'm going to ask Itu to come up and go through the SA numbers in more detail.

Thank you, Laurence. Good day, everyone. It really does give me a great pleasure to present the South African results for the period ended 31st of March 2024. The portfolio has really delivered an exceptional set of results in a continuously tough environment. And I think, to me, really showcasing the sense of nature of our portfolio composition. And also alongside focused asset management initiatives that we not only deployed in the past year, but I think that we've deployed diligently over time to deliver this positive sustained results. In terms of going into the highlights, focusing on the performance overview tab. You'll see that our net operating income has grown by 5.4%, really delighted with that result. Key to the sustained growth in the portfolio has been a very strong top line performance and continued tight cost management control within the portfolio. So perhaps let's go into some of the key highlights around the top line. Looking at the vacancies, we've seen very strong leasing activity over the past year. So our vacancies have decreased from 2% to 1.9%. These are the lowest vacancies we've ever had. And in addition to that, we've got 3 malls, which have retail offices on the first floor. If one were to strip out some of those retail office vacancies, the overall vacancies decreased to 1.2%, which is an effectively fully let result for the portfolio. About 2/3 of our malls have vacancies below 1,000 square meters and 1/3 of our portfolio is fully let. So really strong traction that you've seen in our leasing activity. We continue to see improvement in terms of our reversionary rate. You'll see that our reversions are up by 2.9% with 87% either positive or flat. To me, I think if one looks at the reversionary print with an increase from 2.3%. The key highlight is that the quality of the reversions is significantly stronger than what we've seen in the past. This is the best reversionary print in terms of quality that we've seen since 2018. We continue to see a steady increase in base rental [ those ] up by 6.6% and the sustained growth in our contractual escalations up at 6.3%. So really strong top line performance. And if I focus on our tenant profile, still talking to the top line, you'll see that our retention ratios improved from 93% to 94%. So really limiting downtime, and we're seeing an environment where retailers are looking to hold on to spaces that they have within our portfolio. And we've also seen that retailers are looking to sign longer-term leases. So our weighted average lease expiry has increased from 3.2 years to 3.5 years over the year, which is an indication of a positive retailer sentiment. So moving on to our net cost-to-income ratio. So looking at the cost base, we've maintained our cost-to-income ratio at 16.8%. If one looks at our long-term average since 2011, that cost-to-income ratio was 18%. So our cost-to-income ratio is lower than our long-term averages. We anticipate that as we roll out a lot more of our PB, we currently have 21.6 megawatt peak solar PV within the portfolio. We anticipate that in the next 36 months, that will increase to 40 megawatts. As we roll that out, we anticipate that our cost-to-income ratio will decrease by a further 100 basis points, which is a significant achievement in an environment where our costs are generally under pressure. We've also completed a whole lot of operational strategies to manage our costs such as we've revised our waste approach. We had a new waste management tender, which resulted in a decrease in our waste management costs. We've increased the level of smart meters that we have in the portfolio by 30%. The higher the smart meters are, the more you can measure, the more you can manage, the more you can recover. We've also installed a lot of water-saving facilities within the portfolio, which I'll touch on later on in the presentation. So focusing more on valuations in line with our net operating income growth of 5.4%. You'll see that our valuations are up at 5.8%, which is a pleasing result, still at a conservative value density of ZAR 20,200 per square meter. So very pleased with where the valuations have ended up. And then on our trading densities, we've seen an increase of trading densities by 2.4%, if one looks over the past 2 years, that's increased by 4.3%. I'll go into a bit of detail around the base effects that we saw last year to explain where we think these trading densities have landed up. So maybe just to summarize the key operating metrics, really pleased with both the top line performance in the portfolio, we've seen some significant traction there and also continued the discipline of managing our cost base to ensure that we not only decrease our cost base, but we manage it in a sustainable manner. The next slide speaks to the reason why we continue to perform in the way that we do, which is due to a well-positioned defensive portfolio composition, which remains mostly in the township rural and value segments, and we're well diversified across 8 of the 9 provinces. Key measures when I look at this slide is the interplay between the improvement in our tenant retention as well as our WALE, which really points to a picture of increased retailer sentiments and support towards the portfolio, which is encouraging. Also, when one looks at our average trading densities are lower into sales as well as our base rentals. There's a significant room still available, I think, in this portfolio for increased rentals. And then you'll see under the township column that our retail vacancies are 1.4%, there's still an opportunity that remains to decrease that further. We're currently doing quite a bit of work at 3 assets, Atlantis, Renbro and KwaMashu, where we're repositioning them. And once we've completed that repositioning exercise, we anticipate that those vacancies will decrease further. When I look at the portfolio, key value drivers over time, you'll see that there's been an improvement across the board. Our vacancies have, over the past 5 years, decreased from 3% to the 1.9%, steady increase in base rentals. I've spoken a little bit to our retail reversions, which have increased from 2.3% to 2.9%. But I really want to emphasize that the key story for me there is when you look at the blue table that shows a positive reversion. That's a 7% to 9%. And in the past 5 years, we haven't seen that level of positive reversions in terms of number of leases in the portfolio. Also on the flip side, we're only seeing 13% of negative reversions, so that direction is moving in a positive manner. Our contractual escalations at 6.3% on recent transactions. We've closed escalation at 6.4%. So even there, we're still seeing positive momentum in the portfolio. With regards to our retail performance and the trading environment, the portfolio has overall seen an increase in both footfall and sales. The base of our shopper support is significant. We see over -- well over 175 million visitors within our malls that generate over ZAR 24 billion worth of turnover. So the base is already sitting at a level, which is significantly high. We've seen 4 of our 5 segments that we manage and measure within the portfolio show increases in trading densities, with our township and urban portfolio showing the most consistent trade throughout the year. Assets in Gauteng, Western Cape and the Northwest were the best performing in terms of trading stats and footfall overall. And over the period of Jan and Feb, we saw the increase in load shedding during trading hours and that's somehow impacted some of our trade. But overall, still a positive print in terms of our turnovers over the year. With regards to our retail category performance, the portfolio is on this 2.4%. I really want to talk a little bit to the base effects that happened in [ KZN ] in the prior year. You'd remember that we had a few assets that were damaged in the riots in financial year '23. Those were reinstated. And last year, we saw significant turnover growth in [ KZN ], that was due to competitors in and around our areas, taking longer to reinstate. And therefore, the base was artificially high. So some of those as our competitors have opened have now kind of moved back and rebased. So if one had to exclude [ KZN ] anomaly, looking at our trading density, you'll see that our portfolio has grown by 4.3%. 10 of our 14 categories, which we measure within the portfolio have shown growth both on turnover and trading densities, health and beauty bottle stores and our pharmacies continue to be the best-performing segments within the portfolio. Our key insights, I think, is looking at our fashion and grocery categories. We saw 2 biggest categories growing at 0.9%, respectively, over the year. There's a significant divergence that's starting to form amongst winners and losers within these categories. For instance, within our fashion category, the overall category grew by 0.9%, but there was some winners that were up by 8% and some that were down by negative 11%. In the grocery space. There's some grocery anchors that are up by 8% to 10% and somewhat down by 3%. So I think looking at how we manage our portfolio, our deep data-driven MIS, analyzing underperformers, understanding our consumer will be a lot more discerning around the support of the winners in the categories that will show a growth trajectory. And then with regards to our leasing activity, this to me has been the key highlight of the past year, strong support from retailers. I actually think that our relationships with the retailers is probably the strongest that we've ever had since I've been at Vukile, we've really worked hard at [ boarding ] those relationships. We've seen strong support from our national and our mid-tier retailers over the year, both from a new deal perspective as well as renewals. The township and rural portfolio, once again, where most of our support came from, hence, the negligible vacancies that you see in that space. We continue to see significant support from our top 10 retailers and fashion contributed the most to our deals. If you focus on the graphic on the right, you'll see leases that we conclude at 609. We've increased the quantum of the deals that we've done in this year relative to last year from ZAR 1.4 billion to ZAR 1.5 billion. Our weighted average lease expiry has improved from 3.8% to 4.4%. So really seeing retailers sign longer-term leases within the portfolio. And when I look ahead in terms of the next 6 months and I look at our expiries and the retailers that are expiring over the next 6 months, you've definitely seen an environment of those retailers showing growth in trading densities, which should all go well for continued growth in our rental reversions. Customer centricity is a primary operational desire within our portfolio to really look to delight our consumers. In addition to the customer centricity scorecard that we shared with you at this point last year, we really look to explore a lot of different approaches in our customer centricity desk. Here, we explore looking at consumer Google reviews to really gauge the sentiment, allow consumers within the mall environment. We compare that with what we call shoppability, which is looking at loyalty dwell time using the technology that we have in the malls called access points. And once we understand the comparison between the reviews and shoppability, we then put together promotions that really speak to that. Therefore, the way that we look at it to really understand the sentiment of the shopper, we listen to what consumers say. We observe how they act and then we reward them with a call for action. So one of the key issues that came across in the past year is in East Rand Mall, and the Google reviews, we kept on seeing this issue of expensive parking. So we really explored this. We reviewed our tariffs. We introduced a flat fee after 2 hours. We upgraded our equipment. We run a lot more promotions that show how efficient and easy it is to use our parking. We restructured our parking. And we're now looking at our shoppability to potentially see that loyalty and dwell time increase over the next couple of months, which again speaks to this whole element of saying if the consumer is happy and the consumer is comfortable within the shopping environment, you should see the tenants benefit and the tenant benefits the valuation of the property increases. All right. On CSI, CSI is very important to how we do business. We really do believe in the adage that we had an island of prosperity and a sea of poverty. We really endeavored to work with our communities to combat social ills, particularly in the markets in which we operate in. To that effect, we spend between 15% to 20% of our marketing budget on CSI. This equates to about ZAR 2.5 million to ZAR 3 million a year. And we have done quite a few projects at our different malls and shopping centers, such as supporting senior citizens, women in youth, focusing on challenges around substance abuse and really assisting with unemployment. Dealing issues like CSI to us is critically important because we form forums that involve the communities that involve the counselors that involve community leaders that help us spend the budget that we have allocated. So when things like challenges, like the riots come up, you then build the report with the community, and it works out very well in terms of the community buying into the center. So we view our CSI approach and budget as part of our customer-centric approach. We also run specific promotions that speak to the markets in which we operate in. We don't have a cookie cutter where we run the same promotion across all of our malls. On the left-hand side, you'll see at Thavhani Mall, we ran in February, a very big campaign during the AFCON semifinal South Africa and Nigeria, where we -- the community really loves football, where we screened the football game. We then linked that to making sure that all of our food services trade later, they service the crowd that was there and then they get the orders and they deliver. So I think a symbiotic type approach that it shows that the more trades well but also provides a service to the community. Also ran a very successful campaign in Mdantsane. Mdantsane is known as a capital of boxing in South Africa, have over 25 international champions. We've set up what we call a hall of fame, where we've got a list of all of the champions that come from the township. And really, as you work inside the main entrance, a little more, you can really see everyone that they feel that the mall is part of the community because of such initiatives. And we do that at a lot of our malls. We really try and find promotions that speak to the [ populars ] and what they hold dear, and then we execute and run those promotions to ensure that the mall get support. Just delving deeper into our cost-to-income ratio. We have strategies for every line item that you see in our cost base. At our last results, we had a discussion around our rates and taxes. This time, we're focusing a lot more on our cleaning and security, which we recently went out on tender for. So the approach that we took was really to change our scope for -- that we went out on tender for. We learned a lot of lessons coming out of the riots in 2021 around making sure that you use a lot more technology, you lock down the mall. We've got innovative strategies around CCTV, facial recognition, biometrics, and all of that has decreased the overall cost of our [ self ] services in a sustainable manner. And here, we anticipate receiving a saving of close to 10% on our overall security and cleaning cost line item. We run these types of approaches for pretty much all of the line items. If you look at the table on the right, you'll see that in financial year 2013, our cost-to-income ratio was at 27.1 has now decreased to 16.8. So whatever strategy we put in place, we always just make sure that it's sustainable. And the leader currently in terms of managing our net expenses has been our solar PV strategy, which has worked out very well for us. So going into the solar strategy in terms of our energy and sustainability, we generate 18% of the portfolio's electricity through renewables. In March last year, we had 14.9 megs. That's now increased to 21.6. In the next year, it will increase further to 32.6. And we anticipate that by the end of financial year 2020, when we would have exhausted all of the roof space that we have within our malls, and we'll have 41.4 megawatt peak of solar PV on our roofs, also will account for 33% of our portfolio capacity, right? So the next frontier, once we've exhausted our roof space is really exploring wheeling. When one looks at PV tariffs, wheeling, Eskom and console tariffs, you'll see that this is a big opportunity for us to explore this. We're currently working on this 5-megawatt plant wheeling agreement. And once that's executed, we'll look to roll that out into the rest of the portfolio. And we're also very excited that we've launched our BESS system, 4.4-megawatt BESS, which we installed at Nonesi. It's now fully operational. We've got -- the malls got full backup, whether there's load shedding or there's not, there's still a benefit because we have a reduction in our overall demand charge, and it's been a sustainable way of us looking to intervene with some of the energy challenges, but to do it in a way that is sustainable looking forward. We continue to see around water deterioration in water across the country, so in 8 of the 9 provinces. So this is a big challenge that we're starting to see. As a team, we've made a strategic call to really look to build capacity in the space. So similar to how we did with our PV strategy 8 years ago. We've really bolted up to what it is at the moment. So we're spending a lot of time, effort, energy and thinking around strategically placing our water management in a way that gears this portfolio for sustainability into the future. So the strategy currently encompasses really looking at our water use licenses so that we can not only use our water that we get from boreholes for domestic use, but we can also use it for commercial use. We've drilled a lot more boreholes within the portfolio. We've supplemented that with filtration. And at this point in time, 91% of all of our malls have at least 3 days backup water across the portfolio. The one area where we've always felt is particularly vulnerable has been our rural portfolio. 100% of all of our rural assets have backup water. So that's already covered. We will continue putting a lot of effort into our water management. And we think just as we moved our electricity from a cost center to a profit center, the larger opportunity for us to look at water management and potentially move that into some sort of profit center as well. Just an update on Mall of Mthatha. So we've renamed BT Ngebs, which we bought and transferred in April 2024 to Mall of Mthatha. The transfer process took 18 months, quite a bit of time because we have quite a bit of town planning work to do to subdivide the earth of -- the same earth had the casino in the hotel and the mall, and we were just looking to purchase them all. The redevelopment is underway. We started it now in June. We will aim to have it completed by February 2025. We're looking to spend circa ZAR 100 million from a Vukile perspective. So the total cost of the redevelopment will be about ZAR 200 million. And what we're trying to achieve with the redevelopment is the rightsizing of tenants, a lot of the asset management work that we've done across the portfolio, improving flow, adding an additional anchor, setting up a lifestyle element because Mthatha, that's something that the community doesn't have. To date, we've concluded over 4,000 squares worth of deals, new deals above budget. If you look at the graphic where the Edgars is that entire box was Edgars. We've subdivided it into [indiscernible] that through rental on the entire box when we acquired the site was about ZAR 100. The entire box through rental now is at about ZAR 160. So that's the type of value add that we will look to add to this asset and really excited about [indiscernible] will take it into the future. With regards to valuations. We've got the 32 properties valued at ZAR 15 billion, as I said initially, a 5.8% increase in our valuation and a very conservative value density, I always just highlight when we get to the valuation tab that when you look at reasonability ticks, such as yield, you look at disposals versus book, you look at our correlation of our valuation growth and our NOI growth. You look at our value density versus our replacement costs. All of these measures consistently point to a conservatively valued portfolio. So we're very comfortable with where the portfolio is valued. And then looking forward, key focus areas are really to continue our tight operational focus. This is what wakes us up in the morning. This is what we do well. We'll continue looking to delight our customers and really have them come to our malls as a primary shopping destination, which will then result in us delivering our results. So maybe just to conclude before I hand over to Alfonso, the portfolio really continues to outperform. We're very pleased with the top line that the portfolio has delivered. We'll continue to look at managing our costs more efficient -- as efficiently as we've done in the past, and we'll continue to drive this desire to be a partner of choice in well-managed, well-positioned malls and all this being mindful of our consumer as a primary stakeholder. So without any further ado, thank you for your attention, and I'd like to call Alfonso to take us through Castellana.

So thank you, Itu. Congratulations again for such great performance in the South African portfolio. [Foreign Language] Good afternoon, everybody. Always happy to be back in South Africa, and I am always grateful with everyone's welcome and the goodbye by all we see here in South Africa. Well, I would like to highlight that I am especially proud of the group team that have made a great effort to produce this spectacular set of results for the year-end FY 2024. It looks like I have it by now, but let me tell you the consistently solid and positive Spanish results don't come alone or by miracle. There is a tremendous work and effort behind the scenes from a cohesive and extremely committed team with a clear purpose and mission to keep Castellana as a market leader. So jumping into the presentation as an economic update, I would like just to highlight some points quickly. Spanish economy since December has evolved quite positive. One of the European economy is most growing. It is expected for GDP to stay positive in this 2024, closing the year on 2.1% according to consensus last review of May. The strength of the labor market with the job occupancy figures growing and unemployment being kept at levels below 12% is keeping disposable income of the families at high levels. Adding to all this, that tourism in Spain broke a new record in 2023, surpassing 85 million foreign visitors, being this the other large driver of consumption in our country. Spain is keeping very healthy consumption growth rates, which is pushing the GDP to grow above most of the other European countries. Now that ECB is to start cutting interest rates, hopefully, tomorrow, we believe operations will remain very positive. And now that clouds over retail have dissipated, we are seeing a lot of opportunity coming to the market that we should be taking advantage of. Now moving to the key portfolio metrics. Here, I want to highlight the astonishing recurrent or normalized net operating income growth of 11% versus last year. This income growth and value-added projects remain to be the main drivers to keep rather a small growth in [ JV ] as valuers have kept increasing discount rates and exit yields. We'll see this later in a specific slide on valuation. We gave very defensive and healthy tenant profile with 95% of our tenant base being national and international best-in-class brands, with a very solid WALE of 12.6 years and still low OCRs and low average base rentals. Occupancy at 99% and collection rate over 99%, both ratios way above the sector benchmarks show high demand from tenants on our portfolio and a great performance of our rent collection team. As you can see, outstanding positive growth indicators, which allow us to keep signing leases and increase reversions, confirming the strength and solidity of our portfolio. And hence, the sustainability of our cash flows, which I think is the most important factor in real estate at the end. Now focusing on fundamental indicators of our business, footfall and sales. These indicators also show a fantastic performance. As advanced in our pre-closing session, we show here the recovery index that we started back in the pandemic. What we see in the graph is the evolution of footfall and sales during the financial year in reference to the previous record year pre-pandemic that was of 2019. We said so in December, when we presented half year results, that we anticipated another footfall record for the year-end. And indeed, footfall broke a new record during the period -- within the period with 45 million visits that is 5.5% higher than FY '23, which was already a record year. Sales in the period grew by 6.4%, keeping the positive tendency showed in the last 3 years. Shopping center sales grew a little bit more than retail parks as they were coming from a much higher base in the last 2 years. Focusing on sales. If we look at it by sectors, we see all categories growing substantially, all of them in very positive territory, especially our key categories by run rate such as fashion with 6.1% growth, healthy and beauty with almost 12% growth or cultural technology with an impressive 17%. Special mention also deserves F&B and leisure as our bet on increasing their weight in our shopping centers is confirming our strategy right. An outstanding result that reflects the efforts of the active asset management activities across the portfolio, on the completed and ongoing value-added projects that we have. At leasing activity level between April 1, 2023 and March 31 of this year, 182 rental transactions have been signed, 111 new contracts and 71 renewals involving an area of almost 34,000 square meters, which have led to a new and refreshed rent signed for a value of EUR 9.1 million per year and which results in a 9.3% increase in the average rent per square meter of these transacted units. Please note, as mentioned in past occasions, that figure does not include indexation, which will add in the coming months. We keep an enviable portfolio occupancy of 99% leading the market as well as leading rent collections rates, as I said before, above 99%, well above the industry average. Moving on. Here, we can see the gross rental income bridge in a like-for-like basis of the same portfolio and the same period of time, gross rentals have grown by almost 9% in comparative terms with respect to FY 2023. This gross income translated to an NOI growth of also 11% versus last financial year. At fully led capacity and the work in progress value-added projects completed, the portfolio should generate gross rental income of EUR 77 million annually. We expect this to come really in FY '26. As for the GAV bridge here, total growth for the period of 7.4% is made by 6% coming from the Lar España investment value increase and 1.4% growth in direct portfolio despite another hike in exit yields in our -- in this valuation cycle. So talking about valuation, as you know, Castellana is externally valued by Colliers, prestigious and renowned European valuation firm. They conduct valuation cycles every 6 months. Despite the increase of 1.4% in the portfolio for the period, the fact is that the value -- all the value that the team has been creating in terms of NOI growth along the periods, as it can be seen in the left-hand side graph, it's not being reflected into the valuations as yields, which are the largest driver of value at the end, have kept expanding as for the lack of transactions in the market. As shown in the graphs on the right in this slide, one can see that the increments on cap rates and exit yields since 2019 have gone up all the time. I have to say that our work in the assets, adding value and quality is already embedded in those deals that would have expanded much more in the case we left those assets unattended with no CapEx, no value-added repositioning projects. Hence, the current positive valuation results are a combination of increasing income and increasing quality of the assets that still translates in almost flat values that are set to increase when the market is back to normality and cap rates reduced, which should happen as soon as interest rates are cut. As I stated before, a great deal of our differentiation and, hence, great performance in footfall. And consequently, in sales is our customer-centric approach, by which we focus on what our communities demand and desire for people not only to come, but to repeat visit, stay longer, spend more and become fans of our shopping centers. On top, we insist on strengthening our shopping center as social engines. We continue to focus on bringing new events and experiences to our shopping centers that make our customers visit them forgettable moments. Proof of these are the 2 roadshow events you see there in the slide, the [ The Legend of Excalibur ], which toured the entire portfolio in 2023 with different shows, games and medieval activities, achieving a growth of 11.6% in attendance versus the same period of the previous year. And [ La Fabrica Chocolate ] or Willy Wonka, which is currently browsing our portfolio with impressive results. We have already achieved more than 153,000 visits in just 3 shopping centers, and the feedback from those who visited is more than satisfactory. The customer journey does not only happen in the shopping center. In our continued commitment to digitalization and innovation, Castellana Properties has launched in February 2024, a 2.0 update of its websites and apps. After this update, we can say that we have a pioneering tool in the industry in Spain. We think that we are in the right path towards digitalization and innovation, we have started our road to AI already in several aspects of our business. And I hope I can tell you more about it at the FY '25 half year results presentation. Also another differentiation factor of our business is how we care for assets and how we invest on them to increase income and improve their quality. As you know by now, we are always busy with accretive projects in the portfolio. We very much like them, and we believe that the market upsides how experienced we are on them. So our start project now is the reconfiguration of the former Hipercor in El Faro and is advancing well and in time with an investment of just about EUR 22 million, we create a new space of almost 18,000 square meters and will be generating EUR 2.5 million of additional NOI for -- at the same time that reinforcing El Faro with a more optimal tenant mix. As we speak, almost 100% of the space is already under head of terms, negotiating the new onset of the contracts. Already licensed and the works, we estimate to have it completed by December this year 2024. On Vallsur, first floor reconfiguration. This project will generate EUR 1 million extra NOI with a much better look on retail mix on the first floor. Phase 1 has already been completed, and we are seeing the results of what we envisioned. Highlight again the extraordinary performance of La ChismerÃa, the new food court area that opened in last December. Fully let and trading, it has impacted positively in the center that Vallsur has over passed already the 2019 figures of footfall in the last months. Thanks to it. Not only that, now that we are able to measure it, we've seen how Vallsur's dwell time has grown by 7% from last year as the food offer in La ChismerÃa is making customers to stay longer in the center. Phase 2 is progressing well with well advanced negotiations with several demanded fashion retailers such as Alvaro Moreno or Fifty Factory as anchors of the area. We expect for this Phase 2 to be open and trading by year-end. Third project already in motion is the second phase of Los Arcos, once completed Phase 1, and the next step coming from our customer surveys is to improve the F&B and leisure offer with an improvement in modernized area. We bought the MT office building at the front of the center back in 2021. And now we are ready for the integration of that space into the shopping center, creating a state-of-the-art leisure area that apart from increment in NOI, it will be transformative for the footfall and dwell time, which should also imply more and better sales, hence, value improvement. We are investing almost EUR 24 million here, transforming the center in the reference of the city of [indiscernible] and we will be completing this project by end of next year 2025. Now moving on to our investment in Lar España, it can be denied that this has been a clever and very accretive investment with a dividend yield for this period of almost 15%. Lar España in line with the industry, is publishing very solid results. It has delivered a total dividend of EUR 66.2 million this year from which Castellana has received already EUR 19 million for our 28.7% share on the company. With a strong balance sheet, reduced LTV and cash on hand, Lar is very well positioned for future growth opportunities and Castellana should benefit from. We continue to be long-term investors in Lar España expecting an attractive yield coming forward. and potential for capital growth through the narrowing of the discount on NAV now that market looks to be improving. Moving to on ESG, I'd like to highlight the work already done in such a small period of time that has already put Castellana on the ESG leaders list. In support of our commitment and excellence in ESG matters, we have the most notable certificates in the sector, which validate our performance and consolidate our position as leaders. During FY '24, we have designed a new strategy -- ESG strategy that will expand FY '25 to FY '29. In the environmental field, we have achieved excellent results, some of the most significant KPIs compared to the previous year, such as 88% less consumption of natural gas or 95% of the energy consumed comes from renewable sources. All of this, plus all the measures to be carried out going forward will be reflected in the FY '24 ESG report that we will be publishing during this month. Our commitment is very well reflected in the social part of our plan on sustainability. We continuously strengthen our commitment on supporting the communities around us, making social programs visible through innovative actions and initiatives to generate a positive impact in those regions in which we are present. In this FY 2024, our shopping centers have carried out a total of 165 social actions, and the total amount donated by Castellana surpasses EUR 310,000 in total. So now to end up, key focus areas. Well, operationally, we will continue to excel on operations and increasing income with a strong focus on the value-added projects that we have in motion. We have a stable funding position with no refinancing needed until FY '26. However, we have spotted now a very good opportunity to refinance West portfolio, which is our next maturity, and we are working to close it by end of July, the latest. We will continue to work on the diversification of funding sources going forward. On investments, we will continue to secure deals on the direct market. There is a clear window of opportunity for Castellana to grow accretively. And we continue to unlock maximum value on Lar España as well. And the -- we continue to develop and implementing our ESG and innovation strategies. And on the people side, we will keep up the marvelous climate and company culture already existing in our team. And we will implement the Castellana Talent Programme to keep evolving and improving processes and skills on the team. So with this, I end the Spanish part. Many thanks for your attention, and now I'll pass it over to Lizelle on the Treasury and Financials. Thank you.

Good afternoon, everyone. I'm very excited to be here today, not only because it's the first time that I'm presenting the Vukile results, but also because our FY '24 numbers are particularly positive. Vukile has delivered yet another set of strong financial results. We outperformed the upper end of our upgraded full year guidance, achieving a 10.5% growth in dividend per share and 6.7% growth in FFO per share. Our outperformance was underpinned by strong operational performance in South Africa and Spain and a higher-than-anticipated dividend from Lar España. Our income from Spain also benefited from the weaker Rand exchange rates against the Euro. Notwithstanding the impressive growth in dividend per share, our payout ratio as a percentage of total group FFO reduced slightly from 81% to 79%. We maintain our payout ratio at a level that ensures no tax leakage in South Africa and Spain and at a level that ensures that we retain cash for operational CapEx and ongoing reinvestment in the portfolio. As Itu mentioned, the South African retail portfolio, which accounts for 97% of the portfolio by value, delivered like-for-like growth in net operating income of 5.4%. Excluding the impact of exchange rate movements, Castellana's normalized net operating income increased by 11%, primarily due to positive rental reversions and accretion from value-added projects. Income from Castellana was further augmented by a weakening of the exchange rates. During the year, Castellana acquired an additional 3% shareholding in Lar España for EUR 15.5 million, increasing its shareholding to 28.7%. Lar España declared a dividend of EUR 0.79 per share for its financial year ending 31 December 2023. Included in the EUR 0.79 is an extraordinary dividend of EUR 0.09 per share that is attributable to 50% of the capital gains from asset sales. In FY '25, the EUR 0.70 ordinary dividend plus the EUR 0.09 extraordinary dividend will be included in our FFO in line with the cash received. No income from Lar España was included in Vukile and Castellana's IFRS income for FY '24, since Lar España only declared their dividend after the Vukile year-end. As such, income from Lar España of EUR 17 million is included in our FY '24 results by means of an accrual through a non-IFRS adjustment. This anomaly relating to the timing of the Lar España dividend declaration has resulted in a reduction of our IFRS profit. If in future years, Lar España continues to declare their dividends in April of each year, then the variance relating to the IFRS income from Lar España should normalize. During the year, Vukile also purchased various remaining shares in Castellana, increasing Vukile's interest from 89.8% to 99.5%. Vukile's increased shareholding has expanded our strategic options for the Spanish business and effectively increased Vukile's indirect stake in Lar España. We also continued our asset recycling strategy, exiting noncore assets and allocating the proceeds to assets aligned with our core strategy. During the year, we reduced our Fairvest's shareholding from 6% to 2.5% and fully exited our investments in Fairvest shortly after year-end. The year-on-year increase in corporate costs in both South Africa and Spain is mainly attributable to the rollout of marketing and advertising campaigns as well as staff-related costs. Apart from an inflationary increase, staff-related costs increased due to additional staff to facilitate succession planning. Net asset value per share increased by 5.2% to ZAR 21.55 as a result of strong operational performance and the increase in the fair value of our investment property. The 47% increase in Lar España share price also had a positive impact on the net asset value, coupled with the impact of foreign exchange rate movements. Vukile ended the year with cash in excess of ZAR 2 billion. One can see from the graph that cash from operating activities far exceeded the total annual dividend payment. During the year, ZAR 1.7 billion was raised from share issuances, part of which was used to exercise the call option to acquire the additional shares in Castellana from MEREV as well as to acquire an additional 2.5 million shares in Lar España. The strong cash position further supports Vukile's balance sheet, which is very well positioned for growth. The ratio of cash and undrawn committed facilities to debts expiring in the next 12 months is 6.4x, which demonstrates Vukile's strong liquidity position with more than sufficient cash to repay debt expiring over the next 12 months, if required. Despite a challenging market with persistent high interest rates, we closed the year with the sound balance sheet, well-managed finances and solid credit metrics. GCR reaffirmed Vukile's long-term credit rating of AA and Fitch reaffirmed Castellana's rating of BBB-, which is an international investment-grade rating. During the year, our interest rate hedge ratio reduced from 89% to 59%, primarily due to the expiry of the fix relating to the syndicated loan in Castellana of EUR 256 million. Terms regarding the refinancing of the loan has been finalized with implementation expected in Q3 of this year, which would be 12 months prior to expiring of the debt. The intention would be to fix the loan. As such, post the refinance, the hedging ratio will exceed 75%. We're therefore comfortable that the lower hedge ratio is temporary in nature. For FY '24, the group's average cost of funding increased from 5.3% to 5.5% as a result of increased base rates in both South Africa and Spain and due to Castellana's fix that expired in September. For the same reason, there was a reduction in interest cover ratio to 2.3x. We continue to monitor interest rates closely. And while they appear to be staying high for longer, we are doing well to manage interest rate risk through the peak of the interest rate cycle. At year-end, consolidated group loan to value was 40.7%, which is comfortably within our covenant levels of 50% for South Africa and 65% in Spain. It is important to note that Castellana's debt has no recourse to the Vukile balance sheet. And Castellana's assets would need to undergo an aggregate 40% reduction in valuation before reaching Castellana's 65% LTV covenant. The reduction in group loan-to-value was primarily as a result of the ZAR 1.7 billion equity issuances during the year, the increase in property valuations and the 47% increase in share price of Lar España. A detailed sensitivity of the LTV to both property valuations and foreign exchange rate movements can be found in the appendix on Slide 118. Vukile is well positioned for growth through the lower LTV and strong liquidity. As part of the group's funding strategy, Vukile proactively manages its debt expiry profile, which is currently at 2.9 years, with only 4.4% of group debt expiring in FY '25. On this graph, the large green bar in FY '26 relates to Castellana's syndicated loan, which is in the process of being refinanced. Post the refinance, the next Castellana debt maturity will only be in FY '21. During the year, Vukile successfully concluded 2 oversubscribed and secured bond issuances. In August, we raised ZAR 526 million at margins better than guidance. In February, we then raised a further ZAR 1 billion through a well-supported bond issuance, achieving Vukile's lowest margins since launching the DCM program in 2012. As part of the February bond issuance, Vukile also issued a 7-year bond for the very first time. In conclusion, balance sheet and treasury risk management remains one of Vukile's key focus areas. Our debt funding is well diversified across several funders in line with the group strategy to manage concentration risk and refinance risk. Vukile and Castellana continue to benefit from very strong relationships with our funding providers who continue to be highly supportive of our growth strategy, both locally and abroad. Post year-end, ZAR 1.1 billion of funding was restructured through an innovative green loan and sustainability linked loan with Absa, aligning our funding strategy with our ESG goals. On that note, I'd like to hand over to Laurence to take us through the strategy and a transaction update.

