interim results presentation statements... · arrears are well contained at r15.3m vs r25.2m at...

INTERIM RESULTS PRESENTATIONFOR THE HALF YEAR ENDED 31 DECEMBER 2017

2

AGENDA

01 Strategic Milestones

02 Portfolio Update

03 Capital Management

04 Financial Results

05 Conclusion

06 Annexures

South Africa

V&A Waterfront

GOZ

Globalworth

Oxford Corner, Rosebank

STRATEGIC MILESTONES

M1 Place, Eastgate, Sandton

4

STRATEGIC

MILESTONES

Optimising & Streamlining RSA Portfolio

▪ c. 5% of the RSA portfolio by value

assembled for sale in four portfolios and

submitted to the market for expressions of

interest with a deadline of 13 February

2018. We have received 23 offers from

various parties, incl. BEE consortiums and

property funds, which we are evaluating

▪ In line with our strategy to recycle capital,

individual assets of c. R3.2bn have been sold

but not yet transferred, post December 2017

incl. Investec Sandton, Hatfield Plaza and

Turbine Square

▪ Further EUR113.8m invested into GWI

▪ GWI acquisition of 71.7% of Griffin Premium RE

(GPRE)

▪ Romanian and Polish presence focused on the

office and industrial sectors

▪ The contribution to the Group from offshore is

24.0% of the book value of the Group’s

property assets and 19.6% of EBIT

▪ The strategy is to grow the offshore

contribution to 30%, for both the above

numbers, over three years. Requiring c. R10bn

of additional capital investment

Internationalisation

5

Introducing New Revenue Streams

Africa Fund

▪ USD210m committed for investment from Growthpoint

and third parties, with first close scheduled for 31 March

2018

Healthcare Fund

▪ Five hospital assets valued at R2.4bn

▪ R275m committed from institutions, targeting c. R1.5bn

for first close

▪ Awaiting the opportunity to present to the Investment

Committees of many of the large pension funds; this is a

lengthy process

▪ Further acquisition and development opportunities of

c. R1.0bn in the pipeline

3rd Party Development Fees and Trading Profits

▪ Good progress has been made with this element of the

strategy given the skills, capacity and capital available

▪ 1% - 2% of distributable income is expected to come from

development fees and trading profits going forward

Delivering on our strategic initiatives

in line with our vision:

To be a

leading international property company providing space to thrive

6

PERFORMANCE

HIGHLIGHTS

6.5% distribution growth from HY17 to

101.2 cents per share

10.6% increase in distributable

income from HY17 to R2.9bn

4.4% increase in Group

property assets from FY17

to R127.7bn

7

Group LTV down

0.5% from FY17

to 34.5%

3.9% increase in Group NAV

from HY17 to 2 593 cents

per share

Group vacancies well

contained at 4.6%, albeit

they have increased 0.9%

from FY17

PORTFOLIO UPDATE

V&A Waterfront, Cape Town

PORTFOLIO UPDATESOUTH AFRICA

Key West, Krugersdorp

10

SOUTH AFRICA ▪ Whilst sentiment has changed with President Ramaphosa’s victory,

the operating environment remains very tough with lots of uncertainty

▪ We are still at the bottom of the property cycle

▪ Client retention is under pressure

▪ The lack of business confidence is translating into shorter lease terms

generally, which means leases are reverting back to market

more frequently

▪ It is costly to attract and retain tenants in a fiercely competitive

environment where supply exceeds demand in all 3 sectors

▪ Arrears are generally under control and actively managed, as such

they have decreased 7.5% to R76.6m vs. R82.8m at HY17, representing

7.8% of collectables vs. 8.8% at HY17

▪ Vacancies at 5.2% have marginally increased from 4.4% at FY17 but

remain below national benchmarks

▪ Over 500 000m² of space was let in the period

Domestic Economy & Property Market Remains Challenging

11

▪ We are seeing a slowdown in new supply, with Fourways Mall being the largest project currently under

construction. With retailers reluctant to grow footprint, we are hopeful that this slowdown remains, as

we believe there is excess capacity in the market

▪ Renewal success rate at 84.3% which is below our target of 90.0%

▪ The rate of deterioration in the renewal growth rate has been faster than expected, from 4.2% at HY17

to 3.2% at FY17 and currently 0.4%. This statistic was however negatively affected by defensive renewals

at Bayside Mall, coupled with retailers consolidating space

▪ 1.3% portfolio average trading density growth, weighted by GLA, consistent with FY17

▪ Vacancies improved from 3.6% at FY17 to 3.0% with the expectation that there will be a slight

decline to FY18

▪ Core retail vacancy, excluding unlettable ex-cinema and office space, constant at 1.5%

▪ Due to once off anomalies raised before half year end, arrears increased to R45m from R41m at HY17

and increased to 11.3% as a percentage of collectables from 10.7% over the same period. Arrears

subsequently reduced to 10.0% in January 2018

▪ We acquired the remaining 58% of N1 City Mall for R922m (8.0% yield) to further strengthen our exposure

in the Western Cape which out performs other provinces

▪ Two retail assets were sold which were no longer considered core to the portfolio

▪ We are upgrading and reconfiguring space at Brooklyn and Walmer and are in advanced planning stages

for extensions to Paarl and Waterfall Malls to address specific demand

Retail

12

Office

▪ The office sector is still weak but has generally not deteriorated further in the

last six months

▪ High incentives are still the order of the day to attract and retain tenants

▪ The environment is hugely competitive with renewal success at c.47% for the period

▪ Clients remain reluctant to commit for long periods as is evidenced by the weighted

average lease renewal period dropping below 3 years for the first time

▪ On a positive note, the historic negative reversion rates considered endemic for the

sector are now flat to slightly positive

▪ Vacancies deteriorated from 6.8% at FY17 to 8.4%, mainly as a result of BCX

vacating c. 13 000m² in Midrand

▪ Arrears are well contained at R15.3m vs R25.2m at HY17, representing 3.9% of

collectables vs 6.5% at HY17

▪ With a desire to keep our product relevant we have continued to develop as GDP

has stagnated. We continue to see demand for new P grade green buildings in

specific nodes incl. Cape Town, Rosebank, Bryanston, Sandton and Umhlanga

▪ 86 office buildings, valued at R18.7bn have been certified by GBCSA with the

intention to have all long term investments certified by 2020

▪ On the development side, Discovery was delivered on time and within budget, with

the income positively impacting the second half of FY18

▪ Asset management strategy focused on disposing of non-core properties,

development of new P grade and green certified, well located buildings, whilst

acquisition opportunities offering value remain in short supply

▪ In line with this strategy, two office properties were sold during the period, but not

yet transferred, and none were acquired

13

Industrial

▪ The portfolio is diversified with a bias towards modern logistics warehouse facilities,

with the majority of new developments focused on this asset type

▪ 11 assets were sold in the period that did not meet our long term investment strategy

and one strategic asset was acquired

▪ Yield compression is evident, as the understanding of the asset class improves, along

with the quality of the underlying assets

▪ Vacancies increased by 1% from FY17 to 4.1%. The stubborn c. 18 000m² vacancy at

Paul Smit Anderbolt was let post HY18, bringing vacancies back to FY17 levels

▪ The renewal success rate has declined to 63.9% vs. 78.5% at FY17, with renewal

growth now in negative territory at -2.5% vs. 2.3% at FY17. Renewal growth

deteriorated as a result of three renewals totalling 25 700m² with a -4.3% drag on

renewal growth

▪ The glut of industrial land, coupled with a development overhang is placing pressure

on renewals

▪ Arrears are consistent with HY17 levels at R16m representing 9.4% of collectables vs.

10.0% at HY17

▪ The weighted average lease period is in line with the market at 3.2 years

▪ Durban and Cape Town, with their access to the ports and limited supply of land,

continue to perform well with vacancies virtually non-existent, low arrears and with

real demand and growth

▪ We own strategic land parcels which we believe will offer good value in the future as

our “convert the dirt” strategy continues focusing on distribution and logistics

facilities between 5 000m² and 20 000m²

▪ We are cautiously optimistic that positive sentiment will start to translate into

renewal growth, rental growth, reduced vacancies and longer lease periods

14

Western Cape Water Crisis

▪ 91 of the 463 RSA properties are located in the Western Cape

▪ Growthpoint’s main focus up until 2018 has been on the reduction of water consumption:

− 41% for office

− 27% for retail

▪ Our current focus is developing alternative water sources:

− Retail will have operational boreholes by “Day Zero” across all sites

− Within the industrial portfolio, we are focusing on sites where water is needed for

production processes

− Office properties have a mix of borehole and sump water available,

which will be distributed via water tanks

▪ Other augmentation plans include:

− Procurement of water from the Liesbeek River, with approval having been obtained

− Installation of water purification plants where sump pumps yield substantial amounts

of water

− Atmospheric water generation

− Procurement of water tankers to distribute alternatively sourced water

▪ Chemical toilets are being procured at sites without water security

15

HY18

Rm

HY17

Rm

INCREASE/

(DECREASE)

Gross property revenue 4 188 3 937 6.4%

Retail 1 612 1 544 4.4%

Office 1 871 1 739 7.6%

Industrial 705 654 7.8%

Property expenses (1 006) (933) 7,8%

Retail (420) (395) 6.3%

Office (426) (395) 7.8%

Industrial (160) (143) 11.9%

Net property income 3 182 3 004 5.9%

Adjustments (481) (431)

Acquisitions and developments (295) (182)

Disposals (25) (94)

Healthcare (26) (24)

Investec rent (135) (131)

Adjusted “like-for-like” net property income 2 701 2 573 5.0%

Retail 1 009 967 4.3%

Office 1 204 1 137 5.9%

Industrial 488 469 4.1%

NET PROPERTY INCOME ANALYSIS

PORTFOLIO UPDATEV&A WATERFRONT

V&A Waterfront, Cape Town

17

V&A

WATERFRONT

Silo District▪ Now complete

▪ Zeitz MOCAA opened its doors in September 2017 to just over 70 000

visitors in the opening month

▪ The museum adds to the list of attractions at the V&A and has been

the recipient of numerous international awards and accolades

▪ The 252 bedroom Radisson Red Hotel opened its doors in the same

month, and is already benefitting from high occupancies

Canal District▪ The Waterway House development is complete with blue chip office

tenants incl. BAT and E&Y and signature retail tenants incl. Porsche,

Ducati and Ferrari

▪ The Battery Park, 1 400 bay parking garage is expected to open in the

second quarter of 2018. The three acre urban park situated above the

garage will be a family friendly green space which will be activated by

“destinational” retail pockets

▪ Dock Road Junction, at the entrance to the V&A, has secured letting

of the entire office node to Regus

▪ The adjacent Queens building is awaiting heritage approval for a

“vibey” retail offering

Marine▪ The second phase of the passenger cruise terminal was completed in

time for the season, with c. 45 000 passengers and crew members

processed

18

Property Fundamentals

▪ Strong demand for office space from blue chip corporates

▪ Vacancies across the sectors below benchmarks

▪ Favourable tenant retention rates continue which is a key strategic pillar in the office sector

▪ Retail sales are marginally down 0.7%, due to both the local trading environment and strength of the ZAR

relative to the previous year. Whilst the tourists spent similar amounts in foreign currency it was substantially

less in ZAR terms. In addition, the H&M effect being such a large proportion of overall sales, pulled the overall

performance down, with additional stores openings across the country

▪ Average trading densities c. R5 500, ahead of the super-regional benchmark categories, but have declined by

1.79%, due to new retail areas at the Silo District and Waterway House dragging down the overall average

▪ Footfall at Victoria Wharf remained consistent at c. 24m visitors but showing marginal signs of decline with an

uplift in the Watershed, Food Market & Silo District

▪ New retail offerings and tenant churn is part of the strategy to keep the retail sector competitive and relevant

▪ 21% growth in international passengers through Cape Town International Airport had a favourable impact on

both hotels and retailers

▪ Hotels tracking ahead of the trend on average room revenue levels, but first signs of a drop in occupancy levels

are visible, relating to “Day Zero” publicity

▪ The residential “to let” offering is stable with vacancy levels well within benchmark statistics

▪ The marine and industrial portfolio is stable, with the film studios having consolidated and found home

at the V&A

19

“Day Zero”

▪ The drought has been amplified in recent months and the V&A’s

priority is to ensure it can trade through the transition from a water

abundant region to a water scarce region

▪ Much work has been done with tenants to decrease consumption

levels and elevate awareness about responsible water usage

▪ A site has been provided to the City of Cape Town to locate their

2 mega litre (ML) per day desalination plant expected to be

operational in March 2018

▪ The V&A has committed to build its own 5ML per day plant with an

estimated completion date in 2019 to meet current and future

normal needs

Sustainability

▪ A leading developer of green buildings

▪ Radisson Red and Waterway House both received 5 star ratings from

the GBCSA

▪ Renewable energy production continues to increase with the roll out

of solar panels across the site

▪ Commitment to drive reduction in single usage plastics, due to the

negative impact on the ocean

0

PORTFOLIO UPDATEGOZ

5 Murray Rose Ave, Sydney Olympic Park, NSW, Australia

21

GOZ▪ Track record of growth in assets, profit and shareholder

returns continues

▪ 3.8% increase in dividend per share over HY17 to 11cps

▪ 17.0% average total shareholder return vs. 13.4% S&P/ASX

300 A-REIT index over 5 years

▪ Book value of property portfolio increased 4% over FY17

▪ 6.9% increase from FY17, on a like for like basis, in net

tangible asset value per share to AUD3.08

Shareholder Return

Capital Management

▪ Gearing reduced 270bps to 35.8% from 38.5%,

which is the revised FY17 number due to a

change in the gearing calculation. Reduction

mainly due to strategic asset sales, in line with

the strategy to divest assets considered non-

core to the group, or which have reached their

peak value to GOZ, or which have higher

alternative use value e.g. residential

▪ 522-550 Wellington Road was sold for

AUD90.8m. The sales price represented a 38%

premium to book value

Industria REIT (IDR)

▪ 18.2% interest acquired at a DPS yield of 7.2% which

represented good value compared to the direct

property market

▪ IDR ASX price trading well above acquisition price

22

Guidance

▪ Guidance for FY18 dividend growth of

3.3% to 22.2 cps

Property Fundamentals

▪ 66% office and 34% industrial

− higher vacancies generally but also due to one large

industrial vacancy

− shorter weighted average lease period

− increased property expense ratio

▪ Further cap rate compression in the direct property market

▪ 87% of properties are located on the Eastern seaboard with

Sydney & Melbourne showing improvements in

market rentals

▪ The renewal success rate of 35.1% was negatively impacted

by few renewals in the current period, some which were

unsuccessful, with more success letting previously

vacant space

▪ 42 741m² of new lets and renewals since FY17

▪ Lease incentives have decreased 3% in office from 29% to

26% but have increased significantly in industrial, from 9%

to 23% from HY17 to HY18. The industrial number is

negatively impacted by low leasing activity, meaning one

large lease can have a significant impact

PORTFOLIO UPDATEGLOBALWORTH

Globalworth Tower, Bucharest, Romania

24

GWI

Initial

Investment

Dec 2016

31 Dec

2017 Growth

% Ownership 26.8% 29.0% 8%

Total Invested (EURm) 186.4 300.2 61%

Total distribution received since acquisition (EURm) - 13.7

Share price of investment (EUR) 7.37 8.75

Share price (EUR) 5.05 8.98 78%

Market capitalisation (EURm) 325 1 187 265%

Property value 100% (EURm) 976 1 815 86%

▪ December 2016 - EUR200m equity raise at EUR8.00 per

share with Growthpoint investing EUR186.4m

▪ June 2017 - EUR550m Eurobond issued

▪ December 2017 - EUR340m equity raise at EUR8.75 per

share with Growthpoint investing an additional

EUR110m

Recapitalisation to Fund Accretive Acquisitions

25

Portfolio Update

▪ 39 properties, 19 in Romania and 20 in Poland, vs. 16 Romanian properties in June 2017

▪ c. 791 000m² vs c. 499 000m² in June 2017

▪ Occupancy at 93.3% from 91.3% in June 2017

▪ 5.3 years weighted average lease period

▪ Accretive acquisition and development opportunities in Romania:

− Completion of c. 8 000m² industrial facility for Litens at Timisoara Airport Park (TAP)

− 30 hectares of land adjacent to the TAP logistics complex acquired to facilitate further phases of light

industrial/ logistics projects of up to c. 140 000m²

− Globalworth Campus

• Completion of Tower I, 55% let with Amazon being the largest tenant

• Tower II due for completion Q1 2018 with 28% pre-let

• Tower III offering an additional c. 34 800m² GLA with construction expected to commence in the first

half of 2018

− Acquisition of c. 16 000m² Green Court C which is 98% let

− Renault Bucharest Connected (RBC) 42 300m² development under construction with expected delivery

Q1 2019 leased to Group Renault Romania for 11 years

− Two land plots acquired in Bucharest’s new CBD, allowing for the development of c. 40 000m² of

predominantly office space

▪ GPRE acquisition and Polish pipeline:

− Six office properties

− Three mixed use properties comprising office and retail

− Three office properties acquired from Echo Polska Properties (EPP) for EUR160m with world renowned

tenants incl. Intel, IBM and Nokia

− Four development projects in various stages of completion. One forward funded, and 25% stakes in a

further three properties, with right to acquire remaining 75% on completion

26

GWI continues to surpass Growthpoint’s due diligence

expectations and deliver on distribution guidance

▪ Delivered EUR 0.44 dividend per share since initial investment

▪ 22.7% increase in dividend per share for FY18 over FY17, based

on guidance of EUR 0.54 cents per share

▪ GRT to support GWI in achieving its mission of becoming a

leading international investor in CEE commercial real estate, by

investing further capital as opportunities arise

CAPITAL MANAGEMENT

1 Charles Street, Paramatta, NSW, Australia

28

RSA

CAPITAL

MANAGEMENT

Total Debt R31.5bn

▪ Unsecured debt increased by R1.8bn from FY17

▪ Two new listed bonds issued at margins of 144 and 170 basis points

with terms for 5 and 7 years respectively

▪ CCIRS for EUR110m raised for further investment in GWI

▪ Funded from:

− R1.1bn equity DRIP proceeds

− R2.2bn net new borrowings

− R0.5bn property disposals

Investment Activities Moody’s Rating

▪ Our Baa3 Global Scale Rating is

capped at the sovereign rating due

to our operational concentration in

SA and as with the sovereign rating,

is currently under review

▪ We are one of only 3 corporates with

a national scale rating of AAA.za

29

AUD & EUR Cross Currency

Interest Rate Swaps (CCIRS)

▪ Total AUD700m representing 48% of

market value of GOZ with a dividend

cover of 4.3x

▪ Total EUR196.4m together with the

EUR100m direct loans representing

100% of the historical cost of GWI

with a dividend cover of 3.9x

Exchange Rate Risk

▪ The ZAR weakened to both the AUD and EUR for the

majority of HY18 with subsequent strengthening

post the ANC Elective Conference on 16 Dec 2017

▪ 82% of GOZ dividends are currently hedged for FY18

▪ 47% of GWI dividends are currently hedged for FY18

30

HY18 FY17

Unutilised committed facilities (Rbn) 3.0 4.5

Weighted average term of liabilities (years) 2.8 3.0

Weighted average term of fixed interest rate profile (years) (Incl. AUD & EUR CCIRS and IRS) 3.7 3.9

Weighted average interest rate (%) 9.1 9.2

Weighted average interest rate (%) (Incl. AUD & EUR CCIRS and EUR debt) 7.5 7.4

% debt at fixed interest rate 78.4 85.6

Unencumbered assets (Rbn) (incl. equity accounted and listed investments) 48.5 44.2

Unsecured debt (Rbn) 14.3 12.5

RSA Facilities

31

14 880 15 276 15 737

1 8031 540 1 540

4 2865 248

6 619

3 284

6 824

7 133

400

400

500

FY16 FY17 HY18

RSA DIVERSIFIED BORROWINGS — NOMINAL VALUE

Debt capital market 14.9%

Traditional bank debt

85.1%

Unsecured32.3%

Secured67.7%



75.8%

Unsecured45.2%

Secured54.8%



75.3%

Unsecured42.6%

Secured57.4%

R29 288mR24 653 R31 529m

Secured bank debt Secured institutional financier Unsecured bank debt and institutional financier Corporate bonds Commercial paper

FINANCIAL RESULTS

Waterway House, V&A Waterfront

33

HY18Rm

HY17Rm

INCREASE/ (DECREASE)

Gross property income 5 487 5 178 6.0%

RSA 4 188 3 937 6.4%

GOZ 1 299 1 241 4.7%

Property expenses (1 192) (1 103) 8.1%

RSA (1 006) (933) 7.8%

GOZ (186) (170) 9.4%

Net property income 4 295 4 075 5.4%

Other operating expenses (213) (196) 8.7%

RSA (150) (135) 11.1%

GOZ (63) (61) 3.3%

Net property income after operating expenses 4 082 3 879 5.2%

Finance costs (1 308) (1 254) 4.3%

RSA (1 015) (963) 5.4%

GOZ (293) (291) 0.7%

Finance income 360 311 15.8%

Investment income from V&A Waterfront 287 256 12.1%

Other finance income (1) 73 55 32.7%

Investment income from GWI 128 - 100.0%

Adjustment for NCI, foreign exchange profit /(loss) and normal taxation (319) (274) 16.4%

Distributable income 2 943 2 662 10.6%

Dividend for the period 2 943 2 662 10.6%

CONSOLIDATED DISTRIBUTION CALCULATION

1. Includes R8m (HY17: R21m) interest on V&A Waterfront development funding.

* Average exchange rate at R10.45/AUD (HY17: R10.55/AUD) for GOZ.

34

73 655 77 031 80 057

7 0277 965

8 660

19 08320 341

20 342

3 813

7 739

450

382

HY16 HY17 HY18

2 754 2 870 3 032

198256

287510

649

684

128

11

HY16 HY17 HY18

Book Value of Property Assets EBIT

OFFSHORE CONTRIBUTION

R109 532m

18.6%

7.3%

70.3%

R100 215m

19.0%

7.0%

73.6%

0.4%

R116 798m

17.4%

7.4%

68.6%

6.6%

24.0% Offshore

19.6% Offshore

R3 774m

17.2%

6.8%

76.0%

R3 473m

14.7%

5.7%

79.3%

0.3%

R4 131m

16.5%

6.9%

73.4%

3.1%

RSA V&A Waterfront GOZ Globalworth (1) Stenham

0.3%

3.5%

1. Globalworth is not shown as EBIT but as the distribution received for our 29.0% investment.

35

23.7% 23.5% 24.0%

3.4% 3.6% 3.6%

HY17 FY17 HY18

13.7% 13.0% 14.3%

4.9% 4.8%4.8%

HY17 FY17 HY18

SOUTH AFRICA GOZ

27.2% 28.1% 28.8%

2.6%3.3% 2.9%

HY17 FY17 HY18

V&A WATERFRONT

EXPENSES REMAIN UNDER CONTROLEXPENSE TO INCOME RATIOS (IFRS)

27.1%27.1% 27.6% 31.4%29.8% 31.7% 17.8%18.6% 19.1%

Operating Expense Ratio Property Expense Ratio Operating Expense Ratio Property Expense Ratio Operating Expense Ratio Property Expense Ratio

36

HY18

Rm

FY17

Rm

HY17

Rm

HY18-FY17

INCREASE/

(DECREASE)

Property portfolio(1) 111 305 109 442 108 663 1.7%

RSA 80 057 76 906 77 032 4.1%

GOZ(2) 31 248 32 536 31 631 (4.0%)

Equity Investments 12 142 9 920 9 627 22.4%

50% Investment in V&A Waterfront 7 196 7 110 6 610 1.2%

29% Investment in GWI 4 909 2 769 2 783 77.3%

Other Investments (Ferguson Place, Storage, Open) 37 42 234 (11.2%)

Other property related investments - 226 382 (100.0%)

Nominal borrowings(3) 43 512 42 364 44 517 2.7%

RSA 31 529 29 288 30 764 7.7%

GOZ(2) 11 983 13 076 13 753 (8.4%)

Shareholders interest (NAV) 75 371 72 045 69 922 4.6%

CONSOLIDATED BALANCE SHEET (EXTRACTS)

1. Includes R160m (FY17: R1 241m, HY17: R1 070m) of properties classified as held for sale.

2. Closing exchange rate R9.66/AUD (FY17: 10.04/AUD, HY17: R9.90/AUD).

3. Excludes fair value adjustments.

37

34.7% 33.4% 33.8%

0

1

2

3

4

5

6

7

0%

10%

20%

30%

40%

50%

HY17 FY17 HY18

36.7%35.0% 34.5%

0

1

2

3

4

5

6

7

0%

10%

20%

30%

40%

50%

HY17 FY17 HY18

SOUTH AFRICA GROUP

42.3%39.4%

36.5%

0

1

2

3

4

5

6

7

0%

10%

20%

30%

40%

50%

HY17 FY17 HY18

GOZ(2)

CONSERVATIVE GEARING LEVELSLOAN TO VALUE AND INTEREST COVER RATIOS

3.4x3.4x 3.9x3.5x 3.5x3.4x3.6x 3.5x3.4x

1. Nominal value of interest-bearing borrowings (net of cash), divided by the fair value of property assets, including investment property held for sale. For RSA and group the 50% equity investment in V&A Waterfront and

other equity-accounted and listed investments were included in the fair value of property assets.

2. GOZ disclosed gearing is calculated differently and is 35.8%. Calculated as the nominal value of debt (net of cash), divided by total assets (net of cash).

LTV (1) Interest cover ratio (incl V&A) LTV (1) Interest cover ratio (incl V&A) LTV (1) Interest cover ratio (incl V&A)

38

PROPERTY INVESTMENT AND DEVELOPMENT

RSA (Rm) GOZ (Rm) V&A (Rm)

Develo

pm

ent

and c

apex

Openin

g

bala

nce

Acquis

itio

ns

Dis

posa

ls

Fair

valu

e

adju

stm

ent

Tota

l

76 906

1 054

(479)

1108 1 468

80 057

Fair

valu

e

adju

stm

ent

Openin

g

bala

nce

Dis

posa

ls

Develo

pm

ent

and c

apex

Fore

ign c

urr

ency

transl

ati

on

rese

rve

Tota

l

Acquis

itio

ns

32 536

518

(1 701)

1 043

(1 213) 31 248

65

Develo

pm

ent

and c

apex

Openin

g

bala

nce

Dis

posa

ls

Tota

l

8 705 8 660(232) (1)

187

Commitments (Rm) 2 253 147 100

1. Disposal relates to the sale of the bulk along with the sale of the Silo 3 apartments and the reclassification of the Radisson Red Hotel, as it is now owner occupied.

CONCLUSION

Illovo, Umhlanga Ridge, Durban

40

PROSPECTS

South Africa

▪ Sentiment has improved but property fundamentals

remain under pressure

▪ We estimate a one to two year lag before we start to see

a change in property fundamentals, assuming we start to

see GDP growth, coupled with private sector investment

and foreign direct investment

▪ Moody’s decision on the Sovereign rating is scheduled for

23 March 2018

▪ The negative yield spread environment remains

▪ Our strategy focuses on streamlining the SA portfolio and

growing internationally

▪ We do not believe that the reference amongst analysts

and reporters about the listed property sector being sold

off, are accurate. The recent volatility is specific to

those counters that have historically traded at excessive

premiums to NAV, or have company specific issues, such

as lower distribution growth forecasts communicated to

the market

▪ Growthpoint, Redefine, Vukile and Investec Property

Fund are all trading at 12 month highs

V&A Waterfront

▪ We expect strong growth to continue in the office

and hotel sectors with steady growth in the retail,

marine and residential sectors

▪ The key risk identified is the impact of the water

crisis on the Western Cape and Cape Town tourism

▪ The development pipeline is expected to meet

demand with strong property fundamentals in place

41

GOZ

▪ Whilst the Australian domestic economic conditions

remain supportive, the property market is competitive.

In line with this backdrop, GOZ:

− continues to evaluate opportunities to sell assets

at premium to book value

− continues to evaluate direct asset opportunities,

focusing on offices in Sydney & Melbourne, with

a preference for listed market acquisitions

− is investigating development opportunities

− is targeting 3-4% distribution growth

− has balance sheet capacity

▪ The dividend withholding tax is expected to be higher

coupled with the ZAR strength, negatively impacting

distributions to SA

▪ We will continue to support the growth of GOZ going

forward, by providing capital as opportunities arise, in

line with our internationalisation strategy

42

▪ Dividend growth for FY18

should be similar to that

achieved for FY17

Dividend Guidance

GWI

▪ The economic backdrop is strong and supportive for

the property market in both Romania and Poland

▪ GDP estimates for 2018:

− Romania 4.1%

− Poland 3.8%

▪ Large multi-national tenants continue to be

attracted to the region due to the young, educated,

affordable and ambitious labour force

▪ Ongoing expansion and diversification of the GWI

portfolio is expected to further improve cost

of capital

▪ GWI considering moving its listing to the main market

of the LSE

▪ GWI continues to look at further opportunities in

Romania and Poland in the office and

industrial sectors

THANK YOU

Hilltop Industrial Park, Elandsfontein

ANNEXURES

Growthpoint Business Park, Midrand

45

ANNEXURE CONTENTS

02

03

04

05

06

07

08

01 Company highlights

Growth in tangible assets and market

capitalisation

Long bond yield vs. GRT forward yield

Contribution to distributable income

Portfolio overview

Property investment activities

Expense to income ratios (gross)

Loan exposure per financier RSA

Debt expiry profile per financier RSA

Fixed interest rate expiry profile RSA

Wealth created & distributed to stakeholders

Shares issued & beneficial shareholders holding >2% at HY18

Portfolio overview RSA (excl. V&A)

10

11

12

13

14

15

09

16

Key performance indicators RSA

Split of RSA property portfolio

Growth in dividend per share (cents)

46

ANNEXURE CONTENTS

17

18

19

20

21

22

23

25

26

27

28

29

30

31

24

Developments & capital expenditure RSA

Commitments RSA

Non-current assets held for sale RSA

Retail overview RSA

Office overview RSA

Industrial overview RSA

Key performance indicators V&A Waterfront (50%)

Portfolio overview V&A Waterfront (50%)

Split of V&A Waterfront property portfolio

Developments & commitments V&A Waterfront (50%)

Net property & distributable income analysis V&A Waterfront

(50%)

V&A Waterfront overview

GLA & vacancy reconciliation V&A Waterfront (50%)

32GLA & vacancy reconciliation RSA Key performance indicators GOZ

Acquisitions & disposals RSA

47

ANNEXURE CONTENTS

34

35

36

37

38

39

Split of GOZ property portfolio

Acquisitions & disposals GOZ

Developments & commitments GOZ

Net property income analysis GOZ

GOZ overview

GLA & vacancy reconciliation GOZ

33 Portfolio overview GOZ

48

Company Highlights

▪ Largest South African primary listed REIT

▪ 21st largest company in the FTSE/JSE Top 40 Index

▪ Gross market capitalisation R80.4bn (at R27.66 per share)

▪ Liquid and tradeable with R4.5bn average value of shares

traded per month

▪ 8th year inclusion in FTSE/JSE Responsible Index

▪ 1st year inclusion in the FTSE4Good Emerging Index

▪ Top 10 constituent of FTSE EPRA/NAREIT Emerging Index

Investment Proposition

▪ Sustainable quality of earnings

▪ 14 year track record of uninterrupted dividend growth

▪ Underpinned by high-quality physical property assets

▪ Diversified across international geographies and sectors

▪ Dynamic and proven management track record

▪ Best practice corporate governance

▪ Transparent reporting

▪ Level 3 BEE contributor

ANNEXURE 01:COMPANY HIGHLIGHTS

49

0

500

1000

1500

2000

2500

3000

0

20

40

60

80

100

120

140

HY12 FY12 HY13 FY13 HY14 FY14 HY15 FY15 HY16 FY16 HY17 FY17 HY18

ANNEXURE 02:GROWTH IN TANGIBLE ASSETS AND MARKET CAPITALISATION

Rbn cents

3 000

2 500

2 000

1 500

1 000

500

0

2 766c

2 597c

Tangible assets (Rbn) Market cap (Rbn) Share price (cents) NTAV per share (cents)

50

4%

5%

6%

7%

8%

9%

10%

11%

12/30/2011 6/30/2012 12/31/2012 6/30/2013 12/31/2013 6/30/2014 12/31/2014 6/30/2015 12/31/2015 6/30/2016 12/31/2016 6/30/2017

GRT Forward Yield SA Long Bond Yield

8.6%

ANNEXURE 03:LONG BOND YIELD VS. GRT FORWARD YIELD

Dec

2011

June

2012

Dec

2012

June

2013

Dec

2013

June

2014

Dec

2014

June

2015

Dec

2015

June

2016

Dec

2016

June

2017

7.8%

Dec

2017

Greencourt “A” & “B”, Bucharest, RomaniaSource: Anchor Stockbrokers

51

78.5 84.4 89.5 95.0 101.2

44.5

82.8

44.5

94.3100.8

FY14 FY15 FY16 FY17 FY18

ANNEXURE 04:GROWTH IN DIVIDEND PER SHARE (cents)

195.8

161.3173.4

183.8

101.2

Growth

6.5%7.5% 6.0% 6.5% 6.5%

The Place, Sandhurst, Sandton

Interim dividend Special dividend Final dividend

52

1 8622 001 2 119

198

235279361

426

417

10

128

HY16 HY17 HY18

ANNEXURE 05:CONTRIBUTION TO DISTRIBUTABLE INCOME

Growth

10.6%R2 662m

16.0%

8.8%

75.2%

R2 431m

14.8%

8.1%

76.7%

0.4%

R2 943m

14.2%

9.5%

72.0%

Anslow, Bryanston

RSA V&A Waterfront GOZ Stenham Globalworth

4.3%

53

RETAIL OFFICE INDUSTRIAL RSA TOTAL GOZ (1) (3) V&A (1)

Number of properties 54 182 227 463 56 1

GLA (m²) 1 423 816 1 757 898 2 244 535 5 426 249 1 003 529 229 315

Vacancy (m²) (5) 42 572 147 101 92 696 282 369 24 477 2 723

Vacancy (%) (5) 3.0 8.4 4.1 5.2 2.1 1.2

Valuation (Rm) 31 245 35 824 12 988 80 057 31 248 8 660

Value per m² (excl. bulk) (R) 21 931 18 770 5 342 14 045 AUD3 222 35 838

Average gross rental (per m²/month) (R) (5) 184.8 160.0 52.0 121.2 AUD239 (2) 231.0 −

Average annualised yield (%) (5) 7.7 8.8 9.1 8.4 6.9 − 7.8 −

Average in force escalations (%) (5) 7.2 − 8.1 − 8.2 7.7 3.3 − 8.3

Weighted average lease period (years) (5) 3.2 3.7 3.2 3.5 5.6 8.0 −

Renewal success rate (%) (5) 84.3 46.9 63.9 61.9 35.1 91.9

Weighted average renewal lease period (years) (5) 4.0 2.8 3.3 3.3 − 4.3 8.0 −

Weighted average renewal growth (%) (5) 0.4 0.3 (2.5) (0.5) (7.8) 4.9

Weighted average future escalations on renewals (%) 7.2 8.6 8.3 7.9 3.4 7.5

Total letting success rate (%) (5) 70.0 47.7 74.3 64.0 38.5 85.8

Arrears (Rm) (4) 44.9 15.3 16.4 76.6 7.9 36.4

Provision for bad debts (Rm) (4) 12.1 5.3 11.5 28.9 - 6.2

Bad debts (I/S) (Rm) (4) 2.9 0.8 3.4 7.1 - -

ANNEXURE 06:PORTFOLIO OVERVIEW

1. V&A Waterfront is included reflecting Growthpoint's 50% interest, GOZ is reflected at 100%.

2. Based on net rental per annum.

3. Measurements and ratios are based on income and not GLA (when compared to RSA).

4. Arrows indicate increase / decrease from HY17 to HY18.

5. Arrows indicate increase / decrease from FY17 to HY18.

54

ANNEXURESRETAIL

Rm

OFFICE

Rm

INDUSTRIAL

Rm

RSA TOTAL

Rm

GOZ(1)

Rm

TOTAL

Rm

V&A(1)

Rm

Opening balance – 1 July 2017 29 588 34 732 12 586 76 906 32 536 109 422 8 705

Purchase price of acquisitions 17,35 922 - 132 1 054 518 1 572 -

Selling price of disposals 17,35 (211) - (268) (479) (1 701) (2 180) (232) (2)

Developments and capex 18,28,36 196 571 341 1 108 65 1 173 187

Fair value adjustment 750 521 197 1 468 1 043 2 511 -

Foreign currency translation - - - - (1 213) (1 213) -

Total 31 245 35 824 12 988 80 057 31 248 111 305 8 660

Long-term property assets 31 245 35 698 12 954 79 897 31 248 111 145 8 660

Classified as held for sale 20 - 126 34 160 - 160 -

Commitments 19,28,36 67 1 489 697 2 253 147 2 400 100

ANNEXURE 07:PROPERTY INVESTMENT ACTIVITIES

1. V&A Waterfront is included reflecting Growthpoint's 50% interest, GOZ is reflected at 100%.

2. Disposal relates to the sale of the bulk along with the sale of the Silo 3 apartments and the transfer of the Radisson Red from investment property to property plant and equipment.

55

35.6% 35.0% 35.6%

3.2% 3.0% 3.0%

HY17 FY17 HY18

14.5% 13.9% 14.9%

4.9% 4.8%4.8%

HY17 FY17 HY18

SOUTH AFRICA GOZ

33.2%35.6% 34.6%

2.4%

2.9%2.6%

HY17 FY17 HY18

V&A WATERFRONT

ANNEXURE 08: EXPENSE TO INCOME RATIOS (GROSS)*

* This ratio is presented where expense recoveries have been reclassified as revenue as per SA Reit Association Best Practice guidance.

38.0%38.8% 38.6% 38.5%35.6% 37.2% 18.7%19.4% 19.7%

Operating Expense Ratio Property Expense Ratio Operating Expense Ratio Property Expense Ratio Operating Expense Ratio Property Expense Ratio

56

ANNEXURE 09:LOAN EXPOSURE PER FINANCIER RSA

22%

24%

24%

14%

5%

4%

4%

2%1%

RMB

Standard Bank

Omsfin

LibFin

Absa

Investec

China Construction BankJSE (Corporate Bonds)

Nedbank

57

0%

5%

10%

15%

20%

25%

HY19 HY20 HY21 HY22 HY23 HY24 HY25

ANNEXURE 10: DEBT EXPIRY PROFILE PER FINANCIER RSA

19% 19% 21% 16% 12% 4% 9%

Absa China Construction Investec JSE (Corporate Bonds) LibFin Nedbank Omsfin RMB Standard Bank

58

0%

5%

10%

15%

20%

25%

Floating HY19 HY20 HY21 HY22 HY23 HY24 HY25 HY26 HY27 HY28 HY29

ANNEXURE 11: FIXED INTEREST RATE EXPIRY PROFILE RSA

22% 9% 18% 12% 4% 5% 0% 2%8% 16% 2%2%

59

259 277 312

2 4442 688

2 969

180

226

268 1 293

1 4261 318

471

516 587

0

1 500

3 000

4 500

6 000

HY16 HY17 HY18

ANNEXURE 12: WEALTH CREATED & DISTRIBUTED TO STAKEHOLDERS (1)

R5 133mR4 647m R5 454mRm

1. Wealth created based on a look-through principle and therefore includes RSA, GOZ and V&A Waterfront.

10.1%

27.8%

3.9%

52.6%

5.6%

27.8%

4.4%

52.4%

5.3%

10.1%10.8%

24.2%

4.9%

54.4%

5.7%

Employees Shareholders Minority interest holders Providers of debt Governments – direct taxes

60

SHARES

Opening balance 1 July 2017 2 888 462 582

Dividend reinvestment (September 2017) 45 739 890

Closing balance 31 December 2017 2 934 202 472

Treasury shares held for staff share scheme (27 248 384)

Shares in issue (net of treasury shares) 2 906 954 088

% HOLDING SHARES HELD

Government Employees Pension Fund 12.4 364 342 177

Stanlib Asset Management Ltd 5.7 166 199 403

Southern Palace Properties (Pty) Ltd 5.4 159 442 921

Coronation Fund Managers Ltd 5.2 151 833 345

Investec Asset Management (Pty) Ltd 4.5 132 738 874

Old Mutual Group 4.3 127 171 359

The Vanguard Group 4.0 117 025 871

Prudential Portfolio Managers 3.6 104 359 282

Sesfikile Capital 3.1 89 606 134

Momentum Asset Management 3.0 89 108 180

Sanlam Investment Management 3.0 86 420 163

BEE Consortium 2.6 77 666 667

Meago Asset Managers 2.4 70 181 286

Blackrock Institutional Trust Company 2.2 65 453 278

State Street Global Advisors 2.0 57 868 159

Total shareholders holding >2% 63.4 1 859 417 099

Other 36.6 1 074 785 373

Total 100.0 2 934 202 472

Foreign shareholding: 28% of institutional ownership and 22% of total shares

issued

ANNEXURE 13: SHARES ISSUED & BENEFICIAL SHAREHOLDERS HOLDING >2% AT HY18

61

HY18 FY17 HY17

Vacancies (%) 5.2 4.4 5.4

Total arrears (Rm) 76.6 60.4 82.8

Provision for bad debts (B/S) (Rm) 28.9 26.1 34.2

Bad debts (I/S) (Rm) 7.1 13.2 12.0

Average in force escalations (%) 7.7 7.8 7.6

Renewal success rate (%) 61.9 73.6 70.3

Total letting success rate (%) 64.0 85.3 72.5

Weighted average renewal growth (%) (0.5) 1.0 0.8

Weighted average future escalations on

renewals (%)7.9 7.8 7.6

Number of employees 620 630 649

Net property income per employee (R) 5 132 258 9 806 349 4 628 659

ANNEXURE 14:KEY PERFORMANCE INDICATORS RSA

The Towers, Sandton

62

HY16 HY17 HY18

16.4%

45.9%

37.7%

17.1%

45.4%

37.5%

17.0%

44.7%

38.3%

HY17 FY17 HY18

15.9%

45.1%

39.0%

16.2%

44.7%

39.1%

16.4%

45.2%

38.4%

NET PROPERTY INCOME PROPERTY PORTFOLIO VALUE

HY17 FY17 HY18

49.2%

38.5%

49.0%

39.3%

11.7%

49.5%

38.6%

11.9%

NUMBER OF PROPERTIES

ANNEXURE 15: PORTFOLIO OVERVIEW RSA (EXCL.V&A)

R2 865m R3 004m R3 182m 473 471 463 R77 032m R76 906m R80 057m

12.3%

Retail Office Industrial Retail Office Industrial Retail Office Industrial

63

45%

39%

16%

54%

23%

9%

7%4%

2% 1%

32%

27%

41%

57%22%

11%

5%3%

1% 1%

VALUE VALUEGLA GLA

ANNEXURE 16: SPLIT OF RSA PROPERTY PORTFOLIO

Office Retail IndustrialGreater JHB Western Cape Kwazulu-Natal

Pretoria Eastern Cape North West Other

64

ACQUISITIONS SECTOR DATE

PURCHASE PRICE

Rm YIELD

Remaining 58% of N1 City Mall, Goodwood, Cape Town Retail October 2017 922.1 8.0%

Lascelles, Meadowbrook, Germiston Industrial November 2017 132.0 9.3%

Total 1 054.1

ANNEXURE 17: ACQUISITIONS & DISPOSALS RSA

DISPOSALS SECTOR DATE

SELLING PRICE

Rm

PROFIT/(LOSS)

ON COST

Rm

PROFIT/(LOSS)

ON BOOK VALUE

Rm YIELD

OK Empangeni, Empangeni, Durban Retail July 2017 172.5 111.3 (2.5) 9.3%

Jet Bloemfontein, Bloemfontein Retail September 2017 38.3 14.5 3.0 9.6%

Pine Industrial Park, New Germany Industrial July 2017 76.8 28.4 1.7 8.3%

Anchor Industrial Park, Jetpark, Boksburg Industrial October 2017 70.0 31.4 3.8 9.6%

Meadowbrook, Meadowbrook, Germiston Industrial December 2017 38.5 8.8 (0.7) 11.3%

Neon, Fulcom Park, Springs Industrial December 2017 28.0 18.1 (1.0) 9.1%

Whitworth, Heriotdale Ext 8, Johannesburg Industrial August 2017 16.0 7.5 (0.2) 8.3%

Bardene, Bardene, Boksburg Industrial October 2017 14.0 4.1 1.7 11.2%

Greenhills Centre, Elandsfontein Industrial July 2017 13.4 2.1 - 10.6%

Northreef, Elandsfontein Industrial December 2017 11.1 4.6 0.9 9.3%

Total 478.6 230.8 6.7

65

DEVELOPMENTS & CAPITAL EXPENDITURE (1) SECTOR

ESTIMATED

COMPLETION DATE

HY18

Rm

Greenacres, Greenacres, Port Elizabeth Retail December 2017 39.2

Other, below R20m Retail 156.3

Total Retail 195.5

Discovery Head Office (55%), Sandhurst, Sandton Office November 2017 275.7

Lakeside 1, Centurion, Pretoria Office May 2019 79.3

144 Oxford Road, Rosebank Office September 2019 53.4

Sandton Summit, Sandton Office Vacant Land 28.1

Other, below R20m Office 134.3

Total Office 570.8

Samrand Erf 5437, Midrand Industrial December 2017 73.7

Growthpoint Industrial Estate, Erf 307, Meadowdale, Germiston Industrial January 2018 46.4

Runway Park, Mobeni, Durban Industrial July 2018 44.5

Samrand Erf 5456, Midrand Industrial November 2017 23.1

Mill Road Park, Bellville, Cape Town Industrial September 2018 22.5

Other, below R20m Industrial 130.5

Total Industrial 340.7

Total RSA 1 107.0

Development Expenditure 815.3

Capital Expenditure 291.7

ANNEXURE 18: DEVELOPMENTS & CAPITAL EXPENDITURE RSA

1. The average yield for developments is 8.0% - 9.0% on a fully let basis.

66

COMMITMENTS SECTOR

ESTIMATED

COMPLETION/

TRANSFER DATE

HY18

Rm

Developments(1) 2 017.9

River Square Shopping Centre, Three Rivers, Vereeniging Retail January 2018 37.8

144 Oxford Road, Rosebank Office September 2019 600.2

Exxaro Head Office and AECOM, Centurion Office May 2019 408.5

Discovery Head Office (55%), Sandhurst, Sandton Office April 2018 123.3

Draper on Main, Cape Town Office March 2019 112.5

Boulevard Phase 3, Umhlanga Ridge, Umhlanga Rocks, Durban Office April 2018 57.4

32 on Kloof, Cape Town Office June 2018 42.5

GZI, Wadestone Park, Wadeville, Germiston Industrial December 2018 156.5

Runway Park, Mobeni, Durban Industrial July 2018 152.8

Mill Road Park, Bellville, Cape Town Industrial September 2018 110.2

Midrand Central Business Park, Midrand Industrial November 2018 52.4

Other below R30m Various Various 163.8

Acquisitions 235.0

Exxaro Corporate Centre & vacant land, Pretoria (2) Office March 2018 130.0

Mount Edgecombe land Industrial March 2018 105.0

Total 2 252.9

ANNEXURE 19: COMMITMENTS RSA


2. Property acquired for Trading and Development purposes.

67

PROPERTIES HELD FOR SALE SECTOR

HY18

Rm

Salga House, Cape Town Office 91.0

Dunkeld Office Park, Dunkeld West, Johannesburg Office 35.0

Laser Commercial Erf 65, Clayville, Midrand Industrial 19.4

Laser Commercial Erf 2 & 3, Clayville, Midrand Industrial 9.2

Equitable Dev Co, Florida, Roodepoort Industrial 5.3

Total RSA 159.9

ANNEXURE 20: NON-CURRENT ASSETS HELD FOR SALE RSA

68

TOP 10 PROPERTIES BY VALUE

FAIR VALUE

Rm

GLA

m²

Brooklyn Mall and Design Square (75%), Brooklyn, Pretoria 2 327 55 989

Geenacres, Greenacres, Port Elizabeth 1 649 50 453

Festival Mall, Kempton Park, Johannesburg 1 644 83 362

N1 City Mall (100%), Goodwood, Cape Town 1 604 63 442

Waterfall Mall, Rustenburg 1 546 49 681

Lakeside Mall, Benoni, Johannesburg 1 493 65 366

Vaal Mall (66.6%), Vanderbijl Park, Johannesburg 1 315 44 257

La Lucia Mall, La Lucia, Durban 1 282 37 296

Kolonnade (50%), Montana Park, Pretoria 1 225 38 317

Bayside Mall, Table View, Cape Town 1 164 45 218

Sub Total 15 249 533 381

Balance of the sector 15 996 890 435

Total for the sector 31 245 1 423 816

TOP 10 TENANTS

GLA(1)

m²

Edcon Holdings Ltd 119 437

The Foschini Group Ltd 60 908

Steinhoff Africa Retail Ltd 73 182

Shoprite Holdings Ltd 141 340

Mr Price Group Ltd 57 865

Pick n Pay Stores Ltd 115 971

Truworths International Ltd 33 536

Woolworths Holdings Ltd 89 700

Massmart Holdings Ltd 66 785

Clicks Group Ltd 28 839

Sub Total 787 563

Balance of the sector 593 681

Total for the sector (excluding vacancies) 1 381 244

15.8

6.4

14.1

19.8

20.7

15.9

4.3

3.0

HY24 and beyond

By HY23

By HY22

By HY21

By HY20

By HY19

Monthly

Vacant

10.0

7.4

14.9

20.8

21.5

19.0

3.9

2.5

HY24 and beyond

By HY23

By HY22

By HY21

By HY20

By HY19

Monthly

Vacant

LEASE EXPIRY (% OF GLA) LEASE EXPIRY (% OF GROSS MONTHLY RENTAL)

ANNEXURE 21: RETAIL OVERVIEW RSA

1. Ranked in terms of gross monthly rental.

69


FAIR VALUE

Rm

GLA

m²

Investec, 100 Grayston Drive, Sandton, Johannesburg 2 200 70 945

Discovery 1 & 2 (55%), Sandton, Johannesburg (2) 1 830 -

The Woodlands, Woodmead, Johannesburg 1 762 125 715

Constantia Office Park, Roodepoort, Johannesburg 1 105 73 033

Inanda Greens, Wierda Valley, Sandton, Johannesburg 996 40 774

The Place, Sandton, Johannesburg 977 34 679

MontClare Place, Claremont, Cape Town 636 29 645

Country Club Estate, Woodmead, Johannesburg 557 33 142

Inyanda 1,3 and 4, Parktown North, Johannesburg 489 23 196

Golf Park, Bellville, Cape Town 479 30 021

Sub Total 11 031 461 150

Balance of the sector 24 793 1 296 748


TOP 10 TENANTS

GLA(1)

m²

Investec Bank Ltd 83 781

Deloitte (South Africa) 47 680

Absa Bank Ltd 21 484

Transnet 31 535

EOH Holdings Ltd 40 799

Anglogold Ashanti Ltd 19 381

Firstrand Bank Ltd 17 372

Edward Nathan Sonnenbergs Inc 14 889

Nestle South Africa (Pty) Ltd 11 986

Norton Rose SA 7 969

Sub Total 296 876

Balance of the sector 1 313 921


17.9

9.0

10.2

19.0

16.7

16.5

2.3

8.4

HY24 and beyond

By HY23

By HY22

By HY21

By HY20

By HY19

Monthly

Vacant

23.0

8.5

9.2

18.7

15.6

16.1

2.6

6.3

HY24 and beyond

By HY23

By HY22

By HY21

By HY20

By HY19

Monthly

Vacant


ANNEXURE 22: OFFICE OVERVIEW RSA


2. Discovery excluded from GLA as tenant only starts paying rental from 1 January 2018.

70


FAIR VALUE

Rm

GLA

m²

Growthpoint Business Park, Midrand 622 68 685

Montague Business Park (25%), Montague Gardens, Cape Town 364 32 487

Hilltop Industrial Estate, Elandsfontein, Johannesburg 345 76 283

Isobar, Isando, Kempton Park, Johannesburg 229 50 219

Central Park, Cape Town, Elsiesrivier, Cape Town 212 49 135

Adcock Ingram, Midrand 205 21 536

Omni Park, Aeroton, Johannesburg 198 41 331

Rivonia Crossing 2, Sunninghill, Sandton 185 19 778

Runway Park, Mobeni, Durban 179 12 160

N1 Business Park (20%), Midrand 176 21 576

Sub Total 2 715 393 181

Balance of the sector 10 276 1 851 354


TOP 10 TENANTS

GLA(1)

m²

The Bidvest Group Ltd 58 590

Adcock Ingram Holdings Ltd 27 280

Consolidated Steel Industries (Pty) Ltd 60 267

Scania SA (Pty) Ltd 23 717

Allied Electronic Corporation Ltd 30 413

Distell Ltd 45 636

Pioneer Foods Ltd 20 122

Heneways Freight Services (Pty) Ltd 25 573

Barloworld Ltd 18 238

Nestle South Africa (Pty) Ltd 16 255

Sub Total 326 091

Balance of the sector 1 825 748


12.4

11.0

11.1

18.0

19.0

22.2

2.2

4.1

HY24 and beyond

By HY23

By HY22

By HY21

By HY20

By HY19

Monthly

Vacant

12.7

10.0

13.1

15.0

18.3

24.4

2.5

4.0

HY24 and beyond

By HY23

By HY22

By HY21

By HY20

By HY19

Monthly

Vacant


ANNEXURE 23: INDUSTRIAL OVERVIEW RSA


71

TOTAL GLA

m²

VACANT AREA

m²

VACANCY

%

Balance as at 1 July 2017 5 425 006 240 978 4.4

GLA adjustments 3 804 (461)

Disposals (79 757) (174)

Acquisitions 53 124 17 442

Developments and extensions 24 072 24 072

Leases expired in the period (1) 424 477

Renewals of expired leases (2) (262 770)

New letting of vacant space (238 560)

Leases terminated 77 365

Balance as at 31 December 2017 5 426 249 282 369 5.2

ANNEXURE 24: GLA & VACANCY RECONCILIATION RSA

1. 7.8% of opening balance GLA expired during the half year under review (HY17: 12.7%).

2. Retention of 61.9% for the half year under review (HY17: 70.3%).

72

HY18 FY17 HY17

Vacancies (%) 1.2 0.8 1.1


Provision for bad debts (B/S) (Rm) 6.2 5.6 8.3

Bad debts (I/S) (Rm) - 2.7 -

Average in force escalations (%) 8.3 8.0 7.8

Renewal success rate (%) 91.9 98.2 97.1


Weighted average renewal growth (%) 4.9 7.9 6.0


renewals (%)7.5 7.9 8.1

Number of employees (100%) (1) 204 188 192


ANNEXURE 25:KEY PERFORMANCE INDICATORS V&A WATERFRONT (50%)

V&A Waterfront, Cape Town1. An additional 97 staff are employed in terms of management contract with the Radisson Red Hotel.

73

51.9%50.4%

21.2%

22.1%17.0%

18.1%9.9%

9.4%

HY16 HY17 HY18

47.5%51.7% 50.5% 51.1%

24.7%24.5% 26.0%

11.8%

12.5% 10.6%5.8%

6.8% 7.0%6.0%

5.7% 5.3%

HY17 FY17 HY18

NET PROPERTY INCOME PROPERTY PORTFOLIO VALUE

ANNEXURE 26: PORTFOLIO OVERVIEW V&A WATERFRONT (50%)

R254mR211m R299m R7 965m R8 660mR8 705m

23.7%

20.1%

8.7%

Retail Office Hotel & Residential Fishing & Industrial Retail Office Hotel & Residential Fishing & Industrial Bulk

74

51%

26%

11%

7%5%

47%

24%

20%

9%21%

31%23%

25%

95%

5%

Retail Office Fishing & Industrial Hotel & Residential Bulk

PROPERTY PORTFOLIO

BY VALUE

NET PROPERTY

INCOME

PROPERTY PORTFOLIO

BY GLA

DEVELOPED VS.

UNDEVELOPED BY VALUE

ANNEXURE 27: SPLIT OF V&A WATERFRONT PROPERTY PORTFOLIO

Developed Undeveloped

75

SECTOR

ESTIMATED

COMPLETION DATE

HY18

Rm

DEVELOPEMNETS & CAPITAL EXPENDITURE (1)

Battery Parkade Office May 2018 65.0

No 6 Silo - Radisson Red Hotel Hotel July 2017 21.0

Cruise Liner terminal Office November 2017 16.0


Total 187.0

COMMITMENTS

Dock Road Junction Parking December 2018 35.1

Battery Parkade Office May 2018 23.8

Waterway House (2) Office May 2017 (2) 18.6


Total 99.7

ANNEXURE 28: DEVELOPMENTS & COMMITMENTS V&A WATERFRONT (50%)


2. This is the practical completion date. Outstanding amount relates tenant installations.

76

HY18

Rm

HY17

Rm

INCREASE/

(DECREASE)

Gross property revenue 420 349 20.3%

Property related 397 349

Radisson Red Hotel 19 -

Workshop 17 4 -

Property expenses (121) (95) 27.4%

Property related (107) (95)

Radisson Red Hotel (11) -

Workshop 17 (3) -

Net property income 299 254 17.1%

Other operating expenses (12) (9) 33.3%

Net finance costs (7) (9) (22.2%)

Other non-distributable amounts (1) (1) 0.0%

Distributable income 279 235 18.7%

Adjustments (27) (5)

Waterway House (7) (2)

Virgin Active (4) (1)

Radisson Red Hotel (7) -

Other developments (incl. Boatshed and Hildebrand) (9) (2)

Adjusted “like-for-like” distributable income 252 230 9.6%

ANNEXURE 29: NET PROPERTY & DISTRIBUTABLE INCOME ANALYSIS V&A WATERFRONT (50%)

77

TOP 10 TENANTS (100%)

GLA(1)

m²

Allan Gray (Pty) Ltd 18 520

Nedbank Group Ltd 25 432

Legacy Hotels 16 226

Edcon Holdings Ltd 7 518

Tourvest Holdings Ltd 3 052

PWC 9 418

Sun International Hotels 17 100

Newmark Hotels 7 564

The Foschini Group Ltd 3 014

Woolworths Holdings Ltd 7 682

Subtotal 115 526

Balance of V&A 337 658

Total for V&A Waterfront (excluding vacancies) (100%) 453 184

48

8

12

4

13

14

1

HY24 and beyond

By HY23

By HY22

By HY21

By HY20

By HY19

Vacant

LEASE EXPIRY (% OF GLA)

33

10

10

8

18

21

0

HY24 and beyond

By HY23

By HY22

By HY21

By HY20

By HY19

Vacant

LEASE EXPIRY (% OF GROSS MONTHLY RENTAL)

ANNEXURE 30: V&A WATERFRONT OVERVIEW


78

TOTAL GLA

m2

VACANT AREA

m2

VACANCY

%

Balance as at 1 July 2017 223 016 1 734 0.8

GLA adjustments (10) (10)

Developments and extensions 6 309 6 309

Leases expired in the period (1) 10 462

Renewals of expired leases (2) (9 618)

New letting of vacant space (6 791)

Leases terminated 637

Balance as at 31 December 2017 229 315 2 723 1.2

ANNEXURE 31: GLA & VACANCY RECONCILIATION V&A WATERFRONT (50%)

1. 4.7% of opening balance GLA expired during the half year under review (HY17: 12.8%).

2. Retention of 91.9% for the half year under review (HY17: 97.1%).

79

HY18 FY17 HY17

Vacancies (%) (1) 2.1 1.3 1.3


Provision for bad debts (B/S) (Rm) - - -

Renewal success rate (%) (3) 35.1 81.4 95.0


Weighted average renewal growth (%) (7.8) (7.7) (4.9)


renewals (%) (2) 3.4 3.3 3.8

Number of employees 24 23 22


ANNEXURE 32:KEY PERFORMANCE INDICATORS GOZ

1. Measurements and ratios are based on income and not GLA (when compared to RSA). Vacancy has increased from 1.3% to 2.1%. Although

not material for the portfolio, it is a big percentage increase at c. 50%. The portfolio occupancy has been c. 98% for the last 5 years.

2. Weighted average escalation on entire portfolio WARR 3.3%.

3. GOZ had very few renewals in the current period, this number was negatively impacted by the non renewal of the tenant at Viola Place.

Green Square Close, Fortitude Valley, QLD, Australia

80

47.1%

53.4%

62.2%

52.9%

46.6% 37.8%

9.84

10.55

10.45

9.4

9.6

9.8

10.0

10.2

10.4

10.6

10.8

0.00

200.00

400.00

600.00

800.00

1000.00

1200.00

HY16 HY17 HY18

Office Industrial average exchange rate

26 26 25

33 31 31

HY17 FY17 HY18

NET PROPERTY INCOME NUMBER OF PROPERTIES

65.6%

66.0%

65.2%

34.4%

34.0% 34.8%9.9

10.04

9.66

9.4

9.5

9.6

9.7

9.8

9.9

10.0

10.1

0.00

5000.00

10000.00

15000.00

20000.00

25000.00

30000.00

35000.00

HY17 FY17 HY18

Office Industrial closing exchange rate

PROPERTY PORTFOLIO VALUE

ANNEXURE 33:PORTFOLIO OVERVIEW GOZ

R1 071mR826m R1 113m 5759 56R32 536mR31 631m R31 248m

NUMBER OF PROPERTIES

AUD/ZAR AUD/ZAR

Office Industrial Office Industrial Office Industrial

81

66%

34%29%

26%

27%

6%

6%5%

1%

29%

71%

42%

17%

15%

12%

11%2%

1%

VALUE (AUD) VALUEGLA GLA

ANNEXURE 34:SPLIT OF GOZ PROPERTY PORTFOLIO

Office IndustrialVictoria Queensland New South Wales South Australia

Western Australia ACT Tasmania

82

ACQUISITIONS (1) SECTOR DATE

HY18

Rm

HY18

AUDm

2 Hugh Edwards Drive, Perth Airport, Western Australia Industrial October 2017 185.7 17.4

58 Tarlton Crescent, Perth Airport, Western Australia Industrial October 2017 157.6 14.8

10 Hugh Edwards Drive, Perth Airport, Western Australia Industrial October 2017 92.3 8.7

36 Tarlton Crescent, Perth Airport, Western Australia Industrial October 2017 82.2 7.7

Total 517.8 48.6

ANNEXURE 35:ACQUISITIONS & DISPOSALS GOZ

DISPOSALS

1231-1241, Sandgate Road, Nundah, Queensland (2) Office July 2017 1 054.1 103.5

522-550 Wellington Road, Mulgrave, Victoria (2) Industrial December 2017 646.8 65.9

Total 1 700.9 169.4

1. The recently acquired Perth Airport properties are managed/ reported as 1 property.

2. Disposals show at book value.

83

DEVELOPMENT & CAPITAL EXPENDITURE SECTOR

ESTMATAED

COMPLETION DATE

HY18

Rm

HY18

AUDm

Building 1 & 3, 572-576 Swan Street, Richmond, Victoria Office December 2017 18.4 1.7

333 Ann Street, Brisbane, Queensland Office December 2017 13.1 1.2

5 Viola Place, Brisbane Airport, Queensland Industrial May 2018 14.7 1.4

Other Various 18.5 2.1

Total 64.7 6.4

ANNEXURE 36:DEVELOPMENTS & COMMITMENTS GOZ

COMMITMENTS (1)

1 Charles Street, Paramatta, New South Wales Office June 2019 59.4 6.0

Building 2, 572-576 Swan Street, Richmond, Victoria Office June 2019 37.6 3.8

120-132 Atlantic Drive, Keysborough, Victoria Industrial December 2028 24.8 2.5

1 500 Ferntree Gully Road, Knoxfield, Victoria Industrial August 2024 24.8 2.5

Total 146.6 14.8

1. Due to expansion and lessor works clauses.

84

HY18

AUDm

HY17

AUDm

ICREASE /

(DECREASE)

Gross property revenue 126.0 131.5 (4.2%)

Property expenses (19.6) (18.0) (8.9%)

Net property income 106.4 113.5 (6.3%)

Adjustments (20.4) (26.2)

Acquisitions and developments (18.0) (8.1)

Disposals (2.4) (12.2)

GMF distribution - (5.9)

Adjusted “like-for-like” net property income 86.0 87.3 (1.7%)

Office 48.9 49.3 (1.0%)

Industrial 37.1 38.0 (2.5%)

ANNEXURE 37:NET PROPERTY INCOME ANALYSIS GOZ

85


FAIR

VALUE

Rm

GLA

m²

1 Charles Street, Parramatta, NSW Office 3 069 32 356

70 Distribution Street, Larapinta, QLD Industrial 2 129 76 109

75 Dorcas Street, South Melbourne, VIC Office 1 822 23 811

20 Colquhoun Road, Perth Airport, WA Industrial 1 584 80 374

Optus Centre, 15 Green Square Close, QLD Office 1 376 16 442

Building C, 219 - 247 Pacific Highway, Artarmon, NSW Office 1 227 14 375

333 Ann Street, Brisbane, QLD Office 1 189 16 394

3 Murray Rose Avenue, Sydney Olympic Park, NSW Office 995 13 423

5 Murray Rose Avenue, Sydney Olympic Park, NSW Office 990 12 386

CB1, 22 Cordelia Street, South Brisbane, Queensland Office 942 11 529

Sub Total 15 323 297 199

Balance of GOZ 15 925 706 330

Total for GOZ 31 248 1 003 529

TOP 10 TENANTS

GLA(1)

m²

Woolworths 282 041

NSW Police Department 32 356

Commonwealth of Australia 24 370

Linfox 58 077

GE Capital Finance Australasia(²) 15 957

Samsung Electronics 13 423

Lion 12 317

Australia and New Zealand Banking Group 13 744

Jacobs Group 8 207

Central SEQ Distributor Retailer Authority 7 663

Sub Total 468 155

Balance of GOZ 510 897

Total for GOZ (excluding vacancies) 979 052

56

20

6

12

2

2

2

HY24 and beyond

By HY23

By HY22

By HY21

By HY20

By HY19

Vacant

LEASE EXPIRY (% OF INCOME)

ANNEXURE 38:GOZ OVERVIEW


2. Leases to Country Road/ David Jones, with a weighted average lease term commencement of 14.5 years, will replace the existing lease to GE Capital Finance Australasia upon the lease expiry.

86

TOTAL GLA

m2

VACANCY(1)

%

Balance as at 1 July 2017 1 053 148 1.3

GLA adjustments (442)

Disposals (81 124)

Acquisitions, developments and extensions 31 947

Balance as at 31 December 2017 1 003 529 2.1

ANNEXURE 39:GLA & VACANCY RECONCILIATION GOZ

1. Vacancy ratio is based on income and not GLA (when compared to RSA).

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Deloitte, La Lucia Ridge, Durban

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