ANNUAL RESULTS PRESENTATION FOR THE YEAR ENDED 30 JUNE 2018 AGENDA - - PowerPoint PPT Presentation

ANNUAL RESULTS PRESENTATION

FOR THE YEAR ENDED 30 JUNE 2018

2

AGENDA

01

Strategy In Action Financial Results Capital Management Portfolio Update Property Investment & Development Conclusion Annexures

South Africa V&A Waterfront GOZ GWI & GPRE 03 04 05 06 07 08 02

Group Highlights

STRATEGY IN ACTION

4

STRATEGY IN ACTION

Further progress implementing strategic initiatives, including Internationalisation, Funds Management and, Trading and Development Internationalisation

▪ 29.0% ownership of Globalworth (GWI) ▪ Expansion into Poland:

• GWI 68.4% acquisition of Globalworth Poland

(GPRE)

• GRT 21.6% acquisition of GPRE

▪ 65.5% ownership of Growthpoint Australia (GOZ)

EBIT 20.5%

• ffshore

BOOK VALUE OF PROPERTY ASSETS

27.7%

• ffshore

Strategy In Action Group Highlights Financial Results Capital Management

Portfolio Update Property Investment & Development Conclusion Annexures

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Optimising and streamlining RSA portfolio

▪ Advanced stages of negotiation for a portfolio disposal of 58 properties across all three sectors for c. R5.8bn to a BEE consortium ▪ 30 individual assets sales, either transferred or in the process thereof, c. R4bn

Introducing new revenue streams

Trading & development ▪ Strong development pipeline of assets for third parties as well as trading profits to be realised through the sale of properties, earmarked as trading opportunities, expected to flow in FY19 ▪ Limited to 5% of the South African portfolio by value and expected to contribute no more than 1% - than 2% of distributable income Funds Management ▪ Successful first close for both the Growthpoint Investec Africa Properties (GIAP) Fund and the Growthpoint Healthcare Properties Holdings Fund of USD212m and R285m respectively ▪ Accretive acquisition and development pipeline for both GIAP and Healthcare ▪ Both funds expected to be separately listed when they reach critical mass ▪ Growthpoint to earn fees of c. 2% of NAV for its 50% ownership of the GIAP manco and

• c. 1.25% of NAV from the Healthcare Fund

▪ Capital light strategy, earn fees on 100% of the assets but ultimately will only invest c. 20% directly ▪ Growthpoint seeks to ultimately build a R15bn funds management business with multiple funds on our funds management platform

STRATEGY IN ACTION (CONT.)

To be a

leading international

property company providing space to thrive

Strategy In Action Group Highlights Financial Results Capital Management

Portfolio Update Property Investment & Development Conclusion Annexures

GROUP HIGHLIGHTS

7

6.5% distribution per share (DPS) growth

▪ Total FY18 dividend 208.6 cents per share

R6.1bn distributable income

▪ Distributable income exceeds the R6bn mark ▪ 10.1% distributable income growth

R132.9bn group property assets

▪ 8.7% from FY17

35.2% Group LTV

▪ Gearing remains well below 40% ▪ Increased from 35.0% at FY17

3.7x interest cover

▪ Increased from 3.5x at FY17

GROUP HIGHLIGHTS

Strategy In Action Group Highlights Financial Results Capital Management

Portfolio Update Property Investment & Development Conclusion Annexures

FINANCIAL RESULTS

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CONSOLIDATED DISTRIBUTION CALCULATION

1. Includes R12m (FY17: R45m) interest on V&A Waterfront development funding. 2. Includes R33m (FY17: R45m) antecedent dividends and R19m (FY17:R0m) income from Stenham.

FY18 Rm FY17 Rm INCREASE/ (DECREASE)

Gross property income 10 976 10 716 2.4% RSA 8 443 8 079 4.5% GOZ(3) 2 533 2 637 (3.9%) Property expenses (2 366) (2 245) 5.4% RSA (2 007) (1 901) 5.6% GOZ(3) (359) (344) 4.4% Net property income 8 610 8 471 1.6% Other operating expenses (437) (416) 5.0% RSA (309) (289) 6.9% GOZ(3) (128) (127) 0.8% Net property income after operating expenses 8 173 8 055 1.5% Finance costs (2 574) (2 510) 2.5% RSA (2 027) (1 944) 4.3% GOZ(3) (547) (566) (3.4%) Finance income and other investment income 1 158 737 57.1% Investment income from V&A Waterfront(1) 592 524 13.0% Investment income from GWI 291 78 273.1% Investment income from GPRE 95

• 100.0%

Underwriting fee GPRE capital raise 35

• 100.0%

Other finance income(2) 145 135 7.4% Adjustment for NCI, foreign exchange profit /(loss) and normal taxation (649) (734) (11.6%) Distributable income 6 108 5 548 10.1% Dividend for the period 6 108 5 548 10.1%

Strategy In Action Group Highlights Financial Results Capital Management

Portfolio Update Property Investment & Development Conclusion Annexures

3. Average exchange rate at R9.97/AUD (FY17: R10.26/AUD) for GOZ.

10

▪ DPS growth boosted by offshore investment activities:

• Underwriting of EUR450m GPRE capital raise in June 2018
• Incremental investment into GPRE and GWI and the timing thereof

GROWTH IN DPS

FY18 DPS Growth

RSA 2.8% V&A 0.8% GOZ (0.2%) GWI Investment 2.5% GPRE Investment 1.1% GPRE Underwriting fee 0.4% Other income 0.1% Group Finance costs (1.0%) FY18 DPS Growth 6.5%

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CONSOLIDATED BALANCE SHEET (EXTRACTS)

1. Includes R3 180m (FY17: R1 241m) of properties classified as held for sale. 2. Closing exchange rate R10.16/AUD (FY17: R10.04/AUD). 3. Excludes fair value adjustments.

FY18 Rm FY17 Rm INCREASE/ (DECREASE) Property portfolio(1) 112 227 109 442 2.5% RSA 78 634 76 906 2.2% GOZ(2) 33 593 32 536 3.2% Equity Investments 15 096 9 920 52.2% 50.0% Investment in V&A Waterfront 7 549 7 110 6.2% 29.0% Investment in Globalworth (FY17: 26.9%) 5 057 2 769 82.6% 21.6% Investment in GPRE 2 422

• 100.0%

Other property-related investments (Ferguson Place, Storage, Open, Africa Fund) 68 41 100.0% Listed Investments(5) 801 226 254.4% Nominal borrowings(3) 47 385 42 364 11.9% RSA(4) 35 152 29 288 20.0% GOZ(2) 12 233 13 076 (6.4%) Shareholders interest (NAV) 75 273 72 045 4.5%

4. The total value for FY18 excludes the deferred payment of R0 (FY7: R85m) on the Samrand land purchased. 5. Stenham R4m (FY17: 226), IDR R797m (FY17:0)

Strategy In Action Group Highlights Financial Results Capital Management

Portfolio Update Property Investment & Development Conclusion Annexures

CAPITAL MANAGEMENT

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Total debt R35.2bn

▪ Debut Eurobond issue for USD425m, converted to EUR350m at a weighted average cost of 3.0% ▪ Inaugural Green Bond issue for R1.1bn for 5, 7 and 10 years at spreads of 139 to 200 basis ▪ Unsecured debt increased by R6.6bn

Investment activities funded from

▪ R2.2bn equity DRIP proceeds ▪ R5.8bn net new borrowings ▪ R1.5bn property disposals

Credit rating

▪ Moody's Global Scale Rating is Baa3 and National Scale Rating is AAA.za with a stable outlook

FY19 Dividend hedge table

RSA CAPITAL MANAGEMENT

Currency % of dividends to be used for servicing FX interest % dividends hedged to ZAR via FECs Weighted average FX rate on FECs GOZ AUD 23% 29% 10.56 GWI & GPRE EUR 49% 43% 17.28 % debt and CCIRS Interest Cover Investment into GOZ AUD800m (AUD/ZAR CCIRS) 50% of market value and 84% of cost 4.3 Investment into GWI and GPRE EUR100m direct EUR loans EUR86m (EUR/ZAR CCIRS) EUR264m (EUR/USD CCIRS) 93% of market value and 100% of cost 2.0

CCIRS & foreign denominated debt

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RSA facilities FY18 FY17

Unutilised committed facilities (Rbn) 5.8 4.5 Weighted average term of liabilities (years) 3.7 3.0 Weighted average term of fixed interest rate profile (years) (Incl. AUD & EUR CCIRS and IRS) 4.3 3.9 Weighted average interest rate (%) 9.1 9.2 Weighted average interest rate (%) (Incl. AUD & EUR CCIRS and EUR debt) 6.9 7.4 % debt at fixed interest rate 81.5 85.6 Unencumbered assets (incl. equity accounted and listed investments) (Rbn) 51.2 44.2 Unsecured debt (Rbn) 19.1 12.5

RSA CAPITAL MANAGEMENT (CONT.)

In order to diversify our investor pool and tap larger and more liquid markets, a strategic decision was taken to tap the international debt capital markets in support of our offshore growth, albeit at higher rates than where we can fund domestically.

Strategy In Action Group Highlights Financial Results Capital Management

Portfolio Update Property Investment & Development Conclusion Annexures

PORTFOLIO UPDATE

SOUTH AFRICA

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Completion of Discovery

▪ Delivered on time and on budget with Discovery now

• ccupying 116 241m²

3.6x interest cover

▪ Increased from 3.4x FY17

35.4% RSA LTV

▪ Gearing remains well below 40% ▪ Increased from 33.4% at FY17 on the back of the Eurobond issue and a marginal decrease in the RSA portfolio valuations

27.5% total expense to income ratio

▪ Expenses under control albeit they have ticked up from FY17 ▪ Property expense ratio 23.8% vs. 23.5% FY17 ▪ Operating expense ratio 3.7% vs. 3.6% FY17

RSA HIGHLIGHTS

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▪ The domestic economy is the overarching influence across all three sectors ▪ Property fundamentals are weak ▪ GDP growth is needed to stimulate all three sectors ▪ Client retention is under pressure with negative renewal growth rates across all three sectors for the first time resulting in low to negative fair value adjustments ▪ The lack of business confidence is resulting in the shortening of our lease terms ▪ The market remains fiercely competitive and it is costly to attract and retain tenants ▪ Supply exceeds demand across all three sectors ▪ Arrears remain well managed at R68.5m vs. R60.4m at FY17, with a R17.3m write off to the income statement vs. R13.2m at FY17 ▪ Vacancies have increased from 4.4% at FY17 to 5.4% ▪ Over a million square metres of space was let over the period ▪ Average in force escalations of 7.4% and we are still managing to get 7.8% average future escalations on renewals

SOUTH AFRICA – MACRO ECONOMIC ENVIRONMENT

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▪ It has not been an easy year for the retail sector. The consumer is more constrained with the VAT and tax increases, soaring fuel prices and administered costs and slow income

• growth. Many retailers have showed low or negative like-for-like store sales growth and

rental escalations have outpaced trading density growth over the past couple of years. ▪ We are encouraged that the pace of new developments has slowed but we are still absorbing the impact of retailer cannibalisation across many of our centres which has resulted in the negative renewal growth rate numbers which in turn has had a negative effect on valuations for the sector ▪ Development focus for the sector is on creating and unlocking the potential within our key portfolio assets; as such we are upgrading and investing in our shopping centres to keep them modern, relevant and appealing

SOUTH AFRICA - RETAIL

Vacancy 3.6% Core vacancy 2.2% Average trading density growth 1.3% Renewal success rate 81.8% Renewal growth rate (3.1%) Arrears as a % of collectables 8.8%

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▪ Supply generally continues to exceed demand with tenant consolidation remaining a key theme ▪ Demand remains for new P grade green buildings which is also our development focus ▪ Tenants are spoilt for choice and higher incentives and lower rental levels are necessary to attract and retain tenants ▪ 86 Office buildings valued at R18bn have received green star ratings by the Green Building Council of South Africa (GBCSA) ▪ The asset management strategy for FY18 focussed on disposing of non-core properties ▪ Developments are focussed on high growth nodes with good access and no acquisitions were made in the period

SOUTH AFRICA - OFFICE

Vacancy 8.6% Renewal success rate 54.5% Renewal growth rate (2.2%) Arrears as a % of collectables 4.0%

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▪ Responding to the pressures of increased competition and pedestrian economic growth, tenant consolidation aimed at improving efficiencies and economies of scale has become the order of the day for the industrial portfolio which is putting pressure on all KPIs ▪ Our asset management strategy focussed on boosting exposure to modern logistics and warehousing facilities and reducing exposure to manufacturing type facilities. As such we disposed of several non-core properties whilst acquisitions were strategic in nature ▪ 11 new strategically located development projects were started this year and 6 were completed that together added more than 40 000m² to the portfolio

SOUTH AFRICA - INDUSTRIAL

Vacancy 4.0% Renewal success rate 68.4% Renewal growth rate (3.3%) Arrears as a % of collectables 8.7%

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Sustainability focus across all 3 sectors

▪ 10.9 GWh of solar power produced in FY18 with total capacity currently at c. 8 MWp ▪ Via our innovative Green Leases we have shared more than R60m in utilities cost savings, 50/50 with our clients since August 2013 ▪ The Greenovate Awards which introduce university students to green building thinking and recognise excellence in application, is in its 4th year ▪ We are in the process of submitting our carbon emission Scientific Based Targets to the Scientific Based Targets Initiative ▪ We have a target of zero waste to landfill by 2022 ▪ R34m spent on alternative water solutions in the Western Cape

SOUTH AFRICA - SUSTAINABILITY

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FY18 Rm FY17 Rm INCREASE/ (DECREASE)

Gross property revenue 8 443 8 079 4.5% Retail 3 244 3 099 4.7% Office 3 779 3 632 4.0% Industrial 1 420 1 348 5.3% Property expenses (2 007) (1 901) 5.6% Retail (834) (792) 5.3% Office (848) (819) 3.5% Industrial (325) (290) 12.1% Net property income 6 436 6 178 4.2% Adjustments (1 133) (1 091) Acquisitions and developments (571) (346) Disposals (102) (313) Investec rent (273) (264) Healthcare (187) (168) Adjusted “like-for-like” net property income 5 303 5 087 4.2% Retail 1 988 1 908 4.2% Office 2 322 2 221 4.5% Industrial 993 958 3.7%

NET PROPERTY INCOME ANALYSIS

Strategy In Action Group Highlights Financial Results Capital Management

Portfolio Update Property Investment & Development Conclusion Annexures

PORTFOLIO UPDATE

V&A WATERFRONT

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13.8% Net property income growth New office and hotel accommodation ▪ Coming on stream and delivering returns Completion of Silo District ▪ Completed in September 2017 with the Zeitz MOCAA, Radisson Red, PWC, Werksmans, residential apartments (100% sold) and Silo Boutique Hotel ▪ Received six of the 2018 SAPOA awards Strong performance from hotels ▪ Occupancies 15% - 20% higher than the rest of the Western Cape Marine and Industrial performing well ▪ Increase in number of vessels to the marina as a whole

V&A WATERFRONT HIGHLIGHTS

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Property fundamentals ▪ Strong demand for office space from blue-chip corporates ▪ Vacancies across sectors remain low at 1.8% ▪ Tenants electing to stay at the V&A – with tenant retention at 92.4% ▪ Footfall flat for Victoria Wharf Shopping Centre with increased footfall trends being experienced in the broader precinct, particularly around Silo District and the Watershed ▪ Retail sales growth of 1.1% and trading density growth negative 0.8%, both coming off a high base ▪ Tourist spend and hotel occupancies since April, both impacted by “Day Zero” ▪ Development activity slowed for now and focussed on the Canal District as well as activating the connection between the district and the city

V&A WATERFRONT (CONT.)

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Sustainability ▪ Cape Town’s response to the water crisis, was a major consideration this year ▪ The V&A has successfully reduced water consumption by 52% since 2010 ▪ The V&A provided land space for the City of Cape Town to implement it’s 2 mega litre (ML) temporary desalination plant to attend to immediate needs in Cape Town ▪ The V&A also commissioned a R200m, 5 ML desalination plant which will take the precinct off the water grid ▪ A healthy constellation of Green Star SA certified buildings; all with at least four stars, and most settling at five or six ▪ 24% of total energy consumption saved since 2008 ▪ Solar panels generated 2.05 GWh energy in 2018, up 12% on prior period ▪ Over 1 800 tons of waste collected in FY18 was diverted from landfill

V&A WATERFRONT SUSTAINABILITY

Strategy In Action Group Highlights Financial Results Capital Management

Portfolio Update Property Investment & Development Conclusion Annexures

PORTFOLIO UPDATE

GOZ

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GOZ HIGHLIGHTS

3.3% DPS growth

▪ Total FY18 dividend AUD0.222 per share

22.3% total shareholder return for FY18

▪ GOZ outperforms the ASX300 index over one, three and five years

10.8% increase in NTA

▪ 6.2% like for like valuation uplift ▪ 28bps cap rate compression

33.9% Gearing(1)

▪ Gearing reduced 460bps through disposals and valuation uplift ▪ Gearing remains below bottom of the target range of 35% to 45% ▪ Good balance sheet capacity

Increase in NABERS energy rating to 4.6 stars

Strategy In Action Group Highlights Financial Results Capital Management

Portfolio Update Property Investment & Development Conclusion Annexures

1. LTV 36.2%.

29

GOZ FY18 REVIEW

▪ Domestic economic conditions remain favourable for commercial property ▪ Acquisitions totalling AUD48.6m and disposals of AUD169.4m ▪ Preference for modern office assets in fringe locations, leased to government or listed corporates with medium term lease expiries ▪ FY18 was a year of consolidation and paving the way for further investment

• pportunities

▪ De-risking of portfolio through asset disposals at premium to book values and recycling of capital into higher yielding investments ▪ After extensive due diligence on the Perth market an office and an industrial property was acquired ▪ First speculative 19 300m² internal office development underway at Botannica in Richmond, Melbourne ▪ Accretive acquisitions throughout FY18 improved distribution growth from

• riginal guidance of 2.3% to 3.3% at year end

▪ Growthpoint’s distributions received from GOZ were negatively impacted by the AUD/ZAR exchange rate and the increased dividend withholding tax

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Portfolio Update ▪ 66% office and 34% industrial; higher growth in income for office relative to industrial ▪ 87% located on Australia’s Eastern Seaboard ▪ High quality tenants - 56% listed companies and 24% government ▪ Manageable near term expiries at 1% for FY19 ▪ 2% vacancy rate ▪ 3.3% weighted average in force escalations ▪ 5.3 year WALE ▪ Good leasing success with 13% of the portfolio by GLA and 8% by rental income let in FY18, through early action of upcoming lease expiries and securing of stronger tenants Capital Management ▪ 82% of debt fixed vs. 75% at FY17 with a weighted average fixed debt maturity of 5.5 years ▪ All in cost of debt slightly higher at 4.4% vs. 4.3% at FY17 ▪ AUD320m debt headroom

GOZ PORTFOLIO UPDATE & CAPITAL MANAGEMENT

Strategy In Action Group Highlights Financial Results Capital Management

Portfolio Update Property Investment & Development Conclusion Annexures

PORTFOLIO UPDATE

GWI & GPRE

32

TRANSACTION HISTORY

Growthpoint continues to expand its exposure to Eastern Europe through the Globalworth platform

Growthpoint acquires 26.8% of GWI for EUR186.4m Growthpoint increases its stake in GWI to 29.0% by investing an additional EUR113.8m GWI expands into Poland, through a 71.7% acquisition of Warsaw listed Griffin Premium RE.. N.V. which is subsequently rebranded to Globalworth Poland Real Estate NV (GPRE) GPRE successfully raises EUR450m, GWI Invests EUR300m and Growthpoint invests EUR150m directly and acquires 21.6% of GPRE

• directly. GWI ownership in GPRE

diluted to 68.4%. December 2016 December 2017 December 2017 June 2018

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▪ Strong and similar property fundamentals, with strong economic growth, driving both markets ▪ New market entrants, business process outsourcing, shared service centers and organic growth of IT companies driving office demand ▪ Availability of skills at lower labour costs ▪ Accretive development and acquisition opportunities at yields of 7% to 9% + ▪ 5.7 year WALE as of 31 December 2017 ▪ Low vacancies ▪ Net absorption ▪ Robust leasing activity to global blue-chip tenants

PROPERTY FUNDAMENTALS – POLAND AND ROMANIA

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▪ Tower 1 and Tower 2 of Globalworth Campus delivered, with tenants including Amazon, Honeywell, Mindspace and Stefanini. Construction has commenced on Tower 3. Upon completion Globalworth Campus will comprise of three main office towers offering 92 000m² GLA ▪ Acquired 2 land plots for EUR15.5m located in the Gara Herastrau/Barbu Vacarescu corridor of Bucharest’s new Northern CBD. Adjacent to existing assets, Globalworth Plaza and the Green Court Complex. Allowing for the development of c. 40 000m² of commercial property which is predominantly office space ▪ Additional land acquisition next to Renault Bucharest Connected which is a 42 300 m² development currently under construction with expected delivery Q1 2019 and leased to Groupe Renault Romania for 11 years ▪ Established a collaboration with Mindspace, the leading global operator of high-end, inspiring coworking space. Globalworth has made an equity investment into the company of USD10m to support its growth. Mindspace is entering Romania with three new locations in Bucharest in addition to its existing location in Warsaw – all within the GWI and GPRE portfolios

PORTFOLIO ACTIVITY - ROMANIA

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▪ EUR101m acquisition of Spektrum Tower in July 2018, in the heart of Warsaw, 29 500m² GLA, c. 93% occupancy, 5 year WALE, 6.2% acquisition yield, over 60 tenants ▪ EUR139m acquisition of Quattro Business Park in Krakow, 60 200m² GLA,

• c. 99% occupancy, 3 year WALE, 7.7% acquisition yield, top tenants include

Capgemini, Google and Luxoft ▪ EUR35.8m acquisition of West Link in Wroclaw, 14 400m² GLA, 100%

• ccupancy, 6 year WALE, 7.0% acquisition yield. Main tenant is Nokia

Solutions & Network. West Link is adjacent to their 16 600m² West Gate property ▪ EUR55m acquisition of Warta Tower in Warsaw, 28 000m² GLA, 92%

• ccupancy, 3.5 year WALE, 10.7% acquisition yield. Main tenant is

TUiR Warta S.A.

PORTFOLIO ACTIVITY - POLAND

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▪ Good access to funding to fund accretive acquisition and development pipeline: − GWI ▪ December 2016 - EUR200m equity raise ▪ June 2017 - EUR550m debut 5 year Eurobond issue at 2.875% ▪ December 2017 - EUR340m equity raise ▪ March 2018 - EUR550m 7 year Eurobond issue at 3.00% ▪ Investment Grade rating from Fitch at BBB- and Moody’s upgraded GWI’s rating to Ba1 from Ba2 − GPRE ▪ June 2018 - EUR450m equity raise

CAPITAL MARKETS ACTIVITY

Strategy In Action Group Highlights Financial Results Capital Management

Portfolio Update Property Investment & Development Conclusion Annexures

PROPERTY INVESTMENT & DEVELOPMENT

38

PROPERTY INVESTMENT & DEVELOPMENT

Acquisitions

South Africa R1.3bn V&A Waterfront (50%)

• GOZ

R518m

Border colour and move commitments below

Disposals

South Africa R1.5bn V&A Waterfront (50%) R222m GOZ R1.7bn

Development and capex

South Africa R2.1bn V&A Waterfront (50%) R296m GOZ R102m

Commitments

South Africa R1.6bn V&A Waterfront (50%) R110m GOZ R2.1bn

Strategy In Action Group Highlights Financial Results Capital Management

Portfolio Update Property Investment & Development Conclusion Annexures

CONCLUSION

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▪ Depressed property fundamentals ▪ Economic growth prospects insufficient to repair lacklustre property fundamentals ▪ Rental reversions are likely to remain under pressure on the back

• f sluggish economic growth

▪ Increased cost of retaining tenants and attracting new ones ▪ Further streamlining of the portfolio on the successful conclusion

• f the portfolio sale

▪ Focus on optimisation given the weak property fundamentals and negative yield spread environment ▪ Additional R400m capital raise for the Healthcare Fund is imminent together with accretive acquisition opportunities and developments ▪ Many exciting opportunities for the deployment of cash in the Growthpoint Investec Africa Property Fund ▪ Expect trading profits and development fees from 3rd parties to flow in FY19 ▪ We expect good growth in earnings from the V&A Waterfront in FY19 ▪ The impact of Day Zero on tourism numbers on hotel occupancies and retail spend are being felt ▪ While the property fundamentals for retail and hotels are unchanged, it is uncertain when these numbers will recover ▪ Hotel occupancies this winter are 15% down, which has had a knock on effect on retail spend ▪ c. 120 000m² bulk remaining with a good development pipeline and exploring ways to acquire additional bulk ▪ We will continue to unlock value at the V&A Waterfront through the roll-out of development and by enhancing its

• rganic growth potential

SOUTH AFRICA V&A WATERFRONT

PROSPECTS

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▪ Good balance sheet capacity to take advantage of opportunities ▪ Continue to evaluate opportunities to sell assets at premium to book values with underlying residential conversion upside ▪ Continue to explore direct and listed property opportunities ▪ Considering internal development and expansion opportunities ▪ Dividend withholding tax expected to remain at high levels ▪ FY19 distribution guidance of AUD0.23 representing 3.6% distribution growth. ▪ Recent ZAR weakness will be beneficial to Growthpoint should it persist ▪ Romania GDP projected to be 5.2% for 2018 which is double the average Eurozone growth for 2017 ▪ Poland’s GDP expected to be around 4.2% for 2018 ▪ Romania and Poland are both prime destinations for business process outsourcing and shared service centres, as such strong demand from global corporates for office space continues ▪ Dynamic highly skilled labour force, proficient in languages with competitive wages and beneficiaries of EU grants ▪ Poland will be the largest beneficiary of EU funding for the region ▪ Romanian cap rates higher than other prime markets in CEE but expect further cap rate compression as the property market continues to evolve ▪ Solid pipeline of opportunities in Poland and Romania for both

• ffice and industrial asset acquisitions / developments

▪ CEE investment continues to surpass Growthpoint’s due diligence expectations and deliver on distribution guidance

GOZ GWI & GPRE

PROSPECTS (CONT.)

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PROSPECTS (CONT.)

Strategy In Action Group Highlights Financial Results Capital Management

Portfolio Update Property Investment & Development Conclusion Annexures

DIVIDEND GUIDANCE

Dividend growth for FY19 should be approximately

4.5%

Thank You

ANNEXURES

45

ANNEXURE CONTENTS

02 03 04 05 06 07 08 01

Company highlights Growth in dividend per share Growth in tangible assets and market capitalisation Long bond yield vs. GRT forward yield Portfolio overview Contribution from offshore Consolidated portfolio overview Property investment activities Expense to income ratios (IFRS) Expense to income ratios (gross) RSA diversified borrowings — nominal value Loan to value and interest cover ratios Loan exposure per financier RSA Debt expiry profile per financier RSA Fixed interest rate expiry profile RSA

10 11 12 13 14 15 09 16

Wealth created & distributed to stakeholders

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ANNEXURE CONTENTS

17 18 19 20 21 22 23 25 26 27 28 29 30 31 24

Shares issued & beneficial shareholders holding >2% at FY18 Key performance indicators RSA Portfolio overview RSA (excl. V&A) Split of RSA property portfolio Acquisitions RSA Disposals RSA Non-current assets held for sale RSA Developments & capital expenditure RSA (cont.) Commitments RSA Retail overview RSA Office overview RSA Industrial overview RSA GLA & vacancy reconciliation RSA Developments & capital expenditure RSA Key performance indicators V&A Waterfront (50%)

32

V&A Waterfront portfolio overview (50%)

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ANNEXURE CONTENTS

33 34 35 36 37 38

Split of V&A Waterfront property portfolio Developments & commitments V&A Waterfront (50%) Net property income analysis V&A Waterfront (50%) V&A Waterfront overview GLA & vacancy reconciliation V&A Waterfront (50%) Key performance indicators GOZ

39 40

GOZ Portfolio overview Split of GOZ property portfolio

41

Acquisitions & disposals GOZ

42 43 44 45 46

Developments & commitments GOZ Non current assets held for sale GOZ Net property income analysis GOZ GOZ property & tenant overview GLA & vacancy reconciliation GOZ

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▪ Largest South African primary listed REIT ▪ 23rd largest company in the FTSE/JSE Top 40 Index ▪ Gross market capitalisation R79.3bn ▪ Liquid and tradeable: − R5.9bn average value of shares traded per month ▪ 9th year inclusion in FTSE/JSE Responsible Index ▪ 2nd year inclusion in the FTSE4Good Emerging Index ▪ Top 10 constituent of FTSE EPRA/NAREIT Emerging Index

Investment proposition

▪ Sustainable quality of earnings ▪ 15 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 B-BEE contributor

ANNEXURE 01: COMPANY HIGHLIGHTS

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78.5 84.4 89.5 95.0 101.2 44.5 82.8 44.5 94.3 100.8 107.4 FY14 FY15 FY16 FY17 FY18

Interim dividend Special dividend Final dividend

ANNEXURE 02: GROWTH IN DIVIDEND PER SHARE (cents)

183.8 161.3 173.4 208.6

Growth

6.5%

7.5% 6.0% 6.5% 6.5% 195.8

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50

500 1,000 1,500 2,000 2,500 3,000 15 30 45 60 75 90 105 120 135 150 FY12 FY13 FY14 FY15 FY16 FY17 FY18

ANNEXURE 03: GROWTH IN TANGIBLE ASSETS AND MARKET CAPITALISATION

Rbn cents 3 000 2 500 2 000 1 500 1 000 500

2 669c 2 575c

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

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4% 5% 6% 7% 8% 9% 10% 11% GRT Forward Yield SA Long Bond Yield 8.8%

ANNEXURE 04: LONG BOND YIELD VS. GRT FORWARD YIELD

Jun 2012 Dec 2012 Jun 2013 Dec 2013 Jun 2014 Dec 2014 Jun 2015 Dec 2015 Jun 2016 Dec 2016 Jun 2017 Dec 2017

8.4%

Jun 2018

Source: Anchor Stockbrokers

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RETAIL OFFICE (4) INDUSTRIAL RSA TOTAL GOZ (1) (3) V&A (1)

Number of properties 50 179 225 454 57 1 GLA (m²) 1 390 878 1 791 626 2 254 812 5 437 316 1 003 444 231 171 Vacancy (m²) 50 025 154 823 91 067 295 915 10 891 4 208 Vacancy (%) 3.6 8.6 4.0 5.4 2.0 1.8 Valuation (Rm) 29 878 35 322 13 434 78 634 33 591 9 141 Value per m² (excl. bulk) (R) 21 452 19 023 5 557 13 952 AUD3 345 37 672 Average gross rental (per m²/month) (R) 187 159 53 122 AUD238 (2) 238 Average annualised yield (%) 8.2 8.7 9.1 8.7 6.4 8.4 Average in force escalations (%) 7.0 7.4 8.1 7.4 3.3 8.4 Weighted average lease period (years) 3.2 3.9 3.1 3.6 5.3 7.0 Renewal success rate (%) 81.8 54.5 68.4 66.6 51.2 92.4 Weighted average renewal lease period (years) 4.1 3.1 3.0 3.2 4.8 4.0 Weighted average renewal growth (%) (3.1) (2.2) (3.3) (2.8) (3.6) 6.0 Weighted average future escalations on renewals (%) 7.1 8.3 8.3 7.8 3.4 7.8 Total letting success rate (%) 80.3 69.3 85.6 78.7 52.6 92.6 Arrears (Rm) 35.5 16.9 16.1 68.5 8.5 34.8 Provision for bad debts (Rm) 9.8 7.8 9.8 27.4

• 7.6

Bad debts (I/S) (Rm) 4.9 5.4 7.0 17.3

• 0.1

ANNEXURE 05: PORTFOLIO OVERVIEW

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Portfolio Update Property Investment & Development Conclusion Annexures

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. Includes 5 Healthcare assets valued at R2.5bn.

53 73 752 76 906 78 634 7 766 8 705 9 141 20 264 21 181 22 003

5 371 4 200 6 193 440 226

FY16 FY17 FY18

5 521 5 589 6 127 479 524 592 1 185 1 410 1 340 78 291 95 22 19

FY16 FY17 FY18

Book Value of Property Assets EBIT

ANNEXURE 06: CONTRIBUTION FROM OFFSHORE

R121 346m 18.2% 7.5% 64.8% R102 222m 19.8% 7.6% 72.2% 0.4% 4.4% 5.1% R111 218m 19.0% 7.8% 69.2% 3.8% R8 464m 72.5% R7 207m 16.4% 6.6% 76.7% 0.3% R7 901m 17.8% 6.6% 74.6% 1.0% 27.7%

• ffshore

20.5%

• ffshore

Stenham GWI GOZ V&A Waterfront RSA 0.2% GPRE

1. Includes 100% of RSA, 65.5% of GOZ, 50% of the V&A Waterfront, 29.0% of GWI and 41.4% of GPRE which is Growthpoint’s effective shareholding both directly and indirectly through GWI.

(1) (1) 15.8% 7.0% 1.1% 3.4% 0.2%

4

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PROPERTY PORTFOLIO (by value) NET PROPERTY INCOME

ANNEXURE 07: CONSOLIDATED PORTFOLIO OVERVIEW

RSA 64.8% 7.5% 18.2% GOZ V&A Waterfront 4.4% GPRE

(1)

RSA 75.0% 6.9% 16.6% GOZ V&A Waterfront GPRE 0.1% GWI 5.1% 1.4% GWI

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Portfolio Update Property Investment & Development Conclusion Annexures

(1)

1. Includes 100% of RSA, 65.5% of GOZ, 50% of the V&A Waterfront, 29.0% of GWI and 42.0% of GPRE which is Growthpoint’s effective shareholding both directly and indirectly through GWI.

55

ANNEXURES RETAIL Rm OFFICE Rm INDUSTRIAL Rm RSA TOTAL Rm GOZ Rm TOTAL Rm V&A Rm

Opening balance – 1 July 2017 29 588 34 732 12 586 76 906 32 536 109 442 8 705 Purchase price of acquisitions 21,41 922 172 238 1 332 518 1 850

• Selling price of disposals

22,41 (629) (561) (345) (1 535) (1 701) (3 236) (222) (2) Developments and capex 24,25,34,42 403 1 065 680 2 148 102 2 250 296 Transferred to trading & development(3) (131)

• (131)
• (131)
• Fair value adjustment

(406) 45 275 (86) 1 716 1 630 362 Foreign currency translation

• 420

420

• Total – 30 June 2018

29 878 35 322 13 434 78 634 33 591 112 225 9 141 Long-term property assets 29 878 33 135 13 094 76 107 32 938 109 045 9 141 Classified as held for sale 23,43

• 2 187

340 2 527 653 3 180

• Commitments

26,34,42 103 1 085 420 1 608 2 072 1 759 110

ANNEXURE 08: PROPERTY INVESTMENT ACTIVITIES

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Portfolio Update Property Investment & Development Conclusion Annexures

(1) (1)

1. V&A Waterfront is included reflecting Growthpoint's 50% interest, GOZ is reflected at 100%. 2. Disposal relates to the sale of 50% of the portion of Waterway House that is occupied by BAT, to Atterbury. 3. Exxaro building and land transferred to investment property held for trading and development

56

24.5% 23.5% 23.8% 2.7% 3.6% 3.7%

FY16 FY17 FY18

Operating Expense Ratio Property Expense Ratio 12.0% 13.0% 14.2% 4.8% 4.8% 5.1%

FY16 FY17 FY18

Operating Expense Ratio Property Expense Ratio

SOUTH AFRICA GOZ

27.7% 28.1% 28.9% 3.1% 3.3% 3.6%

FY16 FY17 FY18

Operating Expense Ratio Property Expense Ratio

V&A WATERFRONT

ANNEXURE 09: EXPENSE TO INCOME RATIOS (IFRS)

27.1% 27.2% 27.5% 31.4% 30.8% 32.5% 17.8% 16.8% 19.3%

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36.2% 35.0% 35.1% 2.3% 3.0% 3.3%

FY16 FY17 FY18

Operating Expense Ratio Property Expense Ratio 13.0% 13.9% 15.1% 4.7% 4.8% 5.0%

FY16 FY17 FY18

Operating Expense Ratio Property Expense Ratio

SOUTH AFRICA GOZ

34.0% 35.5% 35.1% 2.9% 3.0% 3.3%

FY16 FY17 FY18

Operating Expense Ratio Property Expense Ratio

V&A WATERFRONT

ANNEXURE 10: EXPENSE TO INCOME RATIOS (GROSS)*

38.0% 38.5% 38.4% 38.5% 36.9% 38.4% 18.7% 17.7% 20.1%

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

58

14 880 15 276 15 447 1 803 1 540 603 4 286 5 248 5 036 3 284 6 824 8 233 5 833 400 400

FY16 FY17 FY18

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

(1) (1)

ANNEXURE 11: RSA DIVERSIFIED BORROWINGS — NOMINAL VALUE

Debt capital market 14.9% Traditional bank debt 85.1% Unsecured 32.3% Secured 67.7% Debt capital market 40% Traditional bank debt 60% Unsecured 54.3% Secured 45.7%

R29 288m R24 653m R35 152m

Debt capital market 24.7% Traditional bank debt 75.3% Unsecured 42.6% Secured 57.4%

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1. The total value excludes the deferred payments on the Samrand land purchased (FY16: R165m and FY17: R85m).

59

33.5% 33.4% 35.4%

1 2 3 4 5 6 7

0% 10% 20% 30% 40%

FY16 FY17 FY18 LTV Interest cover ratio (incl V&A)

33.7% 35.0% 35.2%

FY16 FY17 FY18 LTV Interest cover ratio

SOUTH AFRICA GROUP

42.0% 39.4% 36.2%

1 2 3 4 5 6 7 0% 10% 20% 30% 40%

FY16 FY17 FY18 LTV Interest cover ratio

GOZ

ANNEXURE 12: LOAN TO VALUE AND INTEREST COVER RATIOS

3.4x 3.2x 3.9x 3.8x 3.5x 3.3x 3.8x 3.7x 3.6x

(1) (1) (1)

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 equity-accounted and listed investments were included in the fair value of property assets. 2. Calculated in Rands.

(2)

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ANNEXURE 13: LOAN EXPOSURE PER FINANCIER RSA

17% 23% 17% 13%

6%

4%

2% 2%

1%

Euronext (Eurobonds) Standard Bank OMSFIN LibFin ABSA Investec China Construction Bank JSE (Corporate Bonds) Nedbank

15%

RMB

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0% 5% 10% 15% 20% 25% 30% FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 ABSA China Construction Investec JSE (Corporate Bonds) Euronext LibFin Nedbank Omsfin RMB Standard Bank

ANNEXURE 14: DEBT EXPIRY PROFILE PER FINANCIER RSA

10% 9% 15% 27% 8% 7% 3% 19% 0% 2%

62

0% 5% 10% 15% 20% 25% Floating FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29

ANNEXURE 15: FIXED INTEREST RATE EXPIRY PROFILE RSA

19% 6% 15% 23% 8% 5% 0% 2% 1% 17% 2% 2%

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625 669 623 5 033 5 548 6 108 450 471 455 2 710 2 922 2 597 941 1 016 1 176 418 164

1 500 3 000 4 500 6 000 7 500 9 000 10 500 12 000 FY16 FY17 FY18 Employees Shareholders Minority interest holders Providers of debt Governments - direct taxes Reinvested in the group

ANNEXURE 16: WEALTH CREATED & DISTRIBUTED TO STAKEHOLDERS*

R10 790m R10 177m

Rm 9.2% 26.6% 4.4% 49.6% 6.1% 4.1% 10.7% 23.7% 4.2% 55.7% 5.7% 9.4% 27.1% 4.4% 51.4% 6.2% 1.5 %

R10 959m

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Portfolio Update Property Investment & Development Conclusion Annexures

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

64

SHARES

Opening balance 1 July 2017 2 888 462 582 Dividend reinvestment (September 2017) 45 739 890 Dividend reinvestment (March 2018) 36 778 816 Closing balance 30 June 2018 2 970 981 288 Treasury shares held for staff share scheme (25 470 569) Shares in issue (net of treasury shares) 2 945 510 719

% HOLDING SHARES HELD

Government Employees Pension Fund 12.9 382 782 777 Prudential Portfolio Managers 5.1 150 123 110 Investec Asset Management (Pty) Ltd 5.0 147 865 256 Stanlib Asset Management Ltd 4.8 142 564 928 Old Mutual Group 4.1 123 279 942 Sesfikile Capital 4.0 118 049 871 The Vanguard Group 3.9 114 917 838 Coronation Fund Managers Ltd 3.5 103 025 425 Sanlam Investment Management 3.3 97 157 007 Momentum Asset Management 3.1 92 944 767 Blackrock Institutional Trust Company 3.0 90 447 343 Meago Asset Managers 2.5 75 627 076 State Street Global Advisors 2.2 65 817 418 Total shareholders holding >2% 57.4 1 704 602 758 Other 42.6 1 266 378 530 Total 100.0 2 970 981 288 Foreign shareholding: 28% of institutional ownership and 24% of total shares issued

ANNEXURE 17: SHARES ISSUED & BENEFICIAL SHAREHOLDERS HOLDING >2% AT FY18

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FY18 FY17

Vacancies (%) 5.4 4.4 Total arrears (Rm) 68.5 60.4 Provision for bad debts (B/S) (Rm) 27.4 26.1 Bad debts (I/S) (Rm) 17.3 13.2 Average in force escalations (%) 7.4 7.8 Renewal success rate (%) 66.6 73.6 Total letting success rate (%) 78.7 85.3 Weighted average renewal growth (%) (2.8) 1.0 Weighted average future escalations on renewals (%) 7.8 7.8 Number of employees 610 630 Net property income per employee (R) 10 550 820 9 806 349

ANNEXURE 18: KEY PERFORMANCE INDICATORS RSA

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FY16 FY17 FY18 Retail Office Industrial 17.0% 45.6% 37.4% 16.6% 46.0% 37.4% 17.2% 45.5% 37.3% FY16 FY17 FY18 Retail Office Industrial 15.3% 45.1% 39.6% 17.1% 44.9% 38.0% 16.4% 45.2% 38.4%

NET PROPERTY INCOME PROPERTY PORTFOLIO VALUE

FY16 FY17 FY18 Retail Office Industrial 48.6% 39.0% 49.6% 39.4% 11.0% 49.5% 38.6% 11.9%

NUMBER OF PROPERTIES

ANNEXURE 19: PORTFOLIO OVERVIEW RSA (EXCL. V&A)

R5 725m R6 178m R6 436m 467 471 454 R73 752m R76 906m R78 634m

12.4%

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ANNEXURE 20: SPLIT OF RSA PROPERTY PORTFOLIO

45% 38% 17% 54% 24% 9% 7%

4%

2%

33% 26% 41%

57% 22% 11% 5% 3%

1% 1%

VALUE VALUE GLA GLA

Office Retail Industrial Greater JHB Western Cape Kwazulu-Natal Pretoria Eastern Cape North West Other

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SECTOR DATE PURCHASE PRICE Rm YIELD %

Acquisitions Remaining 58% of N1 City Mall, Goodwood, Cape Town Retail October 2017 922.1 8.0% Exxaro Corporate Centre, Pretoria (2) Office March 2018 129.3

• Bloekombome - Exxaro Land, Pretoria (2)

Office March 2018 1.2 Land Lascelles, Meadowbrook, Germiston Industrial November 2017 132.2 9.3 Mount Edgecombe Industrial Park, Mount Edgecombe, Durban Industrial March 2018 105.3 Land Pretoria Head & Neck Private Hospital, Menlyn, Pretoria (1) Healthcare Fund June 2018 41.8 10.5 Total 1 331.9

ANNEXURE 21: ACQUISITIONS RSA

1. Land acquired to be developed and then sold to the Healthcare Fund, currently included in the office portfolio. 2. Property acquired for Trading and Development purposes.

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SECTOR DATE SELLING PRICE Rm PROFIT/(LOSS) ON COST Rm PROFIT/(LOSS) ON BOOK VALUE Rm YIELD (%) Disposals Hatfield Plaza, Hatfield, Pretoria Retail March 2018 285.3 67.1 4.3 9.5 OK Empangeni, Empangeni, Durban Retail July 2017 172.5 111.3 (2.5) 9.3 Hatfield Mall, Hatfield, Pretoria Retail March 2018 61.4 6.0 (1.9) 9.5 Campus Building, Hatfield, Pretoria Retail March 2018 39.0 12.8 (1.4) 9.5 Jet Bloemfontein, Bloemfontein Retail September 2017 38.3 14.5 3.0 9.6 Standard Plaza, Hatfield, Pretoria Retail March 2018 32.0 11.9 (1.1) 9.5 Turbine Square & Hall, Newtown, Johannesburg Office March 2018 410.0 (55.2) (7.4) 11.9 Salga House, Cape Town Office February 2018 91.9 36.5 0.5 9.6 Dunkeld Gardens, Dunkeld West, Johannesburg Office June 2018 35.0 21.3 (1.2) 8.9 HP Senderwood, Bedfordview, Johannesburg Office May 2018 24.0 (21.7) (0.1) 12.0 Pine Industrial Park, New Germany (1) Industrial March 2018 103.8 35.1 (5.3) 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 Coldcem, Industria, Boksburg Industrial June 2018 35.0 3.5 0.5 12.6 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 Kentyre, Randburg, Johannesburg Industrial February 2018 15.6 (1.6)

• 8.4

Bardene, Bardene, Boksburg Industrial October 2017 14.0 4.1 1.7 11.2 Greenhills Centre, Elandsfontein, Germiston Industrial July 2017 13.4 2.1

• 10.6

Northreef, Elandsfontein Industrial December 2017 11.1 4.6 0.9 9.3 Total 1 534.8 318.1 (8.1)

ANNEXURE 22: DISPOSALS RSA

1. The trading profits of R33.6mil will realise in FY19, when the remaining units transfer.

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SECTOR FY18 Rm Properties Held For Sale Investec, 100 Grayston Drive Sandton(2) Office 2 187.0 Rivonia Crossing 2, Sunninghill, Sandton Industrial 185.2 Pine Industrial Park, New Germany, Durban(1) Industrial 34.4 Highland, Meadowdale, Germiston Industrial 33.0 3 Spartan Crescent, Eastgate, Sandton Industrial 25.0 Laser Commercia Erf 65, Clayville, Midrand Industrial 19.4 Isando Industrial, Isando, Kempton Park Industrial 16.5 Aeroton 7 of 17, Aeroton, Johannesburg Industrial 11.8 Laser Commercia Erf 2 and 3, Clayville, Midrand Industrial 9.2 Equitable Dev Co, Florida, Roodepoort Industrial 5.3 Total RSA 2 526.8

ANNEXURE 23: NON-CURRENT ASSETS HELD FOR SALE RSA

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Portfolio Update Property Investment & Development Conclusion Annexures

1. The trading profits of R33.6mil will realise in FY19, when the remaining units transfer. 2. This value excludes the R13m sale of Growthpoint’s share in the share block that owns the parkade. Property, incl. sale of share block, successfully transferred on 28 August 2018.

71

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

SECTOR ESTIMATED COMPLETION DATE FY18 Rm

Developments and Capital Expenditure(1) Greenacres, Greenacres, Port Elizabeth Retail December 2017 46.7 Northgate, Randburg, Johannesburg Retail November 2018 43.5 Other, below R30m Retail 312.4 Total Retail 402.6 Discovery 1 & 2 (55%), Sandhurst, Sandton Office November 2017 301.6 Lakeside 1, Centurion, Pretoria Office May 2019 154.1 144 Oxford Road, Illovo, Sandton Office September 2019 128.6 Woodlands Office Park, Woodmead, Johannesburg Office November 2020 51.3 Sandton Summit, Sandton (infrastructure spend) Office

• 49.9

The Boulevard, Umhlanga Ridge, Umhlanga Rocks Office May 2018 48.9 Other, below R30m Office 330.8 Total Office 1 065.2

ANNEXURE 24: DEVELOPMENTS & CAPITAL EXPENDITURE RSA

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SECTOR ESTIMATED COMPLETION DATE FY18 Rm Developments and Capital Expenditure(1) Runway Park, Mobeni, Durban Industrial July 2018 138.2 Samrand Development, Midrand Industrial December 2017 78.6 Mill Road Park, Bellville, Cape Town Industrial September 2018 76.7 Growthpoint Industrial Estate, Erf 307, Meadowdale, Germiston Industrial December 2017 63.2 Samrand Erf 5456, Midrand Industrial November 2017 34.0 Wadestone Industrial Park, Germiston Industrial August 2019 32.7 Montague Business Park (25%), Montague Gardens, Cape Town Industrial June 2021 30.7 Other, below R30m Industrial 225.7 Total Industrial 679.8 Total Retail, Office & Industrial 2 147.6 Development Expenditure 1 371.8 Capital Expenditure 775.8

ANNEXURE 25: DEVELOPMENTS & CAPITAL EXPENDITURE RSA (cont.)

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

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Commitments SECTOR ESTIMATED COMPLETION DATE FY18 Rm Developments(1) 1 608.2 Lakeside Mall, Benoni Retail November 2018 61.4 River Square Shopping Centre, Three Rivers, Vereeniging Retail June 2019 32.5 144 Oxford Road, Rosebank Office October 2019 524.9 Exxaro Head Office and AECOM, Centurion Office May 2019 333.1 Discovery 1 & 2 (55%), Sandhurst, Sandton Office April 2018 97.3 Draper on Main, Claremont, Cape Town Office March 2019 92.5 32 on Kloof, Cape Town Office June 2019 36.9 GZI, Wadestone Park, Wadeville, Germiston Industrial May 2019 150.3 Millroad Industrial Park, Mill Road Park, Bellville, Cape Town Industrial October 2018 92.4 Runway Park, Mobeni, Durban Industrial July 2018 60.1 Midrand Central Business Park 518, Midrand Industrial November 2018 44.3 Other below R30m Various Various 82.5

ANNEXURE 26: COMMITMENTS RSA

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

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TOP 10 PROPERTIES BY VALUE FAIR VALUE Rm GLA m²

Brooklyn Mall and Design Square (75%), Brooklyn, Pretoria 2 082 56 319 N1 City Mall (100%), Goodwood, Cape Town 1 702 63 374 Festival Mall, Kempton Park, Johannesburg 1 695 83 368 Geenacres, Greenacres, Port Elizabeth 1 570 49 475 Waterfall Mall, Rustenburg 1 562 49 734 Lakeside Mall, Benoni, Johannesburg 1 413 65 366 Vaal Mall (66.6%), Vanderbijlpark, Johannesburg 1 305 44 014 Kolonnade (50%), Montana Park, Pretoria 1 173 38 317 La Lucia Mall, La Lucia, Durban 1 162 37 286 The Constantia Village, Constantia, Cape Town 1 147 20 391 Sub Total 14 811 507 644 Balance of the sector 15 067 883 234 Total for the sector 29 878 1 390 878

TOP 10 TENANTS GLA(1) m²

Edcon Holdings Ltd 116 636 The Foschini Group Ltd 60 072 Pepkor Holdings Ltd 71 223 Shoprite Holdings Ltd 141 436 Mr Price Group Ltd 56 469 Pick n Pay Stores Ltd 112 254 Truworths International Ltd 32 883 Massmart Holdings Ltd 66 839 Woolworths Holdings Ltd 89 772 Clicks Group Ltd 28 061 Sub Total 775 645 Balance of the sector 565 208 Total for the sector (excluding vacancies) 1 340 853

13.5 9.8 10.5 20.5 19.2 18.1 4.8 3.6

FY24 and beyond By FY23 By FY22 By FY21 By FY20 By FY19 Monthly Vacant

8.4 9.9 11.0 22.9 19.7 21.1 4.0 3.0

FY24 and beyond By FY23 By FY22 By FY21 By FY20 By FY19 Monthly Vacant

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

ANNEXURE 27: RETAIL OVERVIEW RSA

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1. Ranked in terms of gross monthly rental.

75

TOP 10 PROPERTIES BY VALUE FAIR VALUE Rm GLA m²

Investec, 100 Grayston Drive, Sandton, Johannesburg 2 187 70 945 Discovery 1 & 2 (55%) , Sandton, Johannesburg 1 856 63 933 The Woodlands, Woodmead, Johannesburg 1 792 125 874 Constantia Office Park, Roodepoort, Johannesburg 1 106 73 212 Inanda Greens, Wierda Valley, Sandton, Johannesburg 987 40 774 The Place, Sandton, Johannesburg 894 35 156 MontClare Place, Claremont, Cape Town 668 29 649 Inyanda 1,3 and 4, Parktown North, Johannesburg 561 23 196 Golf Park, Mowbray, Cape Town 533 30 790 Country Club Estate, Woodmead, Johannesburg 504 33 142 Sub Total 11 088 526 671 Balance of the sector 24 234 1 264 955 Total for the sector 35 322 1 791 626

TOP 10 TENANTS GLA(1) m²

Investec Bank Ltd 83 781 Deloitte (South Africa) 47 680 Discovery Holdings Ltd 65 501 Transnet 31 535 EOH Holdings Ltd 41 363 Absa Bank Ltd 27 366 Firstrand Bank Ltd 16 156 Edward Nathan Sonnenbergs Inc 14 889 Nestle South Africa (Pty) Ltd 11 986 Norton Rose SA 7 969 Sub Total 348 226 Balance of the sector 1 288 577 Total for the sector (excluding vacancies) 1 636 803

20.8 9.3 9.4 16.4 16.3 16.2 3.0 8.6 FY24 and beyond By FY23 By FY22 By FY21 By FY20 By FY19 Monthly Vacant 25.9 10.4 8.0 14.8 15.8 16.0 3.0 6.1 FY24 and beyond By FY23 By FY22 By FY21 By FY20 By FY19 Monthly Vacant

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

ANNEXURE 28: OFFICE OVERVIEW RSA

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Portfolio Update Property Investment & Development Conclusion Annexures

1. Ranked in terms of gross monthly rental.

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TOP 10 PROPERTIES BY VALUE FAIR VALUE Rm GLA m²

Growthpoint Business Park, Midrand 608 68 701 Hilltop Industrial Estate, Elandsfontein, Johannesburg 366 76 283 Montague Business Park (25%), Montague Gardens, Cape Town 365 34 536 Runway Park, Mobeni, Durban 262 12 160 Isobar, Isando, Kempton Park, Johannesburg 231 50 219 Central Park, Elsiesrivier, Cape Town 209 49 135 Adcock Ingram, Midrand 201 21 536 Omni Park, Aeroton, Johannesburg 191 41 336 Rivonia Crossing 2, Sunninghill, Sandton, Johannesburg 185 19 778 N1 Business Park (20%), Midrand 177 21 567 Sub Total 2 795 395 251 Balance of the sector 10 639 1 859 561 Total for the sector 13 434 2 254 812

TOP 10 TENANTS GLA(1) m²

The Bidvest Group Ltd 74 908 Adcock Ingram Holdings Ltd 27 280 Consolidated Steel Industries (Pty) Ltd 60 267 Allied Electronic Corporation Ltd 30 413 Scania SA (Pty) Ltd 23 717 Distell Ltd 45 636 Pioneer Foods Ltd 20 122 Barloworld Ltd 18 516 Heneways Freight Services (Pty) Ltd 25 573 Nestlé South Africa (Pty) Ltd 16 255 Sub Total 342 687 Balance of the sector 1 821 058 Total for the sector (excluding vacancies) 2 163 745

11.1 12.0 15.1 13.0 17.7 23.5 3.6 4.0 FY24 and beyond By FY23 By FY22 By FY21 By FY20 By FY19 Monthly Vacant 10.9 10.2 15.0 13.3 16.8 25.4 4.4 4.0 FY24 and beyond By FY23 By FY22 By FY21 By FY20 By FY19 Monthly Vacant

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

ANNEXURE 29: INDUSTRIAL OVERVIEW RSA

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Portfolio Update Property Investment & Development Conclusion Annexures

1. Ranked in terms of gross monthly rental.

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TOTAL GLA m² VACANT AREA m² VACANCY %

Balance as at 1 July 2017 5 425 006 240 978 4.4 GLA adjustments 5 826 (1 927) Disposals (160 096) (4 804) Acquisitions 53 125 17 441 Developments and extensions 113 455 113 455 Leases expired in the period (1) 880 756 Renewals of expired leases (2) (586 337) New letting of vacant space (507 361) Leases terminated 143 714 Balance as at 30 June 2018 5 437 316 295 915 5.4

ANNEXURE 30: GLA & VACANCY RECONCILIATION RSA

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Portfolio Update Property Investment & Development Conclusion Annexures

1. 16.2% of opening balance GLA expired during the half year under review compared to 21.5% for FY17. 2. Retention of 66.6% compared to 73.6% for FY17.

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FY18 FY17

Vacancies (%) 1.8 0.8 Total arrears (Rm) 34.8 35.5 Provision for bad debts (B/S) (Rm) 7.6 5.6 Bad debts (I/S) (Rm) 0.1 2.7 Average in force escalations (%) 8.4 8.0 Renewal success rate (%) 92.4 98.2 Total letting success rate (%) 92.6 98.3 Weighted average renewal growth (%) 6.0 7.9 Weighted average future escalations on renewals (%) 7.8 7.9 Number of employees (100%) (1) 213 188 Net property income per employee (R) 5 577 465 5 553 191

ANNEXURE 31: KEY PERFORMANCE INDICATORS V&A WATERFRONT (50%)

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1. An additional 96 staff are employed in terms of a management contract with the Radisson Red Hotel.

79

54.1% 49.6% 47.3% 18.6% 21.8% 22.6% 8.9% 9.6% 9.1% 18.4% 19.0% 21.0%

FY16 FY17 FY18

Retail Office Fishing & Industrial Hotel & Residential 52.6% 50.5% 51.7% 23.8% 24.5% 24.0% 5.8% 6.8% 7.7% 11.4% 12.5% 11.9% 6.4% 5.7% 4.7%

FY16 FY17 FY18

Retail Office Fishing & Industrial Hotel & Residential Bulk

NET PROPERTY INCOME PROPERTY PORTFOLIO VALUE

ANNEXURE 32: V&A WATERFRONT PORTFOLIO OVERVIEW (50%)

R522m R462m R594m R7 766m R9 141m R8 705m

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ANNEXURE 33: SPLIT OF V&A WATERFRONT PROPERTY PORTFOLIO

52% 24% 7% 12% 5% 47% 23% 9% 21% 21% 31% 25% 23% 95% 5%

PROPERTY PORTFOLIO BY VALUE NET PROPERTY INCOME PROPERTY PORTFOLIO BY GLA DEVELOPED VS. UNDEVELOPED BY VALUE

Developed Undeveloped Retail Office Fishing & Industrial Hotel & Residential Bulk

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SECTOR ESTIMATED COMPLETION DATE FY18 Rm

Developments and Capital Expenditure (1) Battery Parkade Parkade September 2018 81.8 Waterway House Office May 2017 29.5 No 6 Silo - Radisson Red Hotel Hotel July 2017 24.7 Other below R20m Various Various 159.6 Total 295.6 Commitments Cruise Liner Terminal Fishing & Industrial March 2019 63.6 Dock Road Junction Office December 2018 27.6 Battery Parkade Parkade May 2018 13.4 Other below R10m Various Various 5.6 Total 110.2

ANNEXURE 34: DEVELOPMENTS & COMMITMENTS V&A WATERFRONT (50%)

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1. The average yield for developments is 7.0% - 9.0% on a fully let basis.

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FY18 Rm FY17 Rm INCREASE/ (DECREASE)

Gross property revenue 836 726 15.2% Property related 783 726 Radisson Red Hotel 48 Workshop 17 5 Property expenses (242) (204) 18.6% Property related (210) (204) Radisson Red Hotel (30) Workshop 17 (2) Net property income (1) 594 522 13.8% Adjustments (54) (18) Waterway House South (6) (7) Waterway House North (8) (1) Silo 5 (10) (6) Silo 6 (Radisson Red) (18)

• Other

(12) (4) Adjusted “like-for-like” distributable income 540 504 7.1%

ANNEXURE 35: NET PROPERTY INCOME ANALYSIS V&A WATERFRONT (50%)

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1. Distributable income to Growthpoint, excluding NCI, equates to R592m (FY17: R524m).

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TOP 10 TENANTS (100%) GLA(1) m² Allan Gray (Pty) Ltd 19 712 Nedbank Group Ltd 26 552 Legacy Hotels 16 226 Tourvest Holdings Ltd 3 210 Edcon Holdings Ltd 7 940 Sun International Hotels 17 100 Newmark Hotels 7 563 PwC 9 650 The Foschini Group Ltd 2 835 Woolworths Holdings Ltd 7 605 Subtotal 118 393 Balance of V&A 335 533 Total for V&A Waterfront (excluding vacancies) (100%) 453 926 46 12 11 6 9 14 2 FY24 and beyond By FY23 By FY22 By FY21 By FY20 By FY19 Vacant

ANNEXURE 36: V&A WATERFRONT OVERVIEW

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

36 10 16 7 12 19 FY24 and beyond By FY23 By FY22 By FY21 By FY20 By FY19 Vacant

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1. Ranked in terms of gross monthly rental.

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TOTAL GLA m2 VACANT AREA m2 VACANCY %

Balance as at 1 July 2017 223 016 1 734 0.8% GLA adjustments 302 302 Developments and extensions 7 854 7 854 Leases expired in the period (1) 45 150 Renewals of expired leases (2) (41 597) New letting of vacant space (10 835) Leases terminated 1 600 Balance as at 30 June 2018 231 172 4 208 1.8%

ANNEXURE 37: GLA & VACANCY RECONCILIATION V&A WATERFRONT (50%)

1. 20.2% of opening balance GLA expired during the year under review compared to 39.3% for FY17. 2. Retention of 92.4% compared to 98.2% for FY17.

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FY18 FY17

Vacancies (%) (1) 2.0 1.3 Total arrears (Rm) 8.5 3.4 Provision for bad debts (B/S) (Rm)

• Bad Debts (I/S) (Rm)
• Renewal success rate (%)

51.2 81.4 Total letting success rate (%) 52.6 85.2 Weighted average renewal growth (%) (3.6) (7.7) Weighted average future escalations on renewals (%) (2) 3.4 3.3 Number of employees 24 23 Net property income per employee (R) 90 583 333 99 695 652

ANNEXURE 38: KEY PERFORMANCE INDICATORS GOZ

1. Measurements and ratios are based on income and not GLA (when compared to RSA). 2. Weighted average escalation on entire portfolio WARR 3.3%.

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48.5% 61.3% 62.2% 51.5% 38.7% 37.8%

10.57 10.26 9.97 9.6 9.7 9.8 9.9 10 10.1 10.2 10.3 10.4 10.5 10.6 10.7

FY16 FY17 FY18 Office Industrial average exchange rate

20 26 26 38 31 31

FY16 FY17 FY18

NET PROPERTY INCOME NUMBER OF PROPERTIES

55.9% 66.0% 66.0% 44.1% 34.0% 34.0%

11.04 10.04 10.16 9.4 9.6 9.8 10 10.2 10.4 10.6 10.8 11 11.2

FY16 FY17 FY18 Office Industrial closing exchange rate

PROPERTY PORTFOLIO VALUE

ANNEXURE 39: GOZ PORTFOLIO OVERVIEW

R2 293m R1 913m R2 174m 57 58 57 R32 536m R30 938m R33 591m

AUD ZAR AUD ZAR Office Industrial Office Industrial Office Industrial

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ANNEXURE 40: SPLIT OF GOZ PROPERTY PORTFOLIO

66% 34% 29% 26% 27% 6%

5% 6%

1%

29% 71% 41% 18% 15% 12%

2%

11%

1%

VALUE (AUD) VALUE GLA GLA

Office Industrial Queensland Victoria New South Wales South Australia ACT Western Australia Tasmania

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SECTOR DATE FY18 Rm FY18 AUDm

Acquisitions (1) 2 Hugh Edwards Drive, Perth Airport, WA Industrial October 2017 185.7 17.4 58 Tarlton Crescent, Perth Airport, WA Industrial October 2017 157.6 14.8 10 Hugh Edwards Drive, Perth Airport, WA Industrial October 2017 92.3 8.7 36 Tarlton Crescent, Perth Airport, WA Industrial October 2017 82.2 7.7 Total 517.8 48.6

ANNEXURE 41: ACQUISITIONS & DISPOSALS GOZ

SECTOR DATE SELLING PRICE BOOK VALUE FY18 Rm FY18 AUDm FY18 Rm FY18 AUDm

Disposals 1231-1241 Sandgate Road, Nundah, QLD Office July 2017 1 082.1 106.3 1 054.1 103.5 522-550 Wellington Road, Mulgrave, VIC Industrial December 2017 890.7 90.8 646.8 65.9 Total 1 972.8 197.1 1 700.9 169.4

1. The Perth industrial acquisitions are managed / reported as one property.

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SECTOR ESTMATAED COMPLETION DATE FY18 Rm FY18 AUDm Developments and Capital Expenditure Buildings 1 & 3, 572-576 Swan Street, Richmond, VIC Office December 2017 46.3 4.6 333 Ann Street, Brisbane, QLD Office December 2017 27.1 2.7 5 Viola Place, Brisbane Airport, QLD Industrial May 2018 22.1 2.2 Other Various 6.6 1.0 Total 102.1 10.5 Commitments Botanicca 3 development at Richmond, VIC Office Second half of 2020 996.7 98.1 836 Wellington Road, West Perth, WA - acquisition Office October 2018 927.5 91.3 1 Charles Street, Parramatta, NSW - capex/refurbishment clause Office June 2019 59.9 6.0 Building 2, 572-576 Swan Street, Richmond, VIC - lessor works Office June 2019 37.4 3.8 120-132 Atlantic Drive, Keysborough, VIC - expansion clause Industrial December 2028 25.4 2.5 1500 Ferntree Gully Road, Knoxfield, VIC - expansion clause Industrial August 2024 25.4 2.5 Total 2 072.3 204.2

ANNEXURE 42: DEVELOPMENTS & COMMITMENTS GOZ

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ANNEXURE 43: NON CURRENT ASSETS HELD FOR SALE GOZ

SECTOR FY18 Rm FY18 AUDm Non-Current Assets Held For Sale Quad 2, 6 Parkview Drive, Sydney Olympic Park, NSW Office 322.7 31.8 Quad 3, 102 Bennelong Parkway, Sydney Olympic Park, NSW Office 330.3 32.5 Total 653.0 64.3

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FY18 AUDm FY17 AUDm INCREASE/ (DECREASE) Gross property revenue 259.1 261.4 (0.9%) Property expenses (40.6) (38.1) 6.6% Net property income 218.5 223.3 (2.1%) Adjustments (44.3) (49.7) Acquisitions and developments (37.0) (25.2) Disposals (2.4) (18.6) GMF & IDR Distribution (4.9) (5.9) Adjusted “like-for-like” net property income 174.2 173.6 0.3% Office 97.8 98.4 (0.6%) Industrial 76.4 75.2 1.5%

ANNEXURE 44: NET PROPERTY INCOME ANALYSIS GOZ

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TOP 10 PROPERTIES BY VALUE FAIR VALUE Rm GLA m²

1 Charles Street, Parramatta, NSW Office 3 151 32 356 70 Distribution Street, Larapinta, QLD Industrial 2 236 76 109 75 Dorcas Street, South Melbourne, VIC Office 1 931 23 811 20 Colquhoun Road, Perth Airport, WA Industrial 1 664 80 374 Optus Centre, 15 Green Square Close, QLD Office 1 462 16 442 Building C, 219-247 Pacific Highway, Artarmon, NSW Office 1 253 14 375 333 Ann Street, Brisbane, QLD Office 1 249 16 320 Vantage, 109 Burwood Road, Hawthorn VIC Office 1 047 12 388 3 Murray Rose Avenue, Sydney Olympic Park, NSW Office 1 027 13 423 5 Murray Rose Avenue, Sydney Olympic Park, NSW Office 1 022 12 386 Sub Total 16 042 297 984 Balance of GOZ 17 549 705 460 TOTAL FOR GOZ 33 591 1 003 444

TOP 10 TENANTS GLA(1) m²

Woolworths 282 041 NSW Police Department 32 356 Commonwealth of Australia 24 370 Country Road Group 23 156 Linfox 58 077 Samsung Electronics 13 423 Lion 12 317 Australia and New Zealand Banking Group 13 744 Jacobs Group 8 207 Queensland Urban Utilities 7 663 Sub Total 475 354 Balance of GOZ 517 199 TOTAL FOR GOZ (excluding vacancies) 992 553 51 8 21 6 10 2 2 FY24 and beyond By FY23 By FY22 By FY21 By FY20 By FY19 Vacant

LEASE EXPIRY (% OF INCOME)

ANNEXURE 45: GOZ PROPERTY & TENANT OVERVIEW

1. Ranked in terms of gross monthly rental.

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TOTAL GLA m2 VACANCY(1) % Balance as at 1 July 2017 1 053 148 1.3 GLA adjustments (545) Disposals (81 124) Acquisitions, developments and extensions 31 965 Balance as at 30 June 2018 1 003 444 1.7

ANNEXURE 46: GLA & VACANCY RECONCILIATION GOZ

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

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

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Portfolio Update Property Investment & Development Conclusion Annexures

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