Thanks, and congratulations on your maiden set of results, and we look forward to many more presentations and even better results. So thank you. Let's start off quickly on ESG. I'm very pleased to say that ESG has really become embedded in the operations of Vukile. We've made very good progress over the year across all 3 pillars. And that's in both markets in South Africa and Spain. Itu has already spoken about the achievements and objectives in South Africa in terms of PV. In Castellana, we started a joint venture called Castellana Green, that will have its first plant up and running in the second half of this year. Water, as we've mentioned, is becoming a greater concern. I think we're trying to manage that proactively and have made very good progress in that regard. And then from a Spanish portfolio point of view, all the assets are being certified. From a social perspective, I think the highlight for us is always our Vukile Academy. We're exceptionally proud of the 100% placement record of everybody who's been through our program. And then to continue contributing towards the growth of the industry by providing in excess of 50 scholarships per annum for people in final property studies. BEE level improved to Level 3 in the year. And then as we've spoken about, we really feel that one of our key differentiators is our culture and values in Vukile. And I think a testament to that is the result of the Deloitte survey that gives ethics parameter and the Great Place to Work certification in Castellana. From a governance perspective, the Board refresh process is well underway with the latest appointment of Neo Dongwana and now we are able to start rolling off longer-standing directors, and that will happen over the next couple of years. Good transformation at a Board level with 60% of our non-execs being black, 50% of whom are female. Castellana, a very good progress on GRESB getting a 4 out of 5 star rating and improvements on the SA portfolio as well. So I'd now like to move on to strategy and the plans going forward. But to do that, I'd like to take a step back and look back briefly at the last 20 years since Vukile has listed, and just run through a bit of the history as to how we've got to where we are. And I think it's very important because it highlights our strategy in action, what we have been doing and how we have now laid the foundation for what we see as the plans going forward. So Vukile listed 20 years ago in June 2004, with a portfolio of ZAR 3 billion, and that was spun out of Sanlam, what was really a diversified portfolio of B- and C grade buildings. In 2011, we had a look at the business and said, really, we needed to take the business in a new direction. And that is when we crafted what we call the Awakened the Potential Within strategy. And that had 6 components to it. Number one was to increase the scale of the business, grow the GAV to around ZAR 10 billion, which is what we felt at the time would be needed to be relevant. Go overweight the retail sector, which we've always felt has been the best performing sector in South Africa. We're also very big believers in specialization as opposed to diversified funds, improving the quality of the portfolio. When I joined, I think we had an average asset size of ZAR 70 million. Today, it's ZAR 470 million in South Africa and ZAR 1.2 billion in Spain. We needed to maintain a strong balance sheet, which we've done, keep growing the earnings, which we've done every year other than the COVID year, but we have paid dividends in every year in the past 20. And also grow our investor base where we initially had an overweight weighting from Sanlam, it held, I think, around 50% of the fund, and we've now got a blue-chip shareholder register. Very pleased to say that every one of these objectives has been met, and you'll see how that progresses over time. 2014, I think was sort of the first year that we got to the kind of scale that we're talking about of ZAR 10 billion. But I'd say that the sort of most significant things happening in that year was the acquisition of the 34% of Synergy Income Fund. And that was the first time Vukile is sort of playing in corporate activity. And I think very important because you'll recall at the time, we said it will take us time to unlock the value in this asset, but we've secured a great portfolio, and we will unlock the value with patients and moving forward. And you'll see how that has played out. Also the 32% stake in service, which has been a tremendous investment for us over the years. We acquired 50% of East Rand Mall and also did our BEE deal with Encha, who continued to be very committed partners of ours. Moving on then to 2016, and 2 important things here. First, you have a look on the top pie chart how you can now see retail has gone overweight. So we've now ticked the box of size of the portfolio at ZAR 16 billion, and we're overweight the retail sector. That is also the time in which we started saying, well, how about expanding the business offshore. And we were able to acquire the stake in Atlantic Leaf, which at the time we thought was going to be the vehicle that we would use for growth offshore. We also continue to acquire in South Africa being the Moruleng, Nonesi and Bedworth. And then we come on to 2017, which I think is probably the most significant year in the history of Vukile. And that is because 2 major things happened in that year. Number one is we took the strategic decision, I think, ahead of the market to exit the office and industrial sector completely. And we did that by implementing a landmark transaction, what we call the Synergy/Gemgro asset swap deal. So what we had at the time was Synergy, which was 100% retail. We bought those assets into Vukile, and we paid for them with the office and industrial assets that we put into Gemgro together with Arrowhead. That then ultimately led to the merger of Arrowhead and Gemgro that we were quite involved in and ultimately, then to the merger of Fairvest and Arrowhead, which were, again, very involved in behind the scenes and now, ultimately, our exit. So really what you're seeing is the patience that we've taken in buying Synergy and unlocking the value, assets such as Maluti, Gugulethu where assets that came out of the Synergy portfolio, and that was very good. Now that's important because really what it shows is that we are very comfortable in the deal environment, in corporate finance, and we have patiences. We don't believe in having to rush deals. It's about getting the right deals and taking time to unlock the value. The other key issue that took place at the time in 2017 was the decision to enter the Spanish market. And if I were to summarize what the investment case was, it was going into an environment that had a strong macroeconomic recovery, forecast to outperform the EU in terms of GDP growth, personal consumption expenditure, also unemployment starting to drop from a peak of around 24%, 25% and growing tourism. You also have a market that is very fragmented from an ownership perspective. And we felt that if we could enter the market and be a consolidator and buy under-managed assets and add value to them with our bottom-up property expertise that we've done in South Africa, we could create a winning strategy in Spain. And we then acquired 87% of the fledging Castellana, which at the time, was an office in 2 small office assets, and the story will continue on the next slide. What you can now see in 2018 is really how we start achieving many of the goals we set for ourselves. So the fund is now 95% retail. You can see how that's taking place. You can start seeing the growth of the offshore exposure. And that is the debut acquisition of our 11 retail parks in Spain followed up with 2 smaller assets. And at the same time, we hired Alfonso and some colleagues as the Castellana team. And it's quite amazing and a source of great pride for us to sit down and say we really started in 2018. Today is now the fifth largest landlord in Spain with a phenomenal portfolio and exceptional track record leading the market in terms of performance. What's also very important to look out for here is that we've never taken our eye off the South African market. We continued with the major redevelopments on Maluti and PineCrest, and also acquired 33% of Thavani Mall. 2019, I think, is when the scale starts coming into the Spanish strategy. That was the EUR 500 million acquisition of the 4 assets from [ Unibail ]. At the time, there were questions of saying, could we be able to add value to assets being bought from such a sophisticated player in the market. And I think when one looks at the assets today, and you see the value that our funds on the team have added to them, you can see that we really have been able to add value to those assets. But again, strategically, you can now see almost 100% retail and 45% of the assets offshore. And again, continue to look to buy the right assets in South Africa as we did with Colonnade which has been a great investment for us. And that then brings us to where we are today. ZAR 40.3 billion of assets, almost 100% retail, 61% of the assets offshore, and that includes our 28.7% stake in Castellana, which provides a lot of optionality. So all in all, I think what you can see is that as a team, when we set a strategy and say what we're going to deliver on, we make sure that we deliver on that. And I think this set of graphs shows that very clearly how we went from a diversified fund to pure retail, small player to a much more substantial player with a very large component offshore. And now the platform is very well established for us to take our retail focus, our consumer-led model, strong operational metrics, clear strategic direction and look to launch the next phase of that growth strategy. So what is that next phase and what does that look like? Well, number one, the strategy is to be a consumer-focused retail real estate business. Our consumer-led model is what we think sets us apart to some other players in the market. And really, it's as simple as this. By focusing on the consumers and the communities that we service. We understand what those needs are. We look to meet and exceed those needs by providing great places for them to come and visit. That, in turn, provides a great place for our tenants to thrive in. And as they do so, their performance improves, their profitability improves, and that then creates opportunity for us to drive rental growth, which is really what you've seen in these results. And that, in turn, drives value for our shareholders. So ultimately, this is a strategy that is a scalable strategy. It can be applied in any market that we move into. We need to make sure then that we just focus on that local consumer, understand that consumer, but you can see then how the strategy is scalable and can be moved into multiple markets. So we've got a very clear and consistent strategy. So what do we do? We apply that to the core portfolio in South Africa and Spain, make sure we keep delivering great results. And then we keep looking for opportunities to grow and expand the business. In South Africa, we've got Mall of Mthatha and Bedworth currently undergoing upgrades. We do have an appetite to grow further in South Africa, but all deals, and you've heard me say this often need to be strategically aligned and financially accretive. At the moment, we are not finding the financial accretion in the South African market, and we are finding deals that are very attractive properties, but the yields are too tight relative to our cost of capital, and we have to walk away from them in some instances because of property fundamentals. But I'd say, of that ZAR 7 billion, ZAR 5 billion has been simply because the economics don't work, given our cost of capital. In Spain, Alfonso has mentioned the upgrades at some of the key assets. Lar España, continue looking to drive value and opportunities there. But in the meantime, we're getting a tremendous return through dividends and capital growth on that. We do have an appetite to grow further in Spain by looking for bolt-on acquisitions. I'm going to talk a bit more about that on the next slide. And we certainly are seeing very good deal flow in the market. We believe this is the ideal time in the cycle to invest. The question is, are we going to be able to find capital to be able to take advantage of those opportunities. I think that's a challenge facing not only Vukile, but the property sector as a whole. And then let's talk for a moment on expanding our landscape because that has been quite topical of late. I think the market is aware that we had put in an offer proposal on taking out capital in regional. We've had to withdraw that because we're unable to reach terms with Growthpoint being the major shareholder. But we certainly are looking to expand our platform. It's not a question of growing at all costs. If we find the right opportunities, we find the right platforms, we will look to potentially enter some additional markets, mainly focused on Western Europe and the U.K. I think it's important to say that it's highly unlikely that we're going to be going into Eastern Europe. I think as the investment community, you have enough choice in that space, we're not going to add anything to that environment. So we're going to try and focus more on Western Europe. And the idea really is to say, can we replicate Castellana's model and success in new markets. And I think off the back of what we've achieved in Castellana, I'm sure you'll agree that we've earned our rights to -- earn the right to look at those opportunities. So what are we looking at then in a bit more detail. South Africa, as I've said, we've walked away from the majority of the assets, the yields just being too tight. In Spain, Castellana is currently evaluating some individual asset purchases, one of which is in due diligence at the moment. We're looking at a model of using around 35% to 40% senior debt on a deal, and that should allow us to target cash-on-cash yields of 9% to 10%, which if you then consider our current cost of equity and what we raised money at in February will give us a deal that is sort of neutral to accretive in year 1. Ideally, we're looking for high-quality bolt-on acquisitions that further strengthen our shopping center offering; assets with strong, predictable and stable income streams and with the opportunity to add value in the short-to-medium term through active asset management. We've also started recycling some assets. So we had sold our 2 office assets previously. We've now sold the Mejostilla Retail Park for EUR 8.6 million, a small asset but comfortably achieving fair value, in fact, slightly above our book value on that. And net proceeds, not particularly large, but those will be recycled into the value-add projects that we currently have. Turning to offshore territories. We are currently evaluating some assets in Portugal on which we have exclusivity. And if concluded, this transaction would provide a very good strategic entry point for Castellana into its neighboring market, where there is a very strong shopping center culture. And we really feel that if we are able to use these assets as a springboard, we can grow Castellana to become the leading retail player in Iberia. That's really the objective. In terms of the U.K., just to sort of say that having withdrawn the offer for Capital & Regional, there currently isn't anything on their agenda in terms of the U.K. that we are evaluating. So really, when you look at sort of what do we need to do in the year ahead, it's as always, making sure we meet and exceed our customers' needs, make sure we have that laser focus on operational results, keep delivering results, being a responsible corporate citizen, maintaining our strong and unique culture. And most importantly, delivering sustained earnings and dividend growth for investors. And making sure that we are investment ready, we have a keen focus on capital allocation and doing deals that are strategically aligned and financially accretive. So before moving on to the prospects for the year, let me just pause for a moment and talk on our approach on dividends. So number one, as Lizelle has mentioned, our key focus is to make sure that we remain tax neutral in looking at our payout ratio in any particular year. Within that, we will retain an element of flexibility with our payout ratio generally being in the range of 80% to 85%. And you'll notice in the guidance that we've given for this year of growth in dividends of 4% to 6% that we will marginally increase our payout ratio, but still staying within that range of 80% to 85%. And by doing that, we are still able to comfortably retain sufficient cash to meet our CapEx requirements in both South Africa and Spain. The retention ratio, important just to focus on that is not really a driver of deal activity. The amount of cash that one can retain doesn't actually allow you to pursue the kind of opportunities that we feel are important. Again, remembering average asset size in South Africa is ZAR 470 million, in Spain is about EUR 60 million. So to that end, given the deal flow that we are seeing, we've decided that we'll offer a DRIP for the FY '24 final dividend. We haven't done a DRIP for many, many years, but we feel just that because we have this deal opportunity, this might be a good opportunity to give shareholders the choice and that might allow us to retain more significant amounts of cash that can then be deployed into opportunities. But I do want to make 2 caveats around that. Number one, it doesn't mean that we -- because we're doing a DRIP now, it's going to be a permanent feature in our capital structure. We're going to use DRIPs tactically and not necessarily to shore up the balance sheet. But tactically, when we think we can use it to effectively raise money for new opportunities, we will look to use a DRIP. The second thing is that we're not going to be offering DRIPs at deep discounts to prevailing spot prices. So anybody who thinks that they can sort of expect a big discount there, you will be disappointed. It's not going to happen. Why? Because ultimately, we're going to use a DRIP as a way of raising money for an acquisition, and therefore, it's imperative that we keep the cost of capital on any new shares issued under a DRIP in line with where we see the acquisition opportunities going forward. So with that, let's move on to prospects. I'm really proud to say that coming off the back of a very strong set of results, this year we're able to continue the growth story, and we'll get in, as we said, growth in FFO per share between 2% to 4% and growth dividend per share between 4% to 6%. Just to unpack that a little bit, I think a question has been, off the back of our strong results, can we keep the growth going? The answer is a very definitive, yes. If you have a look at the growth in NOI included in our forecast is growth of between 5% to 7%, which is very, very strong. You've got the -- sorry, the Lar España dividend that Lizelle has spoken about. And then what pulls the numbers back slightly, is something that we've spoken about before, and that is the reset of the interest rates on the ZAR 256 million loan, which was in this past financial year only for 6 months and will be in the new financial year for a full 12 months. And that sort of ends up with the numbers being around 2% to 4% for FFO -- and 4% to 6% for dividend. As always, with the growing importance of the offshore side of the business, our exchange rate assumption currently is ZAR 20.05 in the numbers. And that does provide an element of variability in FFO. But remember, the dividend is 100% hedged, and that number shouldn't change. So overall, we should deliver FFO between ZAR 1.57 and ZAR 1.60 per share and a full year dividend between ZAR 1.29 and ZAR 1.32 per share. So just to end off, I really believe that Vukile is in excellent shape and very pleased to again forecast further growth coming off a high base. We're standing here with a very clear and scalable strategic direction. We have a strong pipeline of accretive acquisitions that we are evaluating against our well-known discipline of capital allocation. We have a strong balance sheet. And most importantly, we have a team of dedicated colleagues that can deliver against our objectives and where we say we're going to grow as we have historically, we plan to grow going forward. So I'd like to now just end off by again thanking all of our key stakeholders, many of whom are in the room and then open up to questions from the floor and from the online panel. My colleagues can join me on the stage. Any questions from the floor? Louisa , you have got questions from the podcast, videocast?

We do have a few questions. The first question is from Mweishö Nene of SBG Securities. He's asked for your thoughts on the decreasing ICRs across the sector as well as your own portfolio. He wants to know if you feel that covenants may be adjusted downwards as a result.

Mweishö, thanks for the question. Yes, I think, look, that's something I think that's going to be evident in property worldwide as an asset class because as you see sort of debt being restructured and refinanced and remember, on the global scene, 2025, 2026 has got a tremendous amount of refinance to be done and to a large degree, that's why we're doing the aerial refinance early to get out ahead of that. What that's going to do though, overall is push up your cost of finance. Your income is not necessarily going to grow at the same level. So therefore, the ICRs are going to come down. I don't think the banks are going to necessarily reset them. But I think the issue to look at is what we always talk about, and that is to say, what is the headroom that you've got in terms of growth of movement in that ratio towards covenant breach. And that is very much of a risk management mindset as to how you look at that. In our cost, there's very significant headroom on that. So I don't see that as being a problem or challenge for us. But overall, to your question, I also don't see banks lowering those covenants.

The next question is from [indiscernible] of Anchor Stockbrokers. He said, thanks for the presentation. Any update on your conversations of Pick n Pay regarding core corporate and franchise store performance? And then how do you plan to help them turn around underperforming stores? And how are Boxer stores performing?

Itu, would you take that, please?

Yes. I mean, I think when it comes to Pick n Pay, the approach to discuss in Pick n Pay has to be balanced and I think responsible. So I think as a point of departure, firstly, Pick n Pay is currently paying all of the rentals. They're not in arrears. They're delivering with regards to the obligations. We're working very hard with Pick n Pay at an operational level in terms of increasing sales, promotional activities. We've also done quite a bit of work with the Boxer teams and the Pick n Pay teams in terms of potential changes to 1 or 2 boxes within our portfolio. So I'd answer that question to say, what's in the public domain around performance of Pick n Pay versus Boxer is perhaps what we've seen merit in our portfolio. But to stress that we've got a very good working relationship with them, we're working closely to try and turn around their fortunes. And we're working jointly with their professional teams to design any such changes. And at this point in time, there are no big alarming bulbs around arrears, lack of payments, and we'll continue working with them to see how we can assist them at this point.

The next question is from Mweishö Nene of SBG Securities. He asked you to please explain what the crime percentage means in the shoppability slide. And then secondly, he has asked if there have been any security changes or word-of-mouth updates in cast it is in recently.

Sure. Also, the crime percentage on that slide refers to what is recorded on what they call an OB book. So it's an Occurrence book of any crime occurrence that happens in the mall. So what we've done there, we've compared all occurrences of crime this year relative to last year, and that's where you'll see the downward trend on a percentage level. So that's the one question. And I guess on [indiscernible] and I'd probably look at it broader to say pre-elections, during elections, post elections, what have we seen on the ground. We've really intensified our security approach from an Intel perspective, working closely with our security providers. The security environment has been calm. We haven't had significant challenges or issues in all of the provinces. We remain on high alert, particularly in the next 2 weeks. But at this point in time, there's no big security threats that we are seeing in the portfolio.

There's a similar question from Luqman Hamid of 91. It's just come in. You've partially answered it, but the second part of his question was around whether [indiscernible] enforced a minimum loss ratio on the portfolio.

Yes. I mean [indiscernible] sets a limit for the portfolio, which is something that has been widely publicized. The way that we've looked to manage that limitation is more around risk management. We've really worked close because if you can't pass on the risk, the best thing to do is then to look to manage it. What we've done is work very closely with our security service providers to be first in line if there were to be some sort of eventuality around unrest, and we've got a contractual obligation that we formed with one of the big security service providers to assist us and be on standby. So the way that we've managed it is more around the risk management side of angle, and we're suitably comfortable that our portfolio broadly is well covered for any risks that may occur.

And so can I maybe just add 2 points on that. The cover limit is ZAR 500 million per portfolio. Now if you put that into context of what we experienced during June '21, that came to about ZAR 240 million, I think, in round numbers. And that was with the number of malls that were impacted. So it's a very difficult kind of risk to quantify because you don't know how many malls are going to get hit and you don't know how many malls to what extent. But I think in what was a very dire situation in '21 to have incurred the ZAR 250-odd million damage, I think, shows you that we do have sufficient cover at the ZAR 500 million. We have also explored alternatives in the Lloyd's market. We felt it was way too expensive, not effective, and we had serious concerns about whether those policies will respond. And in all events, we'll do so only after [indiscernible] kicked in. So long story short, I think we are adequately covered based on historical experience and the risk management plan that Itu and the team have put in place.

The next question from Mweishö Nene of SBG Securities. You mentioned notable additional staff costs for succession planning. Is it possible to expand on this?

Sure. Mweishö, so we had some staff members in our finance team and our MIS team. You hear me talk about that a lot, who have been with us for, in fact, since [ prebook early days ] who are retiring. And we brought some additional staff on board to make sure there was a good healthy handover between them. So when they did retire, which happened at the end of March, I will continue seamlessly and that has all taken place. So that is really what it was about.

Thank you, Laurence. The next question from Nazeem Shamshudin of Investec. He says in reference to Slide 63, and challenging access to capital. He asked if that includes the 29% stake in Lar as a source of capital.

Nazeem, I don't think that, that would immediately be on our list of capital. You are right in the question of saying potentially it's currency as we've used Fairvest for currency. But I think at this stage of the game, it wouldn't be a priority for us to use that. On the contrary, we'd rather trying to see how we use that 29% to take the business to another level. So that sort of is not really high up on the agenda as capital, but that can always change in time. Today, it's not an angle we're pursuing.

Okay. And keeping with Lar, a question from Luqman Hamid of 91. He asked if you can confirm whether you'll be accruing $0.70 per share or $0.79 per share for the Lar dividend in FY '25?

I'm going to ask Lizelle to take that.

We're accruing the ordinary dividend of $0.70 per share, plus the $0.09 extraordinary dividend. So in total, it's $0.79 for FY '25.

Thank you Lizelle. Next question from Luqman Hamid as well from 91. You said almost half of the SA hedge books rolled off in FY '25, can you advise on the average level of the expiring hedges?

So in terms of SA debt, 76% of SA debt is hedged, which is our SA ZAR debt and our SA EURO debt. And we're sitting with a 2.2-year fixed-rate maturity. And at the moment, all our hedges are in the money.

The next question is from Lwando Ngubentombi from Anchor Stockbrokers. He says on the group's pursuit into Western Europe territories, what type of assets is the group planning to add, community malls or super regional malls?

Well, I think we sort of feel more comfortable in the community, convenience type mall sort of more needs-based shopping versus once. But I think it's about sort of where you find the opportunity. I always say we try and keep a broader net in terms of looking at opportunities and then doing the filtering. But generally speaking, the super regionals are going to much larger ticket sizes and much lower yields. And therefore, I think it makes it highly unlikely that that's going to be the route that we're going to go down. It's probably going to be more similar types of assets to what you've seen in Castellana, what you've seen in South Africa. We do well out of those types of assets.

And now the similar question from Lwando. We have in the past seen other listed property companies exit Western Europe entirely for Eastern Europe territories like Romania, for example. How is management thinking about Romania, which seems to be underpenetrated for malls in his opinion.

Lwando, I think it's what we said at the very beginning when we went into Spain. We just didn't feel that we could go and add anything to the Eastern European story. It's very well covered by great South African companies that are there. And we'd be sort of a new entrant coming in at a very small level. So it's currently not on our agenda. It's an interesting point because, yes, I think Eastern Europe may have higher growth, but I think it does come at a higher risk as well. And that is really just reflected in the southern yield spread between Western and Eastern European countries of around 300 to 400 basis points. So we feel that if one is able to buy and what's potentially lower risk environment at very attractive prices, that is where we should be looking at the moment.

Thank you,. That's all from the webcast for now. Perhaps you can check if there are any more from the floor.

Any questions here? Not. Great. Then, thank you. Let me once again thank everybody for your attendance. We really appreciate it. Please join us outside for some snacks.