AGENDA Introduction and Highlights Financial Review - - PowerPoint PPT Presentation

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 Introduction and Highlights  Financial Review  Operational Overview

• RSA
• GOZ
• V&A

 Acquisitions, Disposals, Developments and Commitments  Sustainability and CSI  Prospects  Annexures

AGENDA

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INTRODUCTION TO GROWTHPOINT

 Fully integrated internally managed property company employing 457 staff

R13,1 billion

Office

R14,6 billion R7,3 billion R13,1 billion

AUD 1,57 billion

Industrial Australia V&A Waterfront Office Industrial Retail

 The largest listed property company on the JSE with property assets valued at R53,1 billion including 100% of Growthpoint Properties Australia (“GOZ”) and 50% of the V&A Waterfront in Cape Town  Market capitalisation of R40,1 billion at 30 June 2012 (R23.00 per linked unit)  Diversified property portfolio comprising 403 properties in RSA, 41 properties in Australia which is 64.5% owned and a 50% interest in the properties of the V&A Waterfront

R5,0 billion

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HIGHLIGHTS FOR THE YEAR UNDER REVIEW

33.2% Return to investors for the year Capital growth 25.6% Income yield 7.6% Distribution per linked unit 6.1% growth 139,0 cents Repayment of CMBS Notes New equity raised via placement GOZ acquires office properties and developments totalling R1,5 billion additional investment in Growthpoint Properties Australia R2,0 billion R1,8 billion AUD 346,2 million Market value Jun 2012 R4,3 billion Total cost Jun 2012 R3,1 billion

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HIGHLIGHTS FOR THE YEAR UNDER REVIEW

37.1% Return on R3,1 billion Australian investment for the year Capital growth 25.4% Income yield 11.7% New equity raised via Distribution Re- Investment Plan (supported by 42.0%

• f unit holders on average)

Vacancies Formalisation of sector-specific development parameters with a current development pipeline of Increase in unsecured debt to 39.0%

• f total RSA borrowings by increasing

corporate bond program by Growthpoint’s foreign unitholding R959,9 million Jun 2011 5.0% Jun 2012 4.0% R1,6 billion R1,5 billion Jun 2011 11.8% Jun 2012 15.3%

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HIGHLIGHTS FOR THE YEAR UNDER REVIEW

Inclusion in JSE – Socially Responsible Investment Index (SRI) Honeycomb BEE rating Level 4 Investment Analysts’ Award Best reporting and communication in financial services sector

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GROWTH IN DISTRIBUTION PER LINKED UNIT

51,1 56,3 59,1 63,9 67,8 55,4 58,3 62,1 67,1 71,2 106,5 114,6 121,2 131,0 139,0 30 60 90 120 150 FY2008 FY2009 FY2010 FY2011 FY2012 Final distribution Interim distribution Cents

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GROWTH IN TANGIBLE ASSETS AND MARKET CAPITALISATION

Cents R’bn 400 800 1200 1600 2000 2400 10 20 30 40 50 60 Tangible assets (R’bn) Market cap (R’bn) Unit price (cents) NTAV per unit (cents)

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SIMPLIFIED CONSOLIDATED INCOME STATEMENT

Jun 2012 R’ million Jun 2011 R’ million Increase Gross property revenue 5 107 4 410 15.8% RSA 4 096 3 803 7.7% GOZ 1 011 607 66.6% Property expenses (1 102) (1 001) 10.1% RSA (997) (948) 5.2% GOZ (105) (53) 98.1% Net property income 4 005 3 409 17.5% Other operating expenses (176) (135) 30.4% Net property income after operating expenses 3 829 3 274 17.0% Finance costs (1 677) (1 237) 35.6% RSA (1 276) (950) 34.3% GOZ (401) (287) 39.7% Finance income 425 107 297.2% Investment income from V&A – distributable 369 18 1950.0% Investment income from V&A – non-distributable (76)

• 100.0%

Other finance income 132 89 48.3% Adjustment for NCI, foreign exchange & taxation (excl CGT & deferred tax) (182) (72) 152.8% Profit before debenture interest 2 395 2 072 15.6% Distribution for the year 2 395 2 072 15.6%

Note: Average exchange rate at R8.01 /AUD (Jun 2011: R6.91/AUD) for GOZ 50% interest in V&A Waterfront included for full year in Jun 2012 (Jun 2011: 23 days)

32.1%

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EXPENSE TO INCOME RATIOS

Property expense ratio (%) Operating expense ratio (%)

RSA V&A GOZ

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27.4% 27.6% 26.7% 15.1% 14.3% 16.7%

Property expense ratio (%) Operating expense ratio (%) Property expense ratio (%) Operating expense ratio (%)

26.0% 6.1% 0% 5% 10% 15% 20% 25% 30% 35% Jun 2012 10.4% 8.7% 11.4% 4.7% 5.6% 5.3% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% Jun 2012 Jun 2011 Jun 2010 24.3% 24.9% 24.5% 3.1% 2.7% 2.2% 0% 5% 10% 15% 20% 25% 30% 35% Jun 2012 Jun 2011 Jun 2010

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CONSOLIDATED BALANCE SHEET (EXTRACTS)

Jun 2012 R’ million Jun 2011 R’ million Increase/ (decrease) Property portfolio * 48 106 40 919 17.6%  RSA 34 988 32 495 7.7%  GOZ 13 118 8 424 55.7% 50% Investment in V&A Waterfront 4 912 4 950 (0.8%) Borrowings ** 19 731 19 093 3.3%  RSA 13 613 14 249 (4.5%)  GOZ 6 118 4 844 26.3% Linked unitholders’ interest (NAV) 28 543 24 884 14.7%  RSA 27 653 24 325 13.7%  GOZ 890 559 59.2%

* Includes R515m of properties reclassified as held for sale (Jun 2011 – R539m) ** Excludes fair value adjustments Note: Closing exchange rate at 30 Jun 2012 R8.35/AUD (Jun 2011 – R7.24/AUD)

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PROPERTY PORTFOLIO

Annexures RSA Jun 2012 R’ million GOZ Jun 2012 R’ million Total Jun 2012 R’ million V&A Jun 2012 R’ million Balance at 1 Jul 2011 32 495 8 424 40 919 4 783 Acquisitions 3 & 19 575 2 283 2 858

