ANNUAL RESULTS PRESENTATION FOR THE YEAR ENDED 30 JUNE 2017 AGENDA - - PowerPoint PPT Presentation

ANNUAL RESULTS PRESENTATION

FOR THE YEAR ENDED 30 JUNE 2017

2

AGENDA

01

Milestones & Highlights

02

Financial Results

03

Capital Management

04

Portfolio Update

05

Property Investment & Development

06

Conclusion

07

Annexures

South Africa V&A Waterfront GOZ Globalworth

Oxford Corner, Rosebank

MILESTONES & HIGHLIGHTS

M1 Place, Eastgate, Sandton

4

MILESTONES

South Africa

▪ Gross monthly billings in excess of R1bn ▪ Sale of Harrowdene to Huawei for R846m ▪ First Trading Profit and Development Fee income earned ▪ 1 399 222m² of space let in FY17

V&A Waterfront

▪ Completion of Silo Precinct scheduled for September when the Zeitz MOCAA and Radisson Red Hotel opens ▪ Good progress implementing strategic initiatives, including Internationalisation, Funds Management and Trading and Development

5

Australia

▪ Successful acquisition of AUD440.3m GPT Metro Office Fund (GMF) ▪ Significant portfolio reweighting through AUD480m office asset purchases and AUD166m strategic industrial asset sales:

• Office 66% vs. 56% at FY16
• Geographically to New South Wales 26% from 20% at FY16

Funds management

▪ R2.3bn Healthcare Fund established with 5 assets ▪ Capital raise to third parties scheduled for HY18 ▪ Further acquisitions and developments in the pipeline

Eastern Europe

▪ Successful EUR186.4m acquisition of 26.9% of Globalworth Real Estate Investments (GWI)

6

Delivering on our strategic initiatives in line with our vision:

To be a

leading international

property company providing space to thrive

Open JV (50/50)

▪ Strategic venture aligning ourselves with the co-working, flexible office trend ▪ Anticipated rollout of 8 locations in 3 years, with 138 West Street Sandton just opened ▪ Open will operate the sites and GRT will provide the funding ▪ Incubator for thriving businesses and tomorrows office users

7

PERFORMANCE HIGHLIGHTS

195.8 cents

▪ 6.5% growth in total FY17 dividend per share ▪ Final dividend of 100.8c up 6.9% compared to FY16 final dividend of 94.3c

R5.6bn

▪ Total distributable income ▪ 10.4% growth FY16 to FY17

R122.3bn

▪ Group property assets

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35.0% Group LTV

▪ Gearing remains below 40% ▪ Increased from 33.7% at FY16

27.1%

▪ RSA total expense to income ratio ▪ Expenses under control

Total RSA arrears – R60.4m

▪ Well contained ▪ 6.5% of collectables ▪ R13.2m bad debt write

• ff (I/S)

Vacancies – 4.4%

▪ RSA vacancies improved from 5.7% at FY16 ▪ Strong focus on tenant retention and leasing

9

COMPANY HIGHLIGHTS

▪ Largest South African primary listed REIT ▪ 21st largest company in the FTSE/JSE Top 40 Index ▪ Gross market capitalisation R70.7bn ▪ Liquid and tradeable:

• R3.8bn average value of shares traded per month

▪ 8th year inclusion in FTSE/JSE Responsible Index ▪ 1st year inclusion in the FTSE4Good Emerging Index ▪ Top 10 constituent of FTSE EPRA/NAREIT Emerging Index

Investment proposition

▪ Sustainable quality of earnings ▪ 14 year track record of uninterrupted dividend growth ▪ Underpinned by high-quality physical property assets ▪ Diversified across international geographies and sectors ▪ Dynamic and proven management track record ▪ Best practice corporate governance ▪ Transparent reporting ▪ Level 3 BEE contributor

10

72.7 78.5 84.4 89.5 95.0 44.5 76.3 82.8 44.5 94.3 100.8 FY13 FY14 FY15 FY16 FY17

Interim dividend Special dividend Final dividend

GROWTH IN DIVIDEND PER SHARE (cents)

183.8 149.0 161.3 173.4 195.8

Growth

6.5%

8.3% 7.5% 6.0% 6.5%

The Place, Sandhurst, Sandton

11

500 1 000 1 500 2 000 2 500 3 000 15 30 45 60 75 90 105 120 135 FY11 FY12 FY13 FY14 FY15 FY16 FY17

GROWTH IN TANGIBLE ASSETS AND MARKET CAPITALISATION

Rbn cents 3 000 2 500 2 000 1 500 1 000 500 2 510c 2 448c Tangible assets (Rbn) Market cap (Rbn) Share price (cents) NTAV per share (cents)

12

4% 5% 6% 7% 8% 9% 10% 11%

Long Bond GRT Forward Yield

8.80%

LONG BOND YIELD VS. GRT FORWARD YIELD

Jun 2011 Dec 2011 Jun 2012 Dec 2012 Jun 2013 Dec 2013 Jun 2014 Dec 2014 Jun 2015 Dec 2015 Jun 2016 Dec 2016

8.18%

Greencourt “A” & “B”, Bucharest, Romania Jun 2017

FINANCIAL RESULTS

Waterway House, V&A Waterfront

14

FY17 Rm FY16 Rm INCREASE/ (DECREASE)

Gross property income 10 716 9 764 9.8% RSA(1) 8 079 7 589 6.5% GOZ 2 637 2 175 21.2% Property expenses (2 245) (2 126) 5.6% RSA (1 901) (1 864) 2.0% GOZ (344) (262) 31.3% Net property income 8 471 7 638 10.9% Other operating expenses (416) (308) 35.1% RSA (289) (204) 41.7% GOZ (127) (104) 22.1% Net property income after operating expenses 8 055 7 330 9.9% Finance costs (2 510) (2 466) 1.8% RSA (1 944) (1 989) (2.3%) GOZ (566) (477) 18.7% Finance income 789 760 3.8% Investment income from V&A Waterfront 479 429 11.7% Investment income from GWI 78

• 100%

Other finance income(2) 232 331 (29.9%) Adjustment for NCI, foreign exchange profit /(loss) and normal taxation (734) (552) 33.0% Distributable income 5 600 5 072 10.4% Dividend for the period 5 600 5 072 10.4%

CONSOLIDATED DISTRIBUTION CALCULATION

• 1. Trading Profits and Development Fees of R91m included in revenue.
• 2. Includes R52m (FY16: R39m) dividends received on treasury shares held, R45m (FY16: R31m) antecedent dividend, R0m (FY16: R22m) distribution from Stenham and R45m (FY16: R50m) interest on V&A Waterfront

development funding. * Average exchange rate at R10.26/AUD (FY16: R10.57/AUD) for GOZ.

15

INCOME STATEMENT

Distributable income growth of 10.4%

▪ Steady contribution from South Africa ▪ First inclusion of Trading Profit and Development Fee income ▪ Solid contribution from the V&A, growth has slowed down as the base has grown ▪ Stable contribution from GOZ due to additional investment of 48.8m shares but earnings impacted negatively due to the higher expected (9.7%) and actual withholding tax rates (9.7% at HY17 vs. 6.9% at HY16 & 6.5% at FY16 ) and the stronger ZAR (R10.26/AUD1 average

• vs. FY16 at R10.57/AUD1)

▪ First dividend contribution from GWI of EUR0.22 cps ▪ Net property income from GOZ increased 19.9% mainly as a result

• f the acquisition of GMF

▪ RSA net property income under pressure ▪ Costing more to keep and attract tenants in a fiercely competitive and weak market

16

Property Expense Ratio Operating Expense Ratio Total Expense Ratio South Africa 23.5% 3.6% 27.1% V&A Waterfront 28.1% 3.3% 31.4% GOZ 13.0% 4.8% 17.8%

Expenses remain under control

▪ 11.7% increase in investment income received from the V&A driven mainly by hotel

• ccupancies combined with

the conversion of development activity into income producing assets ▪ SA property expenses under control ▪ Operating expenses increased as a result of less development fees earned in the current period and the reallocation of expenses ▪ V&A Waterfront and GOZ expense ratios up slightly due to increased

• ffice weightings

▪ Reduction in finance costs for RSA due to increase in use of CCIRS ▪ Increase in finance costs for GOZ due to acquisition of GMF

17

FY17 Rm FY16 Rm INCREASE/ (DECREASE)

Property portfolio(1) 109 442 104 690 4.5% RSA 76 906 73 752 4.3% GOZ(2) 32 536 30 938 5.2% 50% Investment in V&A Waterfront 7 110 6 616 7.5% 26.9% Investment in Globalworth 2 769

• 100%

Other property-related investments 226 440 (48.6%) Nominal borrowings(3) 42 428 38 413 10.5% RSA(4) 29 288 24 653 18.8% GOZ(2) 13 076 13 760 (5.0%) Shareholders interest 72 045 68 295 5.5%

CONSOLIDATED BALANCE SHEET (EXTRACTS)

• 1. Includes R1 241m (FY16: R1 938m) of properties classified as held for sale.
• 2. Closing exchange rate R10.04/AUD (FY16: R11.04/AUD).
• 3. Excludes fair value adjustments.
• 4. The total value for FY17 excludes the deferred payment of R85m (FY16: R165m) on the Samrand land purchased. The outstanding payment is due in September 2017.

18

▪ 4.5% or R4.7bn increase in property values (RSA and GOZ) ▪ R5bn for the acquisition of GMF in GOZ ▪ R1.5bn of assets acquired for the Healthcare Fund ▪ 18.8% increase in borrowings in RSA which was used to fund the GWI acquisition, acquisition of assets for the Healthcare Fund and further investment into the V&A Waterfront and GOZ ▪ 4.6% increase in borrowings in AUD for GOZ as a result of the GMF acquisition which, after the foreign exchange gain

• f R1.4bn, results in a 5.0% decrease in

borrowings in Rands ▪ NAV up 1.7% to 2 518 cents per share from FY16

BALANCE SHEET

19

2 861 3 849 4 087

368 429 479 658 772 865 91 345 22 78

FY15 FY16 FY17

RSA V&A Waterfront GOZ Trading & Development Listed Investments

CONTRIBUTION TO DISTRIBUTABLE INCOME

Growth

10.4%

R5 600m 15.4% 8.6% 73.0% R5 072m 15.2% 8.5% 75.9% R4 232m 15.5% 8.7% 67.6% 0.4% 8.2%

Anslow, Bryanston, Sandton

1. Listed Investments for FY17 consist of investment in GWI, FY16 consists of investment in Stenham.

1.6%

(1)

1.4%

CAPITAL MANAGEMENT

1 Charles Street, Paramatta, NSW, Australia

21

RSA CAPITAL MANAGEMENT

Total debt R29.3bn

▪ Unsecured debt increased by R4.5bn, of which R3.5bn is corporate bonds ▪ 17 new bond issues, publicly and privately placed, listed and unlisted, at margins between 140 to 185 basis points with terms

• f 3 to 7 years

▪ Demand in bond market exacerbated by demand for HQLA bonds by banks ▪ EUR100m loans for GWI investment ▪ Unencumbered assets (properties & investments) R44.2bn ▪ Weighted average cost of debt decreased to 9.2% excluding CCIRS and EUR debt ▪ Funded from:

• R2.5bn equity DRIP proceeds
• R4.6bn net new borrowings
• R2.0bn property disposals

Investment activities

▪ 85.6% of the liabilities are at fixed interest rates for an average term of 3.9 years

Interest rate risk

22

AUD & EUR cross currency interest rate swaps (CCIRS)

▪ Total AUD700m representing 76% of historical cost and 52% of market value of GOZ ▪ Total EUR86.4m together with the direct EUR loans representing 100% of the historical cost of GWI

Credit rating

▪ Our rating is capped at the sovereign rating due to our

• perational concentration in SA

▪ Moody’s National Scale rating AAA.za & Global Scale rating is Baa3 ▪ Negative outlook due to negative

• utlook on sovereign rating

Group LTV – 35.0% vs 33.7% at FY16

▪ Increased due to funding of investment activities mainly by way of debt in both RSA and GOZ ▪ RSA LTV – 33.4% vs. 30.5% at FY16

• Further investment in GOZ
• Acquisition of assets for the Healthcare Fund
• GWI investment

▪ GOZ LTV – 39.4% vs. 42.0% at FY16

• GMF transaction initially increased the LTV which has subsequently been decreased through asset sales

▪ Group Interest Cover Ratio increased to 3.5x from 3.3x

23

FY17 FY16

Unutilised committed facilities (Rbn) 4.5 5.9 Weighted average term of liabilities (years) 3.0 3.0 Weighted average term of fixed interest rate profile (years) (Incl. AUD & EUR CCIRS and IRS) 3.9 3.4 Weighted average interest rate (%) 9.2 9.3 Weighted average interest rate (%) (Incl. AUD & EUR CCIRS and EUR debt) 7.4 8.5 % debt at fixed interest rate 85.6 86.6 Unencumbered assets (incl. V&A Waterfront and listed investments) (Rbn) 44.2 37.2 Unsecured debt (Rbn) 12.5 8.1

Exchange rate risk

▪ ZAR has been relatively strong to the AUD and EUR for the majority of FY17 ▪ Only 29% of GOZ dividends were hedged for FY18 at 30 June 2017, subsequently taken advantage of the ZAR weakness and 64% now hedged

RSA facilities

PORTFOLIO UPDATE

Discovery, Sandhurst, Sandton

25

NET PROPERTY INCOME

CONSOLIDATED NET PROPERTY INCOME OVERVIEW

RSA

68.0%

5.7%

25.3%

GOZ V&A Waterfront GWI

1.0%

26.3%

Offshore

Greenfield Industrial Park, Cape Town

• 1. Includes 100% of RSA, 100% of GOZ, 50%of the V&A Waterfront and 26.9% of GWI.

(1)

26

PROPERTY PORTFOLIO (by value)

CONSOLIDATED PORTFOLIO VALUE OVERVIEW

RSA

62.9%

7.1%

26.6%

GOZ V&A Waterfront

3.4%

GWI

30.0%

Offshore

Eastgate, Sandton

• 1. Includes 100% of RSA, 100% of GOZ, 50%of the V&A Waterfront and 26.9% of GWI.

(1)

PORTFOLIO UPDATE

SOUTH AFRICA

Key West, Krugersdorp

28

SOUTH AFRICA

Retail

▪ NPI still showing growth based on the successful renewal of existing leases ▪ Renewal success rates deteriorated and renewal growth remains under pressure, both as a result of new competition, which continues to cannibalise trading densities in a weak macro economic environment, with a very constrained consumer ▪ Most of our top 16 shopping centres have faced or will face competition ▪ 1.3% portfolio average trading density growth, weighted by GLA ▪ Vacancies are ticking up as tenants consolidate and reduce space. We expect vacancies to peak in HY18 and settle thereafter at current levels ▪ 2.1% core vacancy vs. 2.0% FY16 ▪ International retailers are not a natural “plug in” ▪ Arrears as a % of collectables improved slightly from 9.7% to 9.3% ▪ We need to keep our centres relevant and as part of our ongoing strategy to improve our offering, we are giving Lakeside and Festival Mall a facelift and we are reconfiguring the food courts at Kolonnade and Waterfall Mall ▪ Long term strategy to consolidate and hold larger centres in the major urban areas

FY17 Net property income (Rm) 2 307  Vacancy (%) 3.6  In force leases Average gross rental (per m²/month) (R) 176  Average in force escalations (%) 7.2  Weighted average lease period (years) 3.3  Renewals Total letting success rate (%) 81.4  Renewal success rate (%) 80.9  Weighted average renewal growth (%) 3.2  Weighted average future escalations on renewals (%) 7.3  Arrears Arrears (Rm) 35.2  Provision for bad debts (Rm) 12.5  Bad Debts (I/S) (Rm) 5.0 

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FY17 Net property income (Rm) 2 813  Vacancy (%) 6.8  In force leases Average gross rental (per m²/month) (R) 155  Average in force escalations (%) 8.1 − Weighted average lease period (years) 3.8  Renewals Total letting success rate (%) 77.4  Renewal success rate (%) 61.4 − Weighted average renewal growth (%) (1.8)  Weighted average future escalations on renewals (%) 8.2 − Arrears Arrears (Rm) 12.8  Provision for bad debts (Rm) 5.2  Bad Debts (I/S) (Rm) 3.5 

Office

▪ Economic drivers are indicative of a sector under pressure ▪ Supply generally continues to exceed demand with consolidation remaining a key theme ▪ Higher incentives and lower rental levels still the order of the day to attract and retain tenants ▪ Renewal growth rates still negative but improved from -3.5% ▪ Growthpoint vacancies are well contained and are below the MSCI

• ffice benchmark which is testament to our quality portfolio and

staff efforts ▪ Arrears as a % of collectables improved slightly from 3.7% to 3.3% ▪ Demand is for new P grade green buildings ▪ 76 Office buildings valued at R13bn green star rated by the Green Building Council of South Africa (GBCSA) ▪ Discovery completion in sight with income positively impacting the second half of FY18 ▪ Earthworks at 144 Oxford Road in Rosebank commenced ▪ Asset management strategy is very important; need to buy correctly, do the right developments and dispose of non-core properties

30

FY17 Net property income (Rm) 1 058  Vacancy (%) 3.1  In force leases Average gross rental (per m²/month) (R) 50.0  Average in force escalations (%) 8.3  Weighted average lease period (years) 3.1 − Renewals Total letting success rate (%) 91.5  Renewal success rate (%) 78.5  Weighted average renewal growth (%) 2.3  Weighted average future escalations on renewals (%) 8.1  Arrears Arrears (Rm) 12.4  Provision for bad debts (B/S) (Rm) 8.4  Bad Debts (I/S) (Rm) 4.7 

Industrial

▪ The industrial asset class has come into its own, it has performed well and is proving to be resilient and in favour , albeit that it is costing us to attract and retain tenants ▪ Users are getting more sophisticated which is creating demand for modern logistics facilities which is feeding the development pipeline and the emergence of the asset class ▪ The renewal success rate is much improved from 63.5% to 78.5% with growth in rentals on renewal from 0.5% to 2.3% ▪ Vacancies are significantly improved from 6.0% with the Paul Smit Anderbolt property being the only large vacancy remaining ▪ The portfolio is diverse with an emphasis on warehousing and distribution and a reduction in the manufacturing component ▪ Emergence of online retail in SA is real with many tenants playing in this space ▪ Durban and Cape Town, with their access to the ports and limited supply of land, are performing well with vacancies virtually non existent and with real demand and growth ▪ Owning land is critical and we continue to “convert the dirt” with the majority of developments pre-let ▪ The environment will, no doubt, get tougher but the portfolio is well positioned with conservative rentals and values and as such we expect to continue to extract value ▪ Arrears as a % of collectables improved slightly from 6.8% to 6.5%

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Sustainability focus across all 3 sectors

▪ Total of 234 kilolitres of water saved in FY17 ▪ 8 338.7 kWp installed solar capacity ▪ Via our innovative Green Leases we have shared more than R40m in utilities cost savings, 50/50 with our clients since August 2013 ▪ Greenovate Awards launched in 2015 which introduces university students to green building thinking and recognises excellence in application ▪ In the process of submitting our commitment to Scientific Based Targets for carbon emissions ▪ Continued focus on waste data gathering and piloting of a waste to compost project

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FY17 Rm FY16(1) Rm INCREASE/ DECREASE

Gross property revenue 8 079 7 589 6.5% Retail 3 099 2 953 4.9% Office 3 632 3 362 8.0% Industrial 1 348 1 274 5.8% Property expenses (1 901) (1 864) 2.0% Retail (792) (814) (2.7%) Office (819) (790) 3.7% Industrial (290) (260) 11.5% Net property income 6 178 5 725 7.9% Adjustments (1 143) (897) Acquisitions and developments (662) (431) Trading Profit and Development Fees (91)

• Disposals

(126) (211) Investec rent (264) (255) Adjusted “like-for-like” net property income 5 035 4 828 4.3% Retail 1 937 1 810 7.0% Office 2 174 2 112 2.9% Industrial 924 906 2.0%

NET PROPERTY INCOME ANALYSIS

• 1. From 1 July 2016, Growthpoint Business Park was reclassified from an office building to an industrial building. The comparatives have been restated to reflect this adjustment.

PORTFOLIO UPDATE

V&A WATERFRONT

V&A Waterfront, Cape Town

34

V&A WATERFRONT

Highlights

Silo & Canal Districts ▪ c. 100 000m² of mixed use space committed and let in Silo District ▪ P grade office offering includes blue chip tenants such as PwC, EY , Werksmans and British American Tobacco ▪ The Silo Hotel above the museum opened on time ▪ No 3 Silo residential units sold at an average price of R83 000/m² with one penthouse remaining of the 79 units Marine ▪ Cruise terminal improved passenger processing with the turnaround of 68 000 passengers and 41 vessels Workshop17 ▪ Continued expansion of Workshop17 with 350 members and 85 businesses Sustainability ▪ Leading in the sustainability space:

• 6 Star green rating for No 5 Silo building
• 16% of total energy consumption (kWh) saved since 2008
• Solar panels generated 1.58 MWh energy in 2016
• 25% reduction in water consumption since 2010
• 42% of total waste collected in 2016 was diverted from landfill
• First district cooling plant in South Africa utilising sea water

35

Property fundamentals

▪ Strong demand for office and retail space continues ▪ Vacancies across sectors remain very low

• Office 0.8%
• Retail 0.0%
• Residential 8.0%

▪ Tenants electing to stay at the V&A - growth in tenant retention from 82.3% FY16 with strong renewal growth ▪ Stabilised residential portfolio of 259 units ▪ Footfall of 24m visitors ▪ Retail sales growth of 3% and trading density growth of 2%, both coming off a high base, with international tourists up 35% year on year , but with a reduction in spending power impacted by a stronger rand ▪ The V&A hotels trade on average 63% higher in revenue per available room than the Cape Town city hotels across the 3 star to 5 star market

FY17 Net property income 522  Vacancy (%) 0.8  In force leases Average gross rental (per m²/month) (R) 231.1  Average in force escalations (%) 8.0 − Weighted average lease period (years) 8.0 − Renewals Total letting success rate (%) 98.3  Renewal success rate (%) 98.2  Weighted average renewal growth (%) 7.9  Weighted average future escalations on renewals (%) 7.9  Arrears Arrears (Rm) 35.5  Provision for bad debts (B/S) (Rm) 5.6  Bad Debts (I/S) (Rm) 2.7 

36

Development activity

Silo Precinct ▪ Zeitz MOCAA officially opening 22 September 2017 ▪ 250 room Radisson Red hotel opens in September 2017 Canal Precinct ▪ c. 120 000 m² Canal District development includes:

• The Battery Park, 1 200 bay parkade with 3 acres of public

green space with expected completion early 2018

• Dock Road Junction with smaller office and retail pockets

creating strong leisure and street culture due for completion in 2018

• c. 90 000 m² earmarked for further office, residential for sale

and to let, as well as other uses

Cruise terminal ▪ The second phase of the cruise terminal development includes extended office & retail space Masterplan update ▪ The Granger Bay District masterplan submitted to The City for approval includes application for land reclamation and further enhancement of the protection

• f the coast

▪ Awaiting the City adjudication on the Foreshore Freeway Project

PORTFOLIO UPDATE

GOZ

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

38

GOZ

▪ A year of growth in assets, profit and shareholder returns ▪ 4.9% increase in dividend per share to 21.5 cps ▪ 6.3% total shareholder return vs. -5.6% S&P/ASX 300 A-REIT index ▪ 10.3% increase in net tangible asset per share to AUD2.88

Property fundamentals

▪ Further cap rate compression driven by limited supply, strong demand and low interest rates, all coupled with global money seeking investment opportunities in the direct property market ▪ Significant disparity in economic outcomes by State - growth centred on Australia's Eastern seaboard (89% of GOZ portfolio) ▪ 94 921m² of space let (c. 9% of portfolio) ▪ 99% occupancy with low upcoming lease expiries

Shareholder Return

39

Capital management

▪ Gearing reduced to 39.0% from 43.1% at FY16 following strategic asset sales ▪ Good access to funding remains: AUD208m raised in March 2017 via the US Private Placement (USPP) market. The issue was more than 4x oversubscribed with an average interest rate of 5.34% and a tenor of 10.8 years, extending GOZ’s debt maturity profile to 5 years ▪ All in cost of debt slightly higher at 4.3%

• vs. 4.1% at FY16

▪ 75% of debt fixed vs. 65% at FY16 with a weighted average fixed debt maturity of 6.4 years ▪ AUD1.3bn drawn debt ▪ AUD245.7m new equity issued

• AUD139.8 (GMF acquisition)
• AUD105.9 (DRIP)

Guidance

▪ Guidance for FY18 dividend growth of 2.3% to 22.0 cps

PORTFOLIO UPDATE

GLOBALWORTH

Globalworth Tower, Bucharest, Romania

41

Transaction

▪ Acquired 24.3m shares for EUR186.4m ▪ Funded by EUR100m loans and EUR86.4m CCIRS ▪ 4.2 years weighted average term of debt ▪ EUR base interest rates are fixed for a weighted average term of 9.9 years ▪ Transaction funded at a weighted average interest rate

• f 2.62%

▪ Initial acquisition yield of 6% expected to grow significantly

• ver the next 3 - 5 years based on the following:
• Filling of vacancies, from 20% on acquisition, to 8% where

they are expected to stabilise

• Accretive c. EUR100m development pipeline at yields of

7% to 9%

• Refinancing of c. EUR400m of existing debt, through

EUR550m Eurobond, from 5% to 3% with a BB+ rating from S&P and Ba2 rating from Moody’s

• Capital injection and surplus debt proceeds to fund

acquisitions of stabilised assets at yields of 7% to 8% in Romania and the broader CEE region

GWI

42

Portfolio Activity

▪ Completed 3 acquisitions

• 57 000m² development property for Groupe Renault

Romania headquarters

• 16 300m² Building C Green Court let to global

corporates including General Motors, ABB and Merck

• 68 000m² Dacia (Renault Group) Distribution facility

▪ Concluded significant leasing with global corporates ▪ New developments are on track and management has been able to secure pre-leases

Surpassed Growthpoint’s due diligence expectations and delivered on distribution guidance

▪ Delivered EUR0.22 dividend per share ▪ EUR0.22 dividend per share expected for HY18

PROPERTY INVESTMENT & DEVELOPMENT

Brooklyn Mall, Brooklyn, Pretoria

44

PROPERTY INVESTMENT & DEVELOPMENT

Disposals

South Africa R1.9bn V&A Waterfront (50%)

• GOZ

R5.0bn

Acquisitions

South Africa R2.0bn V&A Waterfront (50%) R113.0m GOZ R1.7bn

Development & capex

South Africa R2.1bn V&A Waterfront (50%) R557m GOZ R473m Trading Profits & Development Fees R91m

Commitments

South Africa R3.1bn V&A Waterfront (50%) R220m GOZ R151m

CONCLUSION

Deloitte, La Lucia Ridge, Durban

46

PROSPECTS

South Africa

▪ Weakening property fundamentals ▪ Economic growth prospects insufficient to repair lacklustre property fundamentals ▪ Potential debt downgrade ▪ Impact of competition in the retail portfolio ▪ Continued pressure on the office portfolio ▪ Increased cost of retaining tenants and attracting new ones ▪ Continue to look for opportunities to grow internationally ▪ Capital raise for Africa Fund has yielded mixed results with the first close targeted for Q4 2017 ▪ Capital raise for the Healthcare Fund to commence Q4 2017 with institutional investment expected H1 2018 ▪ Exploring the optimum mechanism to dispose c. 5%

• f the RSA portfolio

V&A Waterfront

▪ Healthy and strong core market supplemented by tourism; as such we expect good growth and demand with retail tempered by a strong ZAR ▪ c. 120 000m² bulk remaining with a good development pipeline and exploring ways to acquire additional bulk

47

GOZ

▪ Continue to pursue opportunities for growth in the

• ffice segment in Sydney and Melbourne as a result of

declining vacancies, growing population, significant infrastructure spending and Gross State GDP growth in NSW and Victoria ▪ Deterioration in Western Australia property fundamentals is creating opportunities ▪ Offshore demand is creating opportunities for further asset sales ▪ Considering further M&A opportunities ▪ Taking advantage of development opportunities ▪ Dividend withholding tax expected to be higher ▪ Recent ZAR weakness will be beneficial should it persist

GWI

▪ Romania is performing well with the highest European GDP growth rate, which is expected to grow at +6% for 2017 ▪ Strong demand from global corporates for

• ffice space

▪ EU funding of EUR43bn approved for 2014-2020 and expected to flow into the country ▪ Romanian cap rates higher than other prime markets in CEE but expect further cap rate compression as the property market continues to evolve ▪ Exploring opportunities in the CEE region for both

• ffice and industrial asset acquisitions

48

▪ Dividend growth for FY18 should be similar to that achieved for FY17

Dividend guidance

THANK YOU

Hilltop Industrial Park, Elandsfontein

ANNEXURES

Growthpoint Industrial Estate, Meadowdale, Germiston

51

ANNEXURE CONTENTS

02 03 04 05 06 07 08 01 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 Wealth created and distributed to stakeholders Shares issued and beneficial shareholders holding > 2% at FY17 Key performance indicators RSA Portfolio overview RSA (excl. V&A) Split of RSA property portfolio Acquisitions RSA 10 11 12 13 14 15 09 16 Disposals RSA

52

ANNEXURE CONTENTS

17 18 19 20 21 22 23 25 26 27 28 29 30 31 24 Developments & capital expenditure RSA Commitments RSA Non-current assets held for sale RSA Retail overview RSA Office overview RSA Industrial overview RSA GLA & vacancy reconciliation RSA V&A Waterfront portfolio overview (50%) Split of V&A Waterfront property portfolio Developments & commitments V&A Waterfront (50%) Net property & distributable income analysis V&A Waterfront (50%) V&A Waterfront overview GLA & vacancy reconciliation V&A Waterfront (50%) Key performance indicators V&A Waterfront Key performance indicators GOZ 32 GOZ portfolio overview

53

ANNEXURE CONTENTS

33 34 35 36 37 38 Split of GOZ property portfolio Acquisitions & disposals GOZ Developments, commitments & non-current assets held for sale GOZ Net property income analysis GOZ GOZ overview GLA & vacancy reconciliation GOZ

54

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

Number of properties 56 182 233 471 57 1 GLA (m²) 1 405 021 1 750 606 2 266 957 5 422 584 1 053 148 223 016 Vacancy (m²) 50 246 119 334 70 954 240 534 7 888 1 734 Vacancy (%) 3.6 6.8 3.1 4.4 1.3 0.8 Valuation (Rm) 29 588 34 732 12 586 76 906 32 536 8 705 Value per m² (excl. bulk) 21 036 18 454 5 068 13 529 30 894 36 810 Average gross rental (per m²/month) (R) 176 155 50 117 AUD237 (2) 231 Avrage annualised yield (%) 7.6 8.4 8.7 7.9 6.9 7.8 Average in force escalations (%) 7.2 8.1 8.3 7.8 3.3 8.0 Weighted average lease period (years) 3.3 3.8 3.1 3.6 6.1 8.0 Renewal success rate (%) 80.9 61.4 78.5 73.6 81.4 98.2 Weighted average renewal lease period (years) 4.3 3.4 2.9 3.3 3.3 3.0 Weighted average renewal growth (%) 3.2 (1.8) 2.3 1.0 (7.7) 7.9 Weighted average future escalations on renewals (%) 7.3 8.2 8.1 7.8 3.3 7.9 Total letting success rate (%) 81.4 77.4 91.5 85.3 85.2 98.3

ANNEXURE 01: PORTFOLIO OVERVIEW

• 1. V&A Waterfront is included reflecting Growthpoint's 50% interest, GOZ is reflected at 100%.
• 2. Based on net rental per annum.
• 3. Measurements and ratios are based on income and not GLA (when compared to RSA).

55

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

Opening balance – 1 July 2016(²) 29 210 32 655 11 887 73 752 30 938 104 690 7 766 Purchase price of acquisitions 15,34

• 1 756

116 1 872 5 047 6 919

• Selling price of disposals

16,34 (607) (1 131) (223) (1 961) (1 730) (3 691) (113) (3) Developments and capex 17,27,35 504 1 160 473 2 137 473 2 610 557 Fair value adjustment 481 292 333 1 106 848 1 954 495 Foreign currency translation

• (3 040)

(3 040)

• Total

29 588 34 732 12 586 76 906 32 536 109 442 8 705 Long-term property assets 29 415 34 732 12 557 76 704 31 497 108 201 8 705 Classified as held for sale 19,35 173

• 29

202 1 039 1 241

• Commitments

18,27,35 962 1 905 195 3 063 151 3 213 220

ANNEXURE 02: PROPERTY INVESTMENT ACTIVITIES

• 1. V&A Waterfront is included reflecting Growthpoint's 50% interest, GOZ is reflected at 100%.
• 2. From 1 July 2016, Growthpoint Business Park was reclassified from an office building to an industrial building. The comparatives have been restated to reflect this adjustment.
• 3. Disposal relates to the sale of 50% of the portion of Waterway House that is occupied by BAT, to Atterbury.

56

24.0% 24.5% 23.5% 3.8% 2.7% 3.6%

FY15 FY16 FY17

Operating Expense Ratio Property Expense Ratio 11.6% 12.0% 13.0% 4.4% 4.8% 4.8%

FY15 FY16 FY17

Operating Expense Ratio Property Expense Ratio

SOUTH AFRICA GOZ

27.8% 27.7% 28.1% 2.9% 3.1% 3.3%

FY15 FY16 FY17

Operating Expense Ratio Property Expense Ratio

V&A WATERFRONT

ANNEXURE 03: EXPENSE TO INCOME RATIOS (IFRS)

27.2% 27.8% 27.1% 30.8% 30.7% 31.4% 16.8% 16.0% 17.8%

57

35.0% 36.2% 35.0% 3.2% 2.3% 3.0%

FY15 FY16 FY17

Operating Expense Ratio Property Expense Ratio 12.6% 13.0% 13.9% 4.3% 4.7% 4.8%

FY15 FY16 FY17

Operating Expense Ratio Property Expense Ratio

SOUTH AFRICA GOZ

33.2% 34.0% 35.6% 2.7% 2.9% 3.0%

FY15 FY16 FY17

Operating Expense Ratio Property Expense Ratio

V&A WATERFRONT

ANNEXURE 04: EXPENSE TO INCOME RATIOS (GROSS)*

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

38.5% 38.2% 38.0% 36.9% 35.9% 38.5% 17.7% 16.9% 18.7%

58

15 852 14 880 15 276 2 053 1 803 1 540 4 480 4 286 5 248 2 659 3 284 6 824 400 400 400

FY15 FY16 FY17

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

(1)

ANNEXURE 05: RSA DIVERSIFIED BORROWINGS — NOMINAL VALUE

Debt capital market 14.9% Traditional bank debt 85.1% Unsecured 32.3% Secured 67.7% Debt capital market 12.0% Traditional bank debt 88.0% Unsecured 29.6% Secured 70.4% Debt capital market 24.7% Traditional bank debt 75.3% Unsecured 42.6% Secured 57.4%

R24 653m R25 444m R29 288m

(1)

• 1. The total value excludes the deferred payments of R85m (FY16: R165m) on the Samrand land purchased. The outstanding payment is due in Sept 2017.

59

32.1% 30.5% 33.4%

1 2 3 4 5 6 7

FY15 FY16 FY17 LTV Interest cover ratio (incl V&A)

33.2% 33.7% 35.0%

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

FY15 FY16 FY17 LTV Interest cover ratio

SOUTH AFRICA GROUP

36.8% 42.0% 39.4%

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

FY15 FY16 FY17 LTV Interest cover ratio

GOZ(2)

ANNEXURE 06: LOAN TO VALUE AND INTEREST COVER RATIOS

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

• 1. Nominal value of interest-bearing borrowings (net of cash), divided by the fair value of property assets, including investment property held for sale. For RSA and group the 50% equity investment in V&A Waterfront and
• ther equity-accounted and listed investments were included in the fair value of property assets.
• 2. Calculated in Rands.

(1) (1) (1)

60

ANNEXURE 07: LOAN EXPOSURE PER FINANCIER RSA

21% 25% 22% 17%

5%

5%

2% 2%

1%

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

61

0% 5% 10% 15% 20% 25% FY18 FY19 FY20 FY21 FY22 FY23 FY24 ABSA China Construction Investec JSE (Corporate Bonds) LibFin Nedbank Omsfin RMB Standard Bank

ANNEXURE 08: DEBT EXPIRY PROFILE PER FINANCIER RSA

15% 18% 23% 16% 16% 3% 9%

62

0% 5% 10% 15% 20% 25% Floating FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29

ANNEXURE 09: FIXED INTEREST RATE EXPIRY PROFILE RSA

14% 9% 11% 17% 3% 6% 3% 0% 3% 9% 21% 2% 2%

63

463 625 669 4 232 5 072 5 600 329 450 471 2 215 2 710 2 922 747 941 1 016 74 418 164 1 500 3 000 4 500 6 000 7 500 9 000 10 500 12 000 FY15 FY16 FY17 Employees Shareholders Minority interest holders Providers of debt Governments - direct taxes Reinvested in the group

ANNEXURE 10: WEALTH CREATED & DISTRIBUTED TO STAKEHOLDERS*

R10 216m R8 060m R10 842m

Rm

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

9.3% 27.5% 4.1% 52.5% 5.7% 0.9% 9.2% 26.5% 4.4% 49.7% 6.1% 4.1% 9.4% 27.0% 4.3% 51.6% 6.2% 1.5%

64

SHARES

Opening balance 1 July 2016 2 786 093 366 Dividend reinvestment (September 2016) 44 023 040 Dividend reinvestment (March 2017) 58 346 176 Closing balance 30 June 2017 2 888 462 582 Treasury shares held for staff share scheme (27 759 987) Shares in issue (net of treasury shares) 2 860 702 595

% HOLDING SHARES HELD

Government Employees Pension Fund 13.3 384 361 494 Stanlib Asset Management Ltd 6.1 176 177 821 Southern Palace Properties Pty Ltd 5.6 160 942 921 Investec Asset Management (Pty) Ltd 5.1 147 899 510 Old Mutual Group 4.3 123 103 328 Prudential Portfolio Managers 4.0 116 699 191 The Vanguard Group 3.8 108 984 712 Sesfikile Capital 2.8 81 885 120 Coronation Fund Managers Ltd 2.7 78 417 247 BEE Consortium 2.7 77 666 667 Momentum Asset Management 2.6 75 906 033 Sanlam Investment Management 2.6 74 222 230 Meago Asset Managers 2.6 73 825 229 Blackrock Institutional Trust Company 2.0 58 985 663 Total shareholders holding >2% 60.2 1 739 077 166 Other 39.8 1 149 385 416 Total 100.0 2 888 462 582 Foreign shareholding: 28% of institutional ownership and 22% of total shares issued

ANNEXURE 11:

SHARES ISSUED & BENEFICIAL SHAREHOLDERS HOLDING >2% AT FY17

65

FY17 FY16

Vacancies (%) 4.4 5.7 Total arrears (Rm) 60.4 64.3 Provision for bad debts (B/S) (Rm) 26.1 29.8 Bad debts (I/S) (Rm) 13.2 15.9 Average in force escalations (%) 7.8 7.8 Renewal success rate (%) 73.6 68.7 Total letting success rate (%) 85.3 82.4 Weighted average renewal growth (%) 1.0 1.1 Weighted average future escalations on renewals (%) 7.8 7.8 Number of employees 630 657 Net property income per employee (R) 9 806 349 8 713 851

ANNEXURE 12: KEY PERFORMANCE INDICATORS RSA

The Towers, Sandton

66

FY15 FY16 FY17 Retail Office Industrial 19.9% 47.3% 32.8% 17.2% 45.5% 37.3% 16.6% 46.0% 37.4% FY15 FY16 FY17 Retail Office Industrial 14.6% 46.0% 39.4% 16.4% 45.2% 38.4% 15.3% 45.1% 39.6%

NET PROPERTY INCOME PROPERTY PORTFOLIO VALUE

FY15 FY16 FY17 Retail Office Industrial 48.6% 39.1% 49.5% 38.6% 11.9% 48.6% 39.0% 12.4%

NUMBER OF PROPERTIES

ANNEXURE 13: PORTFOLIO OVERVIEW RSA (EXCL.V&A)

R4 479m R5 725m R6 178m 471 467 471 R71 550m R73 752m R76 906m

12.3%

67

ANNEXURE 14: SPLIT OF RSA PROPERTY PORTFOLIO

45% 39% 16%

VALUE VALUE GLA GLA

32% 26% 42% 54% 22% 10% 7%

4%

2% 1%

58% 21% 11% 5%

3%

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

68

SECTOR DATE PURCHASE PRICE Rm YIELD

Acquisitions Gateway Private Hospital, Umhlanga Ridge, Durban Healthcare Fund(1) November 2016 559.2 9.5% Hillcrest Private Hospital, Assagay, Durban Healthcare Fund(1) November 2016 550.4 9.5% Louis Leipoldt Hospital, Bellville, Cape Town Healthcare Fund(1) February 2017 385.5 8.3% Site B, Foreshore, Cape Town Office March 2017 88.7 Land Remaining 50% of 144 Oxford Road, Rosebank Office March 2017 69.7 Land Ncondo Place, Umhlanga Ridge, Durban Office March 2017 44.2 Land Draper on Main, Claremont, Cape Town Office August 2016 25.8 9.1% 31 Impala Road, Chislehurston, Sandton Office December 2016 20.3 5.5% 29 Richefont, Umhlanga Ridge, Durban Office September 2016 12.5 Land 28 Sacks Circle, Bellville, Cape Town Industrial May 2017 104.2 9.6% Remaining 30% of Wadeville, Germiston Industrial July 2016 12.2 Land Total 1 872.7

ANNEXURE 15: ACQUISITIONS RSA

1. Properties acquired for Healthcare Fund and currently included in the office portfolio.

69

SECTOR DATE SELLING PRICE Rm PROFIT/(LOSS) ON COST Rm PROFIT/(LOSS) ON BOOK VALUE Rm YIELD Disposals Picbel Parkade, CBD, Cape Town Retail March 2017 271.3 160.4 (0.4) 10.1% Vaal Mall - 11.19%, Vanderbijlpark Retail April 2017 197.6 (1.0) (0.5) 7.4% Grayston Shopping Centre, Kramerville, Sandton Retail May 2017 138.0 47.6 9.5 7.9% Harrowdene Office Park, Woodmead, Johannesburg Office March 2017 845.9 21.4 (27.7) 2.7% 16 Fricker Road, Illovo, Sandton Office May 2017 71.9 1.2 8.4 3.3% 61 Central, Houghton, Johannesburg Office February 2017 64.5 35.2 5.2 7.3% Thebe House, Rosebank, Johannesburg Office June 2017 52.0 39.4 1.6 10.3% Bremerton Office Park, Newton Park, Port Elizabeth Office December 2016 51.0 (4.6) (3.0) 9.8% 295 Florida Road, Morningside, Durban Office November 2016 34.5 13.1 4.4 8.4% Woodstock, Woodstock, Cape Town Office October 2016 10.7 2.1 2.9 9.0% Redwood, Roodekop, Alberton Industrial December 2016 78.5 41.8 20.9 7.3% Kya Sands, Kya Sands, Randburg Industrial April 2017 45.8 11.9 (0.3) 9.4% Laser Isipingo, Isipingo, Durban Industrial November 2016 44.0 24.1 2.4 9.5% Osram, Randjiespark, Midrand Industrial August 2016 28.0 9.7 4.2 10.0% Metro Cash & Carry Krugersdorp, Krugersdorp Industrial December 2016 12.4 (1.7) (0.2) 5.3% Snowy Owl, Arcadia, Pretoria Industrial January 2017 7.6 (3.1)

• 11.4%

Erf 321 Wadeville, Wadeville, Germiston Industrial March2017 3.7 1.8 1.6 10.7% Portland, Wadeville, Germiston Industrial June 2017 2.8 1.8 0.1 8.5% Total 1 960.2 401.1 29.1

ANNEXURE 16: DISPOSALS RSA

70

SECTOR ESTIMATED COMPLETION DATE FY17 Rm Developments and Capital Expenditure(1) Greenacres, Greenacres, Port Elizabeth Retail July 2017 140.5 Vaal Mall (66.6%), Vanderbijlpark, Johannesburg Retail December 2016 90.0 Hillcrest Corner (50%), Hillcrest, Durban Retail June 2017 49.4 KeyWest Shopping Centre, Krugersdorp, Johannesburg Retail November 2016 30.3 Other, below R30m Retail 193.8 Total Retail 504.0 Discovery Head Office (55%), Sandhurst, Sandton Office November 2017 669.2 Lakeside 1, Centurion, Pretoria Office April 2019 46.8 Anslow Phase 2, Bryanston, Sandton Office July 2016 39.7 Other, below R30m Office 404.3 Total Office 1 160.0 Samrand Development, Midrand Industrial July 2017 75.5 M1 Place, Eastgate, Sandton Industrial November 2016 61.5 Growthpoint Industrial Estate, Erf 307, Meadowdale, Germiston Industrial Dec 2016 48.6 Saligna, Boksburg Industrial July 2017 45.6 Montague Business Park (25%), Montague Gardens, Cape Town Industrial 39.0 Other, below R30m Industrial 202.8 Total Industrial 473.0 Total 2 137.0 Development Expenditure 1 451.0 Capital Expenditure 686.0

ANNEXURE 17: DEVELOPMENTS & CAPITAL EXPENDITURE RSA

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

71

Commitments SECTOR ESTIMATED COMPLETION DATE FY17 Rm Developments(1) 2 051.0 River Square Shopping Centre, Three Rivers, Vereeniging Retail November 2017 46.9 144 Oxford Road, Rosebank Office October 2019 647.1 Exxaro Head Office and AECOM, Centurion Office May 2019 488.6 Discovery Head Office (55%), Sandhurst, Sandton Office April 2018 399.0 Draper on Main, Cape Town Office March 2019 119.2 Boulevard, Umhlanga Ridge, Umhlanga Rocks, Durban Office April 2018 76.4 32 on Kloof, Cape Town Office June 2018 45.1 Bakers Transport, Samrand, Midrand Industrial February 2018 77.5 Fast & Furious, Growthpoint Industrial Estate, Meadowdale, Germiston Industrial January 2018 56.4 Other below R30,0m Various Various 94.8 Acquisitions 1 011.6 Remaining 58% of N1 City Mall Goodwood, Cape Town Retail November 2017 881.6 Exxaro Corporate Centre & Vacant land, Pretoria (2) Office 130.0 Total 3 062.6

ANNEXURE 18: COMMITMENTS RSA

• 1. The average yield for developments is 8.0% - 9.0% on a fully let basis.
• 2. Property acquired for Trading and Development purposes. The transaction is subject to Competition Commission approval and as such estimated completion date is unknown.

72

SECTOR FY17 Rm Properties Held For Sale OK Empangeni, Empangeni, Durban Retail 172.5 Whitworth, Heriotdale ext 8, Johannesburg Industrial 16.0 Greenhills Centre, Elandsfontein, Germiston Industrial 13.4 Total RSA 201.9

ANNEXURE 19: NON-CURRENT ASSETS HELD FOR SALE RSA

73

TOP 10 PROPERTIES BY VALUE FAIR VALUE Rm GLA m²

Brooklyn Mall and Design Square (75%), Brooklyn, Pretoria 2 247 55 968 Festival Mall, Kempton Park, Johannesburg 1 610 83 387 Geenacres, Greenacres, Port Elizabeth 1 514 46 968 Waterfall Mall, Rustenburg 1 490 49 234 Lakeside Mall, Benoni, Johannesburg 1 447 65 364 Vaal Mall (66.6%), Vanderbijlpark, Johannesburg 1 272 44 172 La Lucia Mall, La Lucia, Durban 1 247 37 296 Kolonnade (50%), Montana Park, Pretoria 1 184 38 100 Bayside Mall, Table View, Cape Town 1 125 45 216 The Constantia Village, Constantia, Cape Town 1 088 20 391 Sub Total 14 224 486 096 Balance of the sector 15 364 918 925 Total for the sector 29 588 1 405 021

TOP 10 TENANTS GLA(1) m²

Edcon Holdings Ltd 124 097 The Foschini Group Ltd 57 321 Shoprite Holdings Ltd 139 060 Pepkor Holdings Ltd 56 896 Pick n Pay Stores Ltd 118 256 Mr Price Group Ltd 55 780 Truworths International Ltd 32 688 Massmart Holdings Ltd 66 589 Woolworths Holdings Ltd 87 127 Clicks Group Ltd 28 140 Sub Total 765 954 Balance of the sector 588 821 Total for the sector (excluding vacancies) 1 354 775

14.1 10.1 16.5 18.9 18.2 14.4 4.2 3.6

FY23 and beyond By FY22 By FY21 By FY20 By FY19 By FY18 Monthly Vacant

9.2 10.2 17.2 18.8 21.2 17.1 3.5 2.8

FY23 and beyond By FY22 By FY21 By FY20 By FY19 By FY18 Monthly Vacant

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

ANNEXURE 20: RETAIL OVERVIEW RSA

• 1. Ranked in terms of gross monthly rental.

74

TOP 10 PROPERTIES BY VALUE FAIR VALUE Rm GLA m²

Investec, 100 Grayston Drive, Sandton, Johannesburