01 Sep - 4 min read

Voluntary pre-close investor update for the financial year ended 31 August 2021

Voluntary pre-close investor update for the financial year ended 31 August 2021

REBOSIS PROPERTY FUND LIMITED
Incorporated in the Republic of South Africa
(Registration number: 2010/003468/06)
JSE share code: REA      ISIN: ZAE000240552
JSE share code: REB      ISIN: ZAE000201687
(Approved as a REIT by the JSE)
(“Rebosis” or the “Group” or the “Company” or the “Fund”))

VOLUNTARY PRE-CLOSE    INVESTOR   UPDATE   FOR   THE   FINANCIAL   YEAR   ENDED
31 AUGUST 2021

MARKET OVERVIEW
Domestic economic activity increased during the year under review, with the
easing of hard economic lockdown restrictions, although coming off a low
base. Most retailers reported buoyant sales trends, led by sales in grocery
products and healthcare services despite the country moving back to an
adjusted alert level 4 because of third wave Covid-19 infections.

Tenant sustainability, especially in the entertainment and leisure sectors,
remains under pressure, exacerbated by above inflationary increases in
electricity and municipal charges and supply disruptions.

Damage to property during the large-scale riots and lootings in July 2021
negatively impacted confidence, with resultant further job losses expected
to impact on economic recovery and crime. Insurance premiums are expected to
increase substantially because of the riots.

IMPACT OF JULY RIOTS
Shareholders are advised that none of the Company’s retail assets reported
any instances of looting because of the July 2021 unrest.

In the commercial office portfolio, two ground floor retailers at Schreiner
Chambers and West Street Parkade were looted on 11 and 12 July 2021
respectively. The looting was negligible on small shops. None of the offices
were affected.

Management implemented a comprehensive crisis management response plan in
collaboration with its tenants, the South African Police Service, the taxi
associations operating from Rebosis’ malls, private security providers and
other stakeholders.

Rebosis continues to work closely with local law enforcement, security
providers, and other relevant parties to maintain the safety of customers
and tenants and to protect its properties. A strong police and security
presence is being maintained at all the Company’s assets.

Management wishes to express their thanks to the South African Police
Service, our teams on the ground, the various security providers and
especially the South African National Taxi Council (SANTACO) for their
ongoing support.

CAPITAL MANAGEMENT
Rebosis continues to enjoy the support of its funders and has been working
closely with funders in its strategy to deleverage the Fund. There has been
no material change to the Company’s balance sheet.

During the review period, the Company successfully extended expiring debt
facilities for a further six months to 28 February 2022 (see below for further
information).

Shareholders are referred to the most recent renewal of cautionary
announcement dated 16 August 2021, advising them that the Company had signed
non-disclosure agreements and was in negotiations with local and offshore
institutions and pension funds for a transaction that, if successfully
concluded, could fundamentally change the financial matrix of Rebosis. The
Company expects to announce further details on this transaction shortly.

Nedbank facilities:
Facility amount – R7.9 billion
Expired date – 31 August 2021
Extension – 6 months
New expiry – 28 February 2022

New all-in rate – 6.4% (weighted average rate)

The renewal of all other facilities is imminent.

Liquidity
Rebosis continued to meet all financial obligations over the period. Lower
interest rates have assisted the Fund to generate additional surplus cash
reserves, notwithstanding the negative impact on cash to accommodate tenants
in distress.

Rental concessions in first half of the financial year under review amounted
to R14 million and in the second half to R5 million respectively, comparing
favourably with rental concessions totalling R70 million granted in the 2020
financial year.

PORTFOLIO UPDATE
The office sector has performed consistently during the reporting period.
The Fund continues to benefit from its tenant exposure largely underpinned
by sovereign leases, proving its defensive nature during economic downturns.

We continue to collect 100% of government rental collections, which supported
the Fund collecting 108% of total rentals (including retail and arrears) for
the six months to 31 August 2021.

Collections on retail leases has increased much better than expected and
space take-up has also seen a significant improvement on the rebound of
retail turnovers.

In addition, focused asset management initiatives added new brands to the
Fund’s retail spectrum of top brands.

The entertainment sector is still lagging, led by cinemas in particular,
whilst the Food & Beverage sector has seen a big turnaround following the
easing of second and third wave lockdown restrictions.

CONCLUSION
Property sector short-term outlook
The immediate outlook for listed property remains uncertain as new variants
of the Covid-19 virus are being identified, with possible further waves of
the pandemic potentially leading to stricter lockdowns. Recovery remains
dependent on an expedient roll-out of vaccines.

Rebosis continues to operate as normal, meeting financial obligations,
generating surplus cash for the business and continuing to invest in value
accretive and defensive capex.
The Fund’s executive team has been bolstered with new incumbents who are
providing impetus and momentum to achieving the Company’s strategic
objectives.

Rebosis enters its closed period as of 01 September 2021. The Company’s
results for the financial year ended 31 August 2021 will be released on SENS
on or about 26 November 2021.

The information presented in this update has not been reviewed or reported
on by the Company’s external auditors.

1 September 2021

Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited

Date: 01-09-2021 08:34:00
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