• Disposals

4 & 19 (644) (43) (687)

• Foreign exchange translation
• 1 349

1 349

• Developments and capital

expenditure 883 831 1 714 128 Sub-total 33 309 12 844 46 153 4 911 Fair value adjustment* 1 679 274 1 953 39 Balance at 30 Jun 2012 34 988 13 118 48 106 4 950 Long-term property assets 34 473 13 118 47 591 4 950 Properties held for sale 5 515

• 515
• * Fair value adjustment represents 4.2% of investment property portfolio (excl V&A Waterfront)

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BORROWINGS – LOAN TO VALUE & INTEREST COVER RATIO

RSA

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

GOZ

LTV * Interest cover ratio

NET ASSET VALUE & NET TANGIBLE ASSET VALUE

times % times %

NAV (Per linked unit consolidated) NTAV (Per linked unit consolidated)

* Based on nominal value of interest bearing borrowings and net of cash balances 1601 1499 1365 1638 1563 1444

200 400 600 800 1000 1200 1400 1600 1800 Jun 2012 Jun 2011 Jun 2010 Cents

33.9% 37.9% 29.9% 3.5 3.2 3.1 1 2 3 4 5 6 7 8 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Jun 2012 Jun 2011 Jun 2010 44.4% 55.4% 53.9% 2.2 1.9 1.7 1 2 3 4 5 6 7 8 0% 10% 20% 30% 40% 50% 60% Jun 2012 Jun 2011 Jun 2010

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BORROWINGS

Jun 2012 R’ million % of total RSA debt Jun 2011 R’ million % of total RSA debt RSA Secured debt: 8 303 61.0% 11 249 78.9%  Bank debt 6 853 50.3% 8 080 56.7%  Institutional financier 1 450 10.7% 1 200 8.4%  CMBS

• 1 969

13.8% Unsecured debt: 5 310 39.0% 3 000 21.1%  Bank debt 2 000 14.7% 2 000 14.1%  Corporate bonds 2 510 18.4% 1 000 7.0%  Commercial paper 800 5.9%

• Total RSA debt

13 613 100.0% 14 249 100.0% GOZ Secured debt:  Bank debt 6 118* 4 844* Consolidated debt 19 731 19 093

Note: Refer to Annexure 15 for a breakdown of debt * Includes a cumulative foreign exchange difference of R1,1 billion (30 Jun 2011: R379,0 million)

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BORROWINGS (CONT’D)

 R750,0 million bond issue (GRT05) in Jan 2012 utilised for additional investment in GOZ  Total DRIP of R959,9 million utilised for acquisitions, capital expenditure and reduction

• f debt

 RSA: 83.1% (2011: 77.7%) of interest rates fixed for a weighted average of 4.9 years (2011: 5.3 years)  Unutilised committed facilities (RSA) available of R2,1 billion  Growthpoint currently enjoys the following Moody’s ratings, with a stable outlook:

 Global long-term Baa3  Global short-term P-3  National long-term A-2.za  National short-term P-2.za

 Subsequent to 30 Jun 2012 :  R400 million commercial paper issue rolled and downscaled to R300,0 million at JIBAR + 21 basis points  R400 million commercial paper issued rolled and upscaled to R500,0 million at JIBAR + 21 basis points

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OPERATIONAL OVERVIEW

RSA

19 The Place, 1 Sandton Drive, Sandton

SIMPLIFIED INCOME STATEMENT (EXTRACTS) RSA

Jun 2012 R’ million Jun 2011 R’ million Increase Gross property revenue 4 096 3 803 7.7%  Retail 1 441 1 374 4.9%  Office 1 712 1 555 10.1%  Industrial 943 874 7.9% Property expenses (997) (948) 5.2%  Retail (401) (390) 2.8%  Office (390) (367) 6.3%  Industrial (206) (191) 7.9% Net property income 3 099 2 855 8.5% Other operating expenses (128) (101) 26.7% Net property income after operating expenses 2 971 2 754 7.9% Finance costs (1 276) (950) 34.3% Finance income 416 101 311.9% Investment income from V&A 369 18 1950.0% Investment income from V&A – non-distributable (76)

• 100.0%

Other finance income 123 83 48.2% Taxation (excl CGT and deferred tax) 2 (1) 300.0% Profit before debenture interest 2 113 1 904 11.0%

Note: 50% interest in V&A Waterfront included for full year in Jun 2012 (Jun 2011: 23 days)

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CONSOLIDATED OPERATIONS – RSA (EXCLUDING V&A)

Jun 2012 Jun 2011 Vacancies (%) 4.0% 5.0% Total arrears (R’million) 32,6 34,8 Bad debts (R’million) 7,8 9,6 Average in force escalations (%) 8.4% 8.3% Renewal success rate (%) 75.2% 65.8% Weighted average renewal growth (%) 2.7% 3.1% Weighted average future escalations on renewals (%) 8.1% 8.1% Number of employees 457 456 Net Property Income per employee (R) 6 781 181 6 260 964

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RSA - RETAIL

 Trading density growth remains above the IPD benchmark notwithstanding construction activity at various centres  Rent/Turnover ratios are affordable, resulting in positive rent reversions at renewal  Vacancies, due to redevelopments, will reduce significantly with the completion of the redevelopment at Brooklyn Mall  Demand for space at Top 16 centres is robust with national retailers seeking expansion opportunities  Entry of new international retailers to SA market provides further opportunity to enhance tenant mix albeit we are not expecting a massive inflow  Costs are under control but subject to pressure  Redevelopments/Refurbishments/Extensions: R780 million next financial year (Brooklyn Mall, Kolonnade, River Square, Northgate, Waterfall Mall and Walmer Park)

Vacancy: Jun 2012 % Jun 2011 % Total portfolio 3.1 2.9 Top 10 centre vacancy 1.6 1.3 Balance of portfolio 4.4 4.3 Arrears: R’million R’million Total 14,8 16,9 Bad debt provision 5,2 5,3 Renewals: % % Renewal success rate 81.1 81.2 Renewal rental growth 6.7 3.5

Booklyn Mall, Pretoria

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RSA - OFFICE

 Notwithstanding challenging market conditions, vacancies have been reduced from 8.1% to 5.8%, significantly outperforming the national average for Q2: 2012 of 10.5%  New letting of 108 119m² was achieved due to continued focus by our teams and by offering attractive incentives to brokers and tenants  142 665m² of leases expiring in the year were renewed, improving the renewal success rate to 74.6%. The renewal growth rate has been under pressure due to the tougher market environment  Eight new developments and major redevelopments, totalling 44 634m² have been completed or are in progress. Two of the developments achieved Green Star certifications from GBCSA  Arrears have been kept under control through continued proactive credit control, ending the year at 5.4% of collectables  Maximising rental growth, keeping costs under control and exploring new acquisition and development opportunities will be key future focus areas

Vacancy: Jun 2012 % Jun 2011 % Total portfolio 5.8 8.1 Arrears: R’million R’million Total 10,9 8,2 Bad debt provision 6,2 5,8 Renewals: % % Renewal success rate 74.6 57.5 Renewal rental growth (1.5) 2.1

Summer Square, Rivonia

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RSA - INDUSTRIAL

 Trading conditions are sound. Contradicts negative factory

• utput data and sentiment

 Continued positive demand for warehousing and distribution facilities (>10 000m²)  Performance

• f

mini and midi units still under

• pressure. Highest vacancies and lowest growth

 Increasing demand for manufacturing facilities  Vacancy levels expected to remain at current levels. Arrears management remains key area of focus  New development enquiries increasing, however land prices remain high  Utility costs and impact of rates increases remain an area of concern  Strategy:

 Pursue development opportunities on existing land holdings  Redevelop properties in key nodes  Pursue acquisition opportunities if financially viable  Dispose non-performing properties into “Seller’s” market

Vacancy: Jun 2012 % Jun 2011 % Total portfolio 3.4 4.3 Arrears: R’million R’million Total 6,9 9,7 Bad debt provision 2,8 5,7 Renewals: % % Renewal success rate 74.0 63.1 Renewal rental growth 4.0 7.1

Ellerines, Cape Town

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AUSTRALIA – GOZ

33-39 Richmond Road, Keswick, SA

OPERATIONAL OVERVIEW

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Jun 2012 R’ million Jun 2011 R’ million Increase Gross property revenue 1 011 607 66.6% Property expenses (105) (53) 98.1% Net property income 906 554 63.5% Other operating expenses (48) (34) 41.2% Net property income after operating expenses 858 520 65.0% Finance costs (401) (287) 39.7% Finance income 9 6 50.0% Adjustment for non-controlling interest, foreign exchange difference and taxation (excl CGT and deferred tax) (184) (71) 159.2% Profit before debenture interest 282 168 67.9% Distribution for the year 282 168 67.9%

Note: Average exchange rate R8.01/AUD (2011: R6.91/AUD) for GOZ The number of properties in Australia has increased from 37 in Jun 2011 to 41 in Jun 2012. Refer to Annexure 21 for net property income like for like growth.

SIMPLIFIED INCOME STATEMENT (EXTRACTS) GOZ (100%)

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GROWTHPOINT PROPERTIES AUSTRALIA – GOZ (CONT’D)

LARGER PROPERTY PORTFOLIO/ GREATER DIVERSIFICATION STRONG OPERATING PERFORMANCE CAPITAL MANAGEMENT

 Statutory profit: AUD49,5 million; 14.0% above FY2011  Distributable income: AUD57,7 million; 17.7 cps; 58.5% above FY2011  Distributions paid and provided of AUD57,4 million; 17.6 cps – above guidance & 2.9% above FY2011 result  All Group operating expenses, inclusive of interest expense, as a percentage of net property income have reduced to 51% from 58% in the prior year  AUD1,6 billion of property assets  A concentration in office 47% of portfolio value and industrial 53% of portfolio value  Acquired, or contracted to acquire, 6 properties during FY2012, for a total price of AUD346,2 million (before transaction costs), at an average initial yield of 8.9%  Greater diversification of tenants and geographic locations  Raised or issued equity in excess of AUD640 million over the last 3 years, driving over 250% growth of the property portfolio  Recently introduced a distribution reinvestment plan  Debt facilities of the Group total AUD835 million, with an average duration of 3.5 years. No refinancing requirement until December 2014  Cost of capital reducing over time – ASX price above NTA, whilst average cost of debt has fallen (restructuring swaps plus incremental debt at lower rates)

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GROWTHPOINT PROPERTIES AUSTRALIA – GOZ (CONT’D)

STRONG FUNDAMENTALS FOR PROPERTY & A-REIT INVESTMENT QUALITY PROPERTY PORTFOLIO

 GOZ owns a diversified portfolio of modern, well leased office and industrial properties,

• ccupied by quality tenants, with a rising rental income

 Limited lease expiry risk in the next 3 years: FY13 – 0.8%, FY14 – 7.5%, FY15 – 6.5% of rental income  WALE: 7.2 years; Occupancy: 99.7%; WARR: 3.2%; WACR: 8.3%  Top 5 tenants: Woolworths, General Electric, Commonwealth Government, Coles Group and Sinclair Knight Merz  Increase into office market with strategic positioning into Brisbane  Strong AUS economic growth has continued in FY12  There is a limited supply of new developments in major office and industrial markets. Tenants seeking new quality accommodation have fewer choices  The spread between property yields or capitalisation rates and the long-term government bond rate is historically high  A-REIT sector has outperformed other asset classes in the last 6 months. Domestic and global investors are chasing “yield” and a safer haven for funds

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OPERATIONAL OVERVIEW

V&A WATERFRONT

Victoria and Alfred Waterfront, Cape Town

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SIMPLIFIED INCOME STATEMENT (EXTRACTS) V&A (50%)

Jun 2012 V&A R’ million Jun 2011 V&A R’ million Gross property revenue 412 25 Property expenses (107) (8) Net property income 305 17 Other operating expenses (25)

• Net property income after operating expenses

280 17 Net finance income 12 1 Taxation (excl CGT and deferred tax) 1

• Profit before debenture interest

293 18 Distribution for the year 293 18 Interest paid to Growthpoint 369 18 Interest paid to Growthpoint – exceeding distributable income (76)

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V&A WATERFRONT (CONT’D)

RETAIL  Retail sales increased by 12.8% measured against the comparative 12 month period  Footfall consistently strong with 2.5% growth for the year , putting annual visitorship in excess of 21,9 million  Vacancies in the retail portfolio reduced from 11.8% at June 2011 to 4.6% at June 2012 following improved letting at the Clock Tower after the refurbishment, whereby weaker retail space was converted to office space. The Victoria Wharf vacancy is at 1.9% following the letting of some large spaces and is expected to reduce further following the take up of remaining vacancies OFFICE  Office vacancies have been reduced to 2.4% at June 2012 from 3.3% at June 2011 with just over 2 000m² remaining vacant  73% of re-developed Clock Tower has been let  Tenant retention is 100% for the period  The development of a 18 100m² office space in the Silo precinct is under way for Allan Gray with completion expected in September 2013

Vacancy: Jun 2012 % Jun 2011 % Total portfolio 1.6 3.5 Arrears: R’million R’million Total 38,1 23,6 Bad debt provision 19,9 14,9 Renewals: % % Renewal success rate 83.7

• Renewal rental growth

2.7

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V&A WATERFRONT (CONT’D)

HOTEL  Reduced hotel occupancy levels and average rates per room negatively impacted on turnover rental from the hotel and leisure sector  The expectation is for this to improve slightly over the coming 12 months and we continue to work closely with the hotel

• perators to help ease the current situation

INDUSTRIAL AND FISHING INDUSTRY  The industrial portfolio with it’s exposure to the fishing industry remains stable with 100% occupancy during the period  The recent decision by Home Affairs banning cruise liners from docking at the V&A was detrimental, however positive steps are being taken to have this decision reversed and in the meantime the focus has changed to target vessels servicing the

• il exploration and research industries

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V&A WATERFRONT (CONT’D)

DEVELOPMENT AND LEASING UPDATE  Allan Gray development currently on track for completion in September 2013  Food court refurbishment to be completed early November 2012  A small residential development adjacent to the Allan Gray

• ffice development to be launched early 2013

 “Zara” opened on Friday, 17 August 2012 and is the first Zara store to open in the Western Cape  Terms agreed with “Topshop” for the first Western Cape store to open early in 2013  Lease signed with “Moyo” for a new concept design restaurant in the old “Paulaner Brauhaus” space in the Clock Tower precinct with opening scheduled for the Festive Season  First Food & Wine market known as “Market on the Wharf” to

• pen in the ex Musica space adjacent to Nobel Square

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Retail Office Industrial GOZ Total V&A Purchase price of acquisitions 424 146 5 2 283 2 858

• Selling price of disposals

288 191 165 43 687

• Developments and capex

174 350 359 831 1 714 128

Note: Refer to Annexures 3, 4 and 19 for yields on Acquisitions and Disposals

 In aggregate, RSA properties sold at R1,0 million profit on book value and R184 million profit on cost  RSA Properties (excl V&A) where amounts in excess of R30,0 million were spent on development during the period include:

 Brooklyn/Design Square 75% (retail) R36,2m  OK Empangeni (retail) R32,0m  Mayfair on the Lake (office) R55,0m  Grenville (industrial) R74,8m  Greenbushes (industrial) R72,4m  Growthpoint Industrial Estate (industrial) R33,9m  Adcock Ingram (industrial) R32,0m

ACQUISITIONS, DISPOSALS AND DEVELOPMENTS

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 Rosebank:

 35 000m² office development near Rosebank Gautrain Station  Estimated development value – R700m  Commencement – will be tenant driven

DEVELOPMENTS

 MTC:

 6 700m² office development underway opposite Midrand Gautrain Station  2 500m² let to Gautrain Management Agency  Development value – R105m  Completion – 31 May 2013

 Lakeside Centurion:

 25 000m² office development to be developed in phases  Phase 1 underway – 5 000m²  Development value Phase 1 – R74m  Completion Phase 1 – 31 December 2012

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RSA Sector R’ million Commitments for developments Brooklyn/Design Square, Brooklyn, Pretoria Retail 110,8 Waterfall Mall, Rustenburg Retail 215,8 Hatfield Festival, Hatfield, Pretoria Office 200,6 MTC, Midrand Office 98,8 Meadowbrook Estate, Meadowbrook, Germiston Industrial 81,5 Other below R50,0 million 203,1 TOTAL 910,6 Commitments for acquisitions Menlyn Corner, Menlyn, Pretoria Office 213,0 Deloitte & Touche KZN, La Lucia Ridge, Durban Office 113,4 Willowbridge Office Park, Bellville, Cape Town Office 74,1 Other below R50,0 million 0,8 TOTAL 401,3 GOZ AUD’ million Development commitments for Energex and Fox Sports Office 61,7 TOTAL 61,7 V&A R’ million Allan Gray (Growthpoint’s 50% share) Office 207,6 Other below R50,0 million 15,2 TOTAL 222,8

COMMITMENTS

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SUSTAINABILITY AND CSI

 Sustainability:

 Founding Member of the GBCSA  Pursuing Green Star accreditation in new developments with two “Four Star Green Star” ratings achieved  Reducing resource consumption – energy efficiency projects focusing on LED retrofit and HVAC resulted in savings of 10,4 million kWh  Exploring alternate clean energy sources – partnered with Eskom on rooftop solar project at Lincoln on the Lake in Umhlanga Ridge resulting in generation capacity of 87,000 kWh per annum  Carbon Disclosure – now the leading real estate player in Africa with a score of 83%

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SUSTAINABILITY AND CSI (CONT’D)

 CSI Initiatives:

 Property Point – small business development programme that develops SMME’s in the property

• sector. R80 million in procurement opportunities facilitated and 420 jobs created

 Bursary programme – offered to students wanting to pursue a career in property through SAPOA and Growthpoint directly  Growsmart – an inter-schools competition reaching over 60 000 learners promoting literacy amongst scholars of the Western Cape – received a national award from the SACSC and 3 international awards from the ICSC, including one for the best CSI campaign globally  Bricks and Mortar Projects – We support infrastructure development projects in under resourced communities. Projects include the Zikhuliseni Skills Centre in Diepsloot, the Zolile Malindi Community Centre in Mfuleni and the Rylands Primary school hall in Cape Town  Staff Involvement Projects – “Helping and Loving Others” aka HALO is a charitable project run by a committee of Growthpoint staff members. These staff give of their personal time to assist charities and people in need, usually those that are lesser known and supported

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PROSPECTS: RSA

 Business confidence in South Africa is currently at a 12 year low  GDP growth prospects continue to be revised lower (2.7%) based on a weaker global economic outlook, particularly in the Eurozone  Property “fundamentals” to remain solid, however “like for like” net property income growth will come under pressure:

 Consolidated vacancies are at 4.0%; unlikely to reduce much further  Debtors arrears levels are close to record lows at 6.5% of total monthly collectables; unlikely to reduce much further  Property expense ratio at <25.0%; unlikely to reduce much further

 Access to liquidity (debt and equity) remains good, although access to conventional bank debt funding and the cost thereof will become more challenging with the implementation of Basel III  Office sector to remain the weakest with very little growth in overall demand when measured net of savings in space due to efficiencies  Early signs of positive yield spread emerging following the recent 0.5% cut in interest rates, the strong performance in the listed property sector and the Growthpoint share price in particular

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PROSPECTS: RSA (CONT’D)

 Focus on executing the Development Plan, completing existing developments and identifying new ones  REIT legislation is anticipated to be promulgated in the first quarter of 2013 and it is Growthpoint’s intention to convert into a REIT  Assuming current economic conditions continue, the growth in distribution per linked unit for the year to 30 June 2013 is expected to be in line with that achieved in the current year (this forecast has not been audited by the company’s auditors)

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PROSPECTS: GOZ

 Access to debt funding remains challenging with the four major Australian banks still hesitant to lend and being concerned about single borrower limits  The Australian Corporate Bond market and debt capital markets are relatively undeveloped compared to South Africa and currently not a viable alternative to bank funding  Yields on good quality investment property are significantly higher than the cost of debt (positive yield spread)  The economic outlook for Australia is still positive with projected GDP growth of 3.25%, inflation at below 3% and bond yields and interest rates near all time lows  Historic vacancy and arrear levels are not sustainable as the portfolio has been diversified from a few, large, single tenanted industrial buildings to include a number

• f large multi-tenanted office buildings

 Forecast distribution growth of 4% in AUD from 17.6 cents per stapled security for FY2012 to 18.3 cents per stapled security for FY2013 whilst managing the payout ratio to take into account capex requirements, portfolio metrics, prevailing financial conditions and access to finance  Estimated distributable profit for the year ending 30 June 2013 is between 19.4 cents and 19.8 cents per stapled security, suggesting a payout ratio of between 92% and 94%

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PROSPECTS: V&A WATERFRONT

 Overall development masterplan is taking shape  The perception that the V&A is “too expensive” and that major corporates “can’t afford” to be in the V&A is incorrect  V&A is “Open for Business” in respect of development, redevelopment and investment however activity is constrained by weak demand for office space and weak residential demand  Actively pursuing single occupancy office tenants and development opportunities  Whilst the Link Mall lease renewal process has been completed resulting in 3 vacancies and “better than expected” outcome on reversions, demand for good retail space remains very strong  Net distributable income from the V&A is expected to increase by circa 7

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CONTENT

 Annexure 1 – Growthpoint’s Property Portfolio  Annexure 2 – Split of RSA Property Portfolio (Excl V&A)  Annexure 3 – Acquisitions RSA (Excl V&A)  Annexure 4 – Disposals RSA (Excl V&A)  Annexure 5 – Non-Current Assets Held for Sale  Annexure 6 – Top 12 RSA Retail Properties by Value (Excl V&A)  Annexure 7 – Top 12 RSA Office Properties by Value (Excl V&A)  Annexure 8 – Top 12 RSA Industrial Properties by Value (Excl V&A)  Annexure 9 – Net Property Income Analysis RSA (Excl V&A)  Annexure 10 – GLA and Vacancy Reconciliation RSA (Excl V&A)  Annexure 11 – Lease Expiry by Sector RSA (% of GLA)  Annexure 12 – Lease Expiry by Sector RSA (% of Gross Monthly Rental)  Annexure 13 – Unitholders Holding > 1% at June 2012

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CONTENT (CONT’D)

 Annexure 14 – Linked Units Issued  Annexure 15 – Detailed Borrowings  Annexure 16 – Debt Expiry Profile RSA  Annexure 17 – Fixed Interest Rate Expiry Profile for RSA borrowings  Annexure 18 – Split of GOZ Property Portfolio  Annexure 19 - Acquisitions and Disposals – GOZ  Annexure 20 – Top 12 GOZ Properties by Value  Annexure 21 – Net Property Income Analysis GOZ  Annexure 22 - GLA and Vacancy reconciliation GOZ  Annexure 23 - Lease expiry by sector GOZ  Annexure 24 – Split of V&A Property Portfolio  Annexure 25 – GLA and Vacancy Reconciliation V&A  Annexure 26 – Lease expiry by sector V&A

50

ANNEXURE 1 - GROWTHPOINT’S PROPERTY PORTFOLIO

Retail Office Industrial RSA Total GOZ* V&A* Number of properties 47 130 226 403 41 1 GLA (m²) 975 373 1 156 944 2 219 781 4 352 098 900 676 192 086 Vacancy (m²) 30 215 66 736 75 810 172 761 2 291 3 088 Vacancy (%) 3.1% 5.8% 3.4% 4.0% 0.3% 1.6% Valuation (R’m) 13 145 14 592 7 251 34 988 13 118 4 950 Value per m² (excl bulk) 13 462 12 363 3 222 7 947 14 565 22 880 Average gross rental (per m²/month) R122 R115 R36 R76 AUD 142** R152 Forward yield 8.7% 9.3% 11.0% 9.4% 8.5% 7.2% Average in force escalations 7.7% 8.8% 8.7% 8.4% 3.2% 8.5% Weighted average lease period (years):

• By gross rental

3.2 4.4 3.0 3.7 7.2 5.0***

• Excluding Investec
• 3.3
• 3.2
• Renewal success rate

81.1% 74.6% 74.0% 75.2% 100.0% 83.7% Weighted average renewal growth 6.7% (1.5%) 4.0% 2.7% 6.1% 2.7% Weighted average future escalations on renewals 8.1% 8.6% 8.6% 8.1% 3.6% 7.6%

Note: * V&A is included reflecting Growthpoint’s 50% interest, GOZ is reflected at 100% ** Based on net rental per annum *** Various leases in the V&A were excluded in the average lease period calculation. When these leases are included the average lease period increases to 10.9 years

51

ANNEXURE 2 - SPLIT OF RSA PROPERTY PORTFOLIO (EXCL V&A)

Value GLA Value GLA

Retail Office Industrial

55% 18% 8% 13% 3% 1% 2% 22% 27% 51% 37% 42% 21%

Eastern Cape Other Greater JHB Western Cape Pretoria KwaZulu-Natal North West

50% 20% 11% 10% 4% 3% 2%

52

ANNEXURE 3 - ACQUISITIONS RSA (EXCL V&A)

Purchase Price R’ million Sector  Alberton City * 423,8 Retail  Ernst & Young ** 71,6 Office  144 Oxford Road, Rosebank 43,3 Office  Merck Longmeadow ** 10,7 Office  Other below R10,0 million 25,1

• 574,5

* Additional 64.3% acquired, Growthpoint now owns 100% ** Payment for rights to cancel bare dominium structures

53

ANNEXURE 4 - DISPOSALS RSA (EXCL V&A)

Selling price R’ million Sector Profit/ (loss) on cost Profit/ (loss) on book value Yield  Brooklyn/Design Square (7% sold), Pretoria 120,3 Retail 54,9

• 

Ruimsig Shopping Centre, Roodepoort 73,0 Retail 6,2 (0,1) 8.9%  Bronkhorstspruit Mall, Bronkhorstpruit 44,1 Retail 27,7

• 9.9%

 Otjiwarongo, Namibia 28,4 Retail 14,2 0,2 11.4%  The Gallery, Milnerton 22,5 Retail (21,8) (0,2) 11.0%  Meersig, Centurion 73,0 Office 37,1 (0,1) 9.1%  Hatfield Festival * 23,2 Office

• 

ABSA Bruma, Bruma Lake 23,0 Office 6,2 (1,9) 9.4%  The Ridge, Parktown 33,6 Office 15,2

• 10.4%

 Other Office below R20,0 million (3 properties) 38,1 Office 10,4 1,2

• 

Chamberlain, Durban 33,3 Industrial 8,3 0,1 13.3%  Metro Cash & Carry, East London 20,0 Industrial (2,1) (0,6) 7.6%  Other Industrial below R20,0 million (11 properties) 111,1 Industrial 27,3 2,1

• 643,6

183,6 0,7

* Vacant land

54

ANNEXURE 5 – NON-CURRENT ASSETS HELD FOR SALE

Properties held for sale Sector Fair value Jun 2012 R’ million  Northcliff Square Shopping Centre, Northcliff Retail 40,0  ABSA Midrand, Midrand Office 118,0  Metropark, CBD Pretoria Office 78,0  174 Visagie Street, CBD Pretoria Office 47,6  115 Paul Kruger Street, CBD Pretoria Office 36,2  ABSA Cash Centre, Westway, Westville Office 28,8  La Rocca, Bryanston Office 27,8  Itas House, Meyersdal Office 15,4  Emerson Network Power Building, Sunninghill Office 13,7  Galileo House, Bruma Office 13,6  Oakhill Building, Fourways Office 13,1  ABSA Goodwood, Goodwood Office 11,2  Montclare Residential Units, Cape Town Residential 1,3  Amalgam South, Crown Mines Industrial 43,6  Fitzmaurice, Epping * Industrial 27,0 Total 515,3

* Subdivided portion

55

ANNEXURE 6 - TOP 12 RSA RETAIL PROPERTIES BY VALUE (EXCL V&A)

Building Fair value R’ million GLA m² 1 Brooklyn/Design Square (75%), Brooklyn, Pretoria 1 538 54 181* 2 Waterfall Mall, Rustenburg 1 044 49 268 3 Lakeside Mall, Benoni 980 67 578 4 La Lucia Mall, La Lucia, Durban 874 36 343 5 Kolonnade (50%), Montana Park, Pretoria 714 36 355* 6 Alberton City, Alberton 671 49 295 7 Walmer Park Shopping Centre, Walmer Park, Port Elizabeth 664 38 317 8 The Constantia Village, Constantia, Cape Town 649 20 395 9 Northgate (50%), Randburg 639 45 286* 10 Woodmead Retail Park, Woodmead, Johannesburg 620 54 891 11 River Square Shopping Centre, Three Rivers, Vereeniging 515 38 904 12 Golden Acre, CBD Cape Town 442 33 686 Subtotal 9 350 524 499 35 Balance of the sector 3 795 450 874 47 Total for the RSA sector 13 145 975 373 * GLA reflected is the % undivided share held by Growthpoint

Value GLA

Top 12 Properties Balance of Retail Properties Top 12 Properties Balance of Retail Properties 71.1% 28.9% 53.8% 46.2%

56

ANNEXURE 7 - TOP 12 RSA OFFICE PROPERTIES BY VALUE (EXCL V&A)

Building Fair value R’ million GLA m² 1 Investec, Sandton 1 893 70 945 2 The Place, Sandton 826 33 979 3 Constantia Office Park, Roodepoort 779 71 955 4 Montclare Place, Claremont, Cape Town 483 29 446 5 Growthpoint Business Park, Midrand 429 62 966 6 36 Hans Strijdom Avenue, Cape Town 339 12 836 7 Central Park, Midrand 317 34 060 8 Hatfield Gardens, Hatfield, Pretoria 314 25 556 9 N1 City Hospital, Goodwood, Cape Town 310 14 022 10 Sunnyside Ridge Office Park, Parktown, Johannesburg 268 29 571 11 The District, Woodstock, Cape Town 234 18 413 12 Fredman Towers, Sandton 228 15 005 Subtotal 6 420 418 754 118 Balance of the sector 8 172 738 190 130 Total for the RSA sector 14 592 1 156 944

Value GLA

44.0% 56.0% 36.2% 63.8% Top 12 Properties Balance of Office Properties Top 12 Properties Balance of Office Properties

57

ANNEXURE 8 - TOP 12 RSA INDUSTRIAL PROPERTIES BY VALUE (EXCL V&A)

Building Fair value R’ million GLA m² 1 Growthpoint Industrial Estate, Meadowdale, Germiston 353 59 166 2 Hilltop Industrial Estate, Elandsfontein 173 69 571 3 Adcock Ingram, Midrand 172 21 536 4 Central Park, Elsiesriver, Cape Town 122 49 135 5 Grenville, Epping, Cape Town 120 16 220 6 Omni Park, Aeroton, Johannesburg 113 40 527 7 Pine Industrial Park, New Germany 110 39 150 8 226 Brakpan Road, Boksburg 100 40 300 9 Kulingile Building, Isando, Kempton Park 96 49 000 10 Midas Meadowdale, Germiston 93 18 981 11 Greenbushes, Port Elizabeth 92 13 539 12 Maitland Industrial Park, Maitland, Cape Town 87 27 961 Subtotal 1 631 445 086 214 Balance of the sector 5 620 1 774 696 226 Total for the RSA sector 7 251 2 219 782

Value GLA

22.5% 77.5% 20.1% 79.9% Top 12 Properties Balance of Industrial Properties Top 12 Properties Balance of Industrial Properties

58

ANNEXURE 9 – NET PROPERTY INCOME ANALYSIS RSA (EXCL V&A)

Jun 2012 R’ million Jun 2011 R’ million Increase Net property income 3 099 2 855 8.5% Adjustments:  Acquisitions & Developments (234) (78)  Disposals (22) (145)  Investec rent (227) (205) Adjusted “like for like” net property income 2 616 2 427 7.8%  Retail 919 857 7.2%  Office 1 028 948 8.4%  Industrial 669 622 7.6% Total 2 616 2 427 7.8%

59

ANNEXURE 10 – GLA AND VACANCY RECONCILIATION RSA (EXCL V&A)

Total GLA (m²) Vacant area (m²) Vacancy Balance at 1 Jul 2011 4 390 073 220 003 5.0% GLA adjustments (6 380) 4 107 Disposals (126 258) (22 133) Acquisitions 32 175 864 Developments and extensions 62 488

• Leases expired in the period *

901 815 Renewals of expired leases ** (678 195) New letting of vacant space (362 949) Leases terminated 109 249 Balance at 30 Jun 2012 4 352 098 172 761 4.0%

* 20.5% of opening balance GLA expired during the year under review ** Retention % of 75.2% compared to 65.8% for the year to Jun 2011

60

ANNEXURE 11 – LEASE EXPIRY BY SECTOR RSA (% OF GLA)

RETAIL OFFICE INDUSTRIAL

%

19.2 7.5 11.8 17.7 21.7 16.1 2.9 3.1 17.1 10.1 9.9 17.6 19.6 16.1 3.8 5.8 8.6 12 12.9 15.7 24.6 21.2 1.6 3.4 TOTAL 13.2 TOTAL 10.5 TOTAL 11.8 TOTAL 16.7 TOTAL 22.6 TOTAL 18.7 TOTAL 2.5 TOTAL 4.0

2017-beyond By June-17 By June-16 By June-15 By June-14 By June-13 Monthly Vacant

61

ANNEXURE 12 – LEASE EXPIRY BY SECTOR RSA (% OF GROSS MONTHLY RENTAL)

%

RETAIL OFFICE INDUSTRIAL

12.9 7.2 12.1 18.6 23.4 19.5 3.3 3.0 26.5 8.3 9.2 14.6 17.6 15.4 3.8 4.6 9.9 8.9 11.3 16.9 24.7 23.1 1.9 3.3 TOTAL 17.5 TOTAL 8.0 TOTAL 10.8 TOTAL 16.6 TOTAL 21.4 TOTAL 18.8 TOTAL 3.2 TOTAL 3.7

2017-beyond By June-17 By June-16 By June-15 By June-14 By June-13 Monthly Vacant

62

ANNEXURE 13 – UNITHOLDERS HOLDING >1% AT JUNE 2012

Name Units held Holding Public Investment Corporation 418 064 821 24.0% BEE Consortia 122 000 000 7.0% Stanlib 104 471 356 6.0% Old Mutual Group 77 717 711 4.5% Investec 64 324 683 3.7% Eskom Pension & Provident Fund 52 172 282 3.0% Investment Solutions 46 249 747 2.7% Vanguard 43 857 190 2.5% Prudential 30 942 900 1.8% Momentum 30 646 140 1.8% Sanlam Group 29 523 361 1.7% Liberty Group 27 851 232 1.6% Transnet Retirement Funds 25 432 109 1.5% Coronation Fund Managers 18 177 440 1.0% Total unitholders holding >1% 1 091 430 972 62.8% Other 651 649 946 37.2% Total 1 743 080 918 100.0% Foreign unitholding 15.3%

63

ANNEXURE 14 – LINKED UNITS ISSUED

Linked units Opening balance 1 Jul 2011 1 591 971 441  Equity raising (Jul 2011) 100 000 000  Distribution reinvestment (Sep 2011) 9 395 001  Distribution reinvestment (Mar 2012) 41 714 476 Closing balance 30 Jun 2012 1 743 080 918

64

ANNEXURE 15 – DETAILED BORROWINGS

RSA Refinance Date Jun 2012 R’ million Jun 2011 R’ million Commercial paper – 3 months (R400m x 2) Jul/Aug 2012 800 ABSA Nov 2012 695 Nedbank Sep 2013 2 000 Standard Bank/Sanlam Dec 2013 1 000 Standard Bank Feb 2014 800 China Construction Bank Aug 2014 250 Corporate Bond – GRT 01 Dec 2014 500 Corporate Bond – GRT 05 Jan 2015 750 ABSA – Paramount Feb 2015 740 RMB Jun 2015 500 Corporate Bond – GRT 03 Oct 2015 500 Corporate Bond – GRT 02 May 2016 500 Corporate Bond – GRT 04 Sep 2016 260 RMB Jun 2017 1 000 RMB Feb 2018 675 RMB – Paramount Apr 2018 740 OMSFIN May 2021 1 200 Investec Buildings loan Feb 2024 703 Total 13 613 14 249 Weighted average interest rate 9.5% % of debt at fixed interest rate 83.1% GOZ * Westpac, NAB, ANZ (weighted average interest rate of 7.3%) 6 118 Total 6 118 4 844

* Includes a cumulative foreign exchange difference of R1,1 billion (30 Jun 2011: R379,0 million)

65

ANNEXURE 16 – DEBT EXPIRY PROFILE RSA

Debt expiry at 30 June 2012 per 12 month period

11% 28% 20% 7% 9% 11% 0% 0% 9% 0% 0% 5% 0% 5% 10% 15% 20% 25% 30% 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24

%

Fixed interest rate expiry at 30 June 2012 per 12 month period

66

ANNEXURE 17 – FIXED INTEREST RATE EXPIRY PROFILE FOR RSA BORROWINGS

R’m

2,299 1,000 318 905 952 2,212 1,915 650 500 2,159

• 703
• 500

1,000 1,500 2,000 2,500 Floating 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24

67

ANNEXURE 18 - SPLIT OF GOZ PROPERTY PORTFOLIO

GLA Net property income

Industrial Office

Value Value

84% 16% 40% 30% 9% 8% 7% 4% 2% Western Australia Tasmania Queensland Victoria South Australia New South Wales ACT 53% 47% Industrial Office 35% 65%

68

ANNEXURE 19 - ACQUISITIONS AND DISPOSALS - GOZ

Acquisitions Sector R’ million AUD’ million Yield 333 Ann Street, Brisbane, QLD Office 960,7 116,1 9.1% CB 1, South Brisbane, QLD Office 560,9 67,8 8.9% CB 2, South Brisbane, QLD Office 284,5 34,4 7.8% 219 – 247 Pacific Highway, NSW* Office 3,3 0,4 8.1% 10 - 12 Mort Street, Canberra, ACT Office 466,2 55,8 9.6% Botanicca Carpark, Richmond, VIC** Carpark 7,8 1,0

• 2 283,4

275,5

• Note:

* Only land value of development project acquired ** Consolidated into a current property

Disposals Sector R’ million AUD’ million Yield 1304 Ferntree Gully Road, Scoresby, VIC Industrial 42,8 5,2 7.2% 42,8 5,2

33 Anne Street, Brisbane, QLD CB1 & CB2, SW1 South Brisbane 219-247 Pacific Highway Artarmon 10-12 Mort Street, Canberra

69 Building Sector Fair value R’ million GLA m² 1 70 Distribution Street, Larapinta, QLD Industrial 1 328 75 425 2 333 Ann Street, Brisbane, QLD Office 972 16 476 3 2 Horrie Miller Drive, Perth Airport, WA Industrial 927 80 374 4 572-576 Swan Street, Richmond, VIC Office 626 14 660 5 134 Lillkar Road, Goulburn, NSW Industrial 593 42 826

6 28 Bilston Drive, Wodonga, VIC Industrial 589 57 440 7 CB1, 100 Melbourne Street, South Brisbane, QLD Office 568 11 561 8 52 Merivale Street, South Brisbane, QLD Office 543 9 453 9 120 Northcorp Boulevard, Broadmeadows, VIC Industrial 535 58 320 10 32 Cordelia Street, South Brisbane, QLD Office 535 10 125 11 599 Main North Road, Gepps Cross, SA Industrial 476 67 238 12 42 10-12 Mort Street, Canberra, ACT Office 466 15 398 Subtotal 8 158 459 296 29 Balance of the sector 4 960 441 380 41 Total for the GOZ sector 13 118 900 676

Value GLA

ANNEXURE 20 – TOP 12 GOZ PROPERTIES BY VALUE

62.2% 37.8% 49.0% 51.0% Top 12 Properties Balance of GOZ Properties Top 12 Properties Balance of GOZ Properties

70

Jun 2012 AUD’000 Jun 2011 AUD’000 Increase Net property income 108 942 79 202 37.5% Adjustments: Unallocated once off adjustments

• (399)

Acquisitions (43 838) (13 127) Disposals (294) (2 561) Adjusted “like for like” net property income 64 810 63 115 2.7% Office

• Industrial

64 810 63 115 2.7% Total 64 810 63 115 2.7%

ANNEXURE 21 – NET PROPERTY INCOME ANALYSIS GOZ

70 Distribution Street, Larapinta, QLD

71

Total GLA (m²) Vacant (m²) Vacancy Balance at 1 July 2011 843 964 29 0.0% GLA adjustments 164

• Disposals

(7 621)

• Acquisitions, developments and extensions

64 169 1 395 Leases expired in the period

• Renewals of expired leases
• New letting of vacant space
• Leases terminated
• 867

Balance at 30 June 2012 900 676 2 291 0.3%

ANNEXURE 22 – GLA AND VACANCY RECONCILIATION GOZ

572-576 Swan St, Richmond, VIC 33-39 Richmond Road, Keswick, SA

72

ANNEXURE 23 – LEASE EXPIRY BY SECTOR GOZ

% of GLA % of gross monthly rental

Office Industrial

2 12 8 9 13 56 1 5 5 8 81

10 20 30 40 50 60 70 80 90 100

2 11 12 10 12 53 4 1 4 5 86

10 20 30 40 50 60 70 80 90 100

73

ANNEXURE 24 - SPLIT OF V&A PROPERTY PORTFOLIO

Property portfolio by value Property portfolio by GLA

87% 13% 54% 20% 14% 12%

Developed vs undeveloped by value Net property income

55% 16% 7% 9% 13% 23% 23% 32% 22% Developed Undeveloped Bulk Retail Office Fishing & Industrial Hotel Bulk Retail Office Fishing & Industrial Hotel

74

ANNEXURE 25 – GLA AND VACANCY RECONCILIATION V&A

50% of GLA (m²) Vacant (m²) Vacancy Balance at 1 Jul 2011 191 918 6 732 3.5% GLA adjustments

• (1 130)

Disposals

• Developments and extensions

168

• Leases expired in the period *
• 11 673

Renewals of expired leases **

• (9 770)

New letting of vacant space

• (5 042)

Leases terminated

• 625

Balance at 30 Jun 2012 192 086 2 924 1.6%

* 3.7% of opening balance GLA expired during the year under review ** Retention of 83.7% for the year to Jun 2012

75

ANNEXURE 26 – LEASE EXPIRY BY SECTOR V&A

% of GLA % of gross monthly rental

Office Retail Fishing & Industrial Hotel

2 21 4 7 12 13 41 5 16 12 16 8 19 24 14 5 10 71 14 1 85

10 20 30 40 50 60 70 80 90 100

11 2 3 2 7 75 20 15 16 13 17 19 34 18 1 17 30 1 99

10 20 30 40 50 60 70 80 90 100