Investment Strategy

Overview

L2D aims to deliver sustainable returns to shareholders through a quality property portfolio as well as our experienced leadership and management teams. Achieving this strategic goal has been our driving force since L2D’s inception in 2016.

The main focus of our 2019 strategy was the execution of our three strategic pillars:

• Driving the futureproofing of our assets;
• Creating a team of passionate people; and
• Delivering growth.

Our three strategic pillars

Driving to futureproof our assets

Our aim is to create unique experiential spaces that people are proud to take ownership of and want to visit — spaces that provide a sense of community and go beyond the ordinary shopping experience. In the retail sector, we understand that ‘business as usual’ is not an option. With consumers increasing their spend on experiences, it is vital to adjust our priorities to remain relevant in a competitive market.

To this end, we have introduced new enhancements and elements into our environments that ensure our assets stand above and counter the conventional retail trends. These improvements include supplementing an experience, adding convenience to an experience, or enabling our assets to become an experience in and of themselves. We do this to ensure that our retail centres perform exceptionally well, as evidenced by our vacancies which are well below the benchmark of national vacancy averages. In addition, we partner with our tenants to ensure their best-of-breed offerings are available within our centres, where many brands’ flagship stores are located.

The five building blocks

To help us accomplish our vison and purpose, our strategy focuses on implementing our strategic pillars. We have identified five building blocks that have been embedded into the strategic pillar of driving to future proof our assets. These building blocks ensure we create experiences that are unique and draw people to our assets to drive sustainable and organic growth across our portfolio.

Our building blocks are all underpinned by Safe Spaces. Safe Spaces is our focus on the safety of our customers, tenants and service providers in our mall environments. Safe Spaces has never been more relevant given the current circumstances and our malls have put various safety measures in place to ensure that our mall environments remain open and trading.

To help futureproof our assets and truly set them apart in the market, we identified five building blocks, which sharpen the focus of our efforts and business activities. Implementing our building blocks ensures that we create unique experiences in our environments, which then attract customers to our assets, driving organic growth.

Passionate people

In order to make the most of our superior quality assets, we require a team of skilled and experienced people. Therefore, the core focus of our human capital philosophy is on employing the right people in the right roles. This means attracting and retaining passionate people who hold themselves individually accountable to help us achieve the outcomes that are aligned to our overall strategy.

Grow to make an impact

We continue to seek out opportunities in the market, with the aim of unlocking L2D’s value and improving share liquidity. An improved liquidity and spread of shareholders will boost L2D’s underlying value and offer a simple route to invest in commercial property in South Africa. In turn, L2D stands to benefit from positive investor sentiment.

Our primary focus is on extracting organic growth from the existing portfolio. A secondary goal is to supplement organic growth with appropriate growth opportunities. Our low LTV provides us with the capacity to consider attractive market opportunities that support our growth objectives. To preserve and enhance the superior nature of our current portfolio of assets, any future acquisitions will have to align with the levels of quality that underpin L2D.

Our strategic value drivers

To fulfil our purpose and vision, we use the strategic value driver model. These drivers are aligned to our vision and enable us to execute our strategic pillars and building blocks. They also help to focus our business activities in order to deliver sustainable value for our stakeholders.

Our strategic value drivers provide an effective means to set strategic goals, monitor progress and measure our performance through metrics against industry benchmarks and peers.

Our purpose and vision guide our strategy

Our purpose is to continue to create experiential spaces that benefit generations and our vision is to be the leading South African, precinct focused, retail-centred REIT. Our purpose and vision guide our strategy and underpin our everyday business activities. We combine our energy with our business model to fulfil our vision and purpose.

Leveraging the experience and expertise of our management team ensures that we are well positioned to achieve our objectives.