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Exemplar REITail delivers double-digit dividend growth of 11.9% per share

Exemplar REITail records solid double-digit dividend growth of 11.9%, with a full year dividend of 92,27 cents.

Exemplar is widely regarded as a market-leading retail REIT within the specialised “township & rural” niche that it operates. With a sole focus on the underserviced rural and township areas, Exemplar’s 22 retail assets (349,759sqm GLA) service between 10 and 15 million shoppers a month, offering investors access to a unique portfolio valued at R5,789b.

The company has achieved a distribution of 92,27 cents per share for the year ended 29 February 2020 against a forecast of 91,27 cents. In a market dominated by unfavourable macro-economic conditions, these results speak volumes about both the defensive nature of the Exemplar portfolio and the strength of the team managing it.

“As we brace ourselves for the uncertainty that lies ahead in the post COVID-19 environment, we are confident in our ability to read the landscape and rapidly adapt to any change in order to continue evolving for the needs of our customers and our country,” explains CEO of Exemplar, Jason McCormick.

“Our primary focus in the first half of FY2021 will be ensuring the sustainability of our existing portfolio and the tenants within it. We will continue to identify and implement effective strategies for the safety of our communities and the regeneration of both consumer confidence and the retail industry.”

The company follows a hands-on approach to asset management and believes that this approach has resulted in lower vacancy levels, higher tenant retention rates and a lower risk of negative rental reversions upon lease renewals.

Despite the uncertainty that COVID-19 presents, Exemplar continues to see significant upside potential and forecasts for further investment within its specific niche markets. The company is confident that it will continue to deliver long term growth for its shareholders, its communities and the nation, well into the future.

20 000 #MasksforGood delivered to the Alex community

20 000 #MasksforGood delivered to the Alex community

The Youth Employment Service (YES) and Exemplar REITail are joining forces in a shared vision to protect vulnerable township communities from the spread of Covid-19 by creating and donating ‘home-sewn’ face masks.

The partnership will see a multitude of Alex-based seamstresses earning an income through the making of these masks. “We are proud of this partnership and the contribution to the protection of these communities while supporting and stimulating township economies during this very difficult time,” says Dr Tashmia Ismail-Saville, YES Chief Executive.

CEO of Exemplar, Jason McCormick states, “As a community-centric organisation, we want to ensure as many people as possible have access to masks to help reduce the viral load being shared in public spaces in order to help slow the spread of the virus.”

#MasksforGood is an awareness campaign being rolled out nationally to encourage as many South Africans as possible to “#maskup”. Masks are viewed as one of the effective tools to protect some of the most economically vulnerable citizens across the globe.

“As we navigate this pandemic, we are doing everything in our power to protect our communities. #MasksforGood is just another of the many steps we have already taken to protect those that don’t necessarily have the means to protect themselves,” says Jason.

Alex Mall in Alexandra, Gauteng will be the pilot project for the distribution of masks to the community. The initial roll out of masks is being funded exclusively by personal donations from Exemplar staff, including the CEO, COO and various others in senior management.

The first 20 000 masks are anticipated to be distributed by mid-April and thereafter a campaign will be driven via crowdfunding, giving South Africans who want to play a meaningful role in the fight against COVID-19, an opportunity to do so, as the initiative is rolled out across numerous other townships and rural areas.

Each participating seamstress is being supplied with 50m of medical grade cotton fabric, a pattern and instructions on how to sew the masks. Armed with only a pair of scissors and a sewing machine, they will be able to sew in excess of 1000 masks each. Exemplar will then buy the completed masks back directly from these township entrepreneurs, helping stimulate the local economies within which they operate. The re-usable, washable masks (with care instructions) will then be distributed to the vulnerable communities surrounding the various #MasksforGood initiatives countrywide.

Marketing Manager for Alex Mall, Lily Bophela, says the #MasksforGood initiative is a way to provide the community with protective face masks that will help limit the spread of the disease in Alexandra. “We are appealing to our community to #maskup and protect each other while protecting themselves. Each step we take to fight the spread of this virus will have an impact and we need to work together to keep our families, friends and colleagues safe and healthy,” concludes Lily.

YES is a pioneering, business-driven initiative which has partnered with government and labour to tackle South Africa’s youth unemployment crisis and drive youth employability. YES has already generated over R1.4bn in youth salaries across 35 000 jobs in its first year of operation. It is a not-for-profit company which has no government funding and has been supported by over 650 businesses since inception. Over 150 of these businesses have gained levels up on their B-BBEE scorecards.

Exemplar is a market leading retail REIT, managing 27 assets within township and rural areas, servicing between 10 and 15 million shoppers a month.

Lessons Learnt in the wake of Covid-19

From the desk of Jason McCormick, CEO of Exemplar REITail.

Just under a week since our President Cyril Ramaphosa announced a state of disaster and called on us as South Africans to protect our beloved country and its people, we are reflecting on what has been successful at our shopping centres, and how we can further evolve to protect our customers, staff and communities.

At the outset it is imperative to give credit to our phenomenal Operations, Marketing and Centre Management teams on site at the 27 malls within the Exemplar and MPD portfolio.

We are only as strong as the weakest link and never before has this rung as true as it does in this time of crisis.

We have been inspired beyond belief by the courage, dedication and cohesion with which our teams have set about protecting the 10 to 15 million shoppers that visit our portfolio of township and rural shopping centres monthly – most of whom remain the most vulnerable of our society.

Within the first week of March we installed a visible social distancing campaign at all our sites – this included vinyl floor stickers demarcating the correct distance to keep, awareness posters and promoters on site to educate our customers of the importance of keeping their distance from each other.

As the National Lockdown loomed closer, we noticed a massive increase in numbers to our stores and the need for further measures to keep our customers adequately separated. To that end, we implemented ‘trolley spacing’ using shopping trolleys to space the queues – perhaps one of the most successful initiatives taken to date.

All trolleys were stationed at the pedestrian entrances of the properties (stringent hygiene processes are in place to clean these after each use) and customers take one before joining a queue, thus ensuring everyone stands a minimum of a ‘trolley space’ apart. For any stores looking for a quick and efficient way to ensure social distancing, this is a great place to start.

Since the unprecedented number of customers continued to rise, we took a decision to shut our malls to all vehicular traffic. This was to ensure improved access control and to control the population density within the properties themselves, where we have control, rather than outside on the streets, where we do not.

We have also begun implementing “S-Queues” (a switchback queuing system) across our parking lots. This sees each customer being allocated a spot on the markings of each parking bay, proving effective in staggering our customers and further increasing social distancing in the queues.

Additional successful actions that may be useful to our peers in the industry include minimising the number of ‘touch points’ for those in the queues. We have removed all mall furniture to reduce dwell time and escalators and lifts have all been closed off, as have non-trading areas of the malls in an attempt to minimise the potential of any exposure to Covid-19.

Already stringent hygiene measures such as hand sanitising at all entrances with additional daily deep cleaning of all high traffic areas have further increased as we attempt to help #flattenthecurve.

In the face of social grant pay-outs this week, our most vulnerable customers remain our highest concern. On pension payout day, Monday 30 March, we are restricting access to all shoppers under the age of 65 from 7am until 10am. We have made additional security budget available to assist the elderly and disabled during this time and have initiatives in place to separate the elderly from the youth post 10am.

We want to keep the elderly in our community as protected as possible and call on all tenants, stakeholders and leadership to implement this initiative at as many sites as possible.

As we brace ourselves for the uncertainty that lies ahead, we are confident in our ability to read the landscape and rapidly adapt to any change in order to evolve for the needs of our customers and our country. We call on all retail industry leaders to do the same.

These are extraordinary times that call for extraordinary measures. Think on your feet, keep your communication channels open and adapt wherever you need to … and share your learnings. We are all in this together and we should be working as such.

Now is not the time to question or wonder, but rather the time to take decisive and deliberate action – it is the time for innovation, intervention and inspiration.

Undoubtedly, it is also the time for collaboration,for never before in our democracy has the need been stronger for our nation to stand together (a safe distance apart).

Exemplar REITail Provides Exclusive Trading Hours for Pensioners on Pay-Out Day

Exemplar REITail is providing exclusive access to its Malls for its elderly customers on Monday 30 March 2020, pension pay-out day.

This is to allow them to access their social grants while minimizing their exposure to the threat of the Covid-19 virus.

“In partnership with Pick ‘n Pay, we will be ensuring only customers over the age of 65 gain access to our Malls prior to 10am,” explains CEO of Exemplar, Jason McCormick.

“Whilst much of what lies ahead is speculative, the one inalienable truth is that the virus attacks the elderly with greater severity and mortality than the youth. With the elderly playing a critical role in bringing up the next generation within the townships and rural areas that we operate, protecting their health and safety is of such importance that failure to do so could have knock-on social effects for generations to come.”

Security staff will be on site to handle entry and exit points and we are engaging in an extensive media campaign to educate and inform all customers about the specific trading hours. Customers younger than 65 will gain access after 10am to fulfill their grocery and medical shopping needs.

The above campaign will run in conjunction with Exemplar’s existing social distancing and hygiene campaigns on site to ensure the risk of exposure is limited at all levels.

“While the initial plan was to roll out the campaign at only our sites that have Pick ‘n Pay as a tenant, we have since decided to take the campaign to all Malls in the portfolio,” says Jason.

For a full list of the Malls, visit https://web.facebook.com/ExemplarREITail/

“We are proud to work together with Pick ‘n Pay in protecting our elderly and would like to commend them for their phenomenal response to the pandemic on all levels. We welcome all tenants and industry leaders to follow suit.”

Newly Listed Exemplar Declares Maiden Dividend

Newly Listed Exemplar Declares Maiden Dividend

Exemplar, the rural retail real estate company that listed in June, has declared a maiden dividend of 19.10c per share for the three months to August, rewarding its initial investors.

The McCormick Group, a well-known rural real estate developer, listed Exemplar with assets of about R5.1bn.

Exemplar is run by CEO Jason McCormick, whose family’s company has been a developer in SA for about 35 years, creating and managing rural and semi-urban retail centres.

The fund’s properties were all developed by its biggest shareholder, McCormick Property Development (MPD).

McCormick said MPD continued to develop a significant pipeline of greenfields projects which, if disposed of by MPD, would be offered to Exemplar on a right-of-first-refusal basis.

“This access to a pipeline of value- and yield-enhancing properties is a key differentiator for Exemplar and will contribute to the company’s objective of growing its base of quality assets, earnings and distributions, thereby improving shareholder value,” he said.

Exemplar’s portfolio includes 20 income-generating malls located in peri-urban townships and rural areas of SA. The properties are all internally managed.

Flagship properties include Chris Hani Crossing in Vosloorus, Alex Mall in Sandton’s Alexandra township, Emoyeni Mall in Nelspruit, Blouberg Mall in Bochum and Lusiki Plaza in Lusikisiki.

During the reporting period, Exemplar agreed to acquire Modi Mall and Kwagga after they had been redeveloped.

MPD has a R10bn development pipeline of 26 shopping centres that will be rolled out over the next five years.

In accordance with the agreement, 6,314,284 Exemplar shares would be issued to the vendors on or about November 26. The Kwagga redevelopment was expected to be completed and handed over on or about December 1.

The average vacancy rate across the portfolio was 2.93% of gross lettable area at the end of August.

andersona@businesslive.co.za