1 Redefine pre-close investor roadshow for the half year ending 29 February 2020
Our conversation 2 Strategic overview 1 Strategic overview 2 Property asset platform Property asset platform 3 Financial insights Financial insights Redefine pre-close investor roadshow for the half year ending 29 February 2020
Strategic overview 3 3 Strategic overview Section 1 Purpose has become the engine of sustained value creation Property asset platform Financial insights Redefine pre-close investor roadshow for the half year ending 29 February 2020
Our operating context 4 There is no medium-term prospect of improved property fundamentals Strategic overview Growth prospects will remain tepid due to Eskom The outbreak of the Coronavirus poses a new humanitarian threat and arrives at a precarious time for (a major source of fiscal and general macroeconomic the world economy risk), a slow reform agenda and the weak global environment A lower but still relevant probability of a slowdown in the US and Eurozone in a context of growing financial Property asset platform vulnerabilities and high policy uncertainty (Brexit, trade disputes) and increased geopolitical tensions (Middle East) weigh heavily on global economic prospects Persistently weak business and consumer sentiment with ongoing bouts of load shedding are likely to have a significant negative effect on 2020 Source: RMB Financial insights Operating in a continued vacuum of catalysts to Fiscal policy is a huge problem with stuttering tax stimulate meaningful and sustained economic change, collections and an apparent unwillingness of the we can expect soft local property fundamentals government to cut the public sector payroll to prevail in the medium term Redefine pre-close investor roadshow for the half year ending 29 February 2020
What keeps us awake at night 5 World Economic Forum ranked climate action failure as its top global risk in terms of impact in 2020 Uncertainty pertaining to long-term impact of geo-political and socio-economic growth factors Strategic overview Impact of disruptive technologies Deteriorating public/state infrastructure and poor administrative delivery locally Inability to effectively manage our reputation Financial market volatility Property asset platform Inability to be environmentally resilient Damage to property and security-related threats Long-term impact of failing to transform at an acceptable rate Increased competition for tenants, capital and property assets Failure to comply with local and international laws and regulations Financial insights Inability to maintain strong ethical and governance culture Inability to prevent computer fraud and respond to cyber security attacks Misalignment with international partners (in-country) Elevated top risk Unchanged top risk Reduced exposure The above items are extracted from our strategic risk register and reflect our view of inherent risk before application of any mitigating actions Redefine pre-close investor roadshow for the half year ending 29 February 2020
Strategy 6 Our purpose is to create and manage spaces in a way that changes lives Strategic overview We adopt an agile and uncompromising ethical approach to the way we do business Our focus is on real estate and related investments – not a particular sector ▪ We will continue to build an asset platform that sustains organic growth through: Property asset platform − Continuously improving, expanding and protecting our domestic portfolio − Recycling capital through the sale of assets at the end of their investment life cycle − Unlocking value through active asset management opportunities in offshore markets − Driving innovative business projects to ensure we remain relevant and futureproof our business ▪ ▪ ▪ We continue to broaden our We continue to deepen our We focus on proactively Financial insights interpretation of sustainability, understanding of our managing and enhancing our stakeholders’ needs, while looking beyond environmental reputation in all that we do considerations managing their impact on us and our impact on them Redefine pre-close investor roadshow for the half year ending 29 February 2020
Focusing on what matter most 7 The critical levers that impact our ability to create value Strategic overview Strategic matters Property asset platform Grow Invest Optimise Operate Engage Reputation Strategically Capital Efficiently Talent Managing capital in a Operating responsibly Harnessing our Creating sustained people’s skills, Living our purpose constrained and costly in a low growth, rising value for all our environment administered cost abilities and attitude stakeholders context Financial insights Strategic objectives Redefine pre-close investor roadshow for the half year ending 29 February 2020
Strategic priorities 8 Our purpose-driven, strategic approach is appropriate for the current environment How we will get there in 2020 Anticipated outcome Strategic overview Safeguard Redefine’s brand Improved stakeholder perceptions Remain relevant to stakeholders ESG considerations embedded in all areas of the business Heighten focus on ESG Continued focus on asset quality Improved quality and relevance of local portfolio Property asset platform Offshore expansion through development activity Expanded offshore logistics platform Restoring value of underperforming asset TNAV per share lifted by 6% Right-size asset footprint to capital base Improved forward yield Introduce dividend pay-out policy Lowered LTV ratio to comfort zone of below 40% Focus on organic growth Maintained active portfolio margin Expand non-GLA income sources Financial insights Roll out solar PV interventions Significantly reduced non-recurring income Proactive utilities management Unlock procurement efficiencies Maintained staff engagement levels Instil a culture of innovation and accelerate transformation Improved transformation across all levels Redefine pre-close investor roadshow for the half year ending 29 February 2020
Environmental, Social and Governance 9 The role of ESG has been elevated in every aspect of what we do Apart from one, all resolutions tabled at the AGM were passed by the requisite majority of shareholders - it is worth noting: Strategic overview 2020 2019 Action Number of shares voted 77% 76% Participation to be encouraged Dividend re-investment option approval 86% 96% A trend to watch Remuneration policy approval 92% 77% To be continuously reviewed Implementation of remuneration policy 71% 76% One-on-one engagement with shareholders Issue of shares to acquire assets 76% 73% Change to 5% of shares in issue Issue of shares for cash Withdrawn 93% Change to 5% of shares in issue Property asset platform Staff are highly Leon Kok to succeed Filling the financial director All board committees Level 3 BBBEE engaged with a score David Rice as chief role is a strategic comprise independent contributor status of 87% outperforming operating officer effective opportunity to address non-executive maintained the global and local 1 September 2020 diversity at executive level directors benchmark of 64% Financial insights Received an A (CDP Achieved AAA ethics Progress in transforming Supplier Engagement) We continue to hold our Actively recruiting for rating from Ethics Monitor senior management rating and the only South position as the SA REIT an additional non- – up from AA rating in 2019 through three new African company included in with largest solar PV executive director to and the third company to appointments the 2019 Supplier footprint bolster skills ever achieve this Engagement leader board Redefine pre-close investor roadshow for the half year ending 29 February 2020
Property asset platform 10 10 Strategic overview Section 2 Positioning the portfolio to withstand prevailing conditions Property asset platform Financial insights Redefine pre-close investor roadshow for the half year ending 29 February 2020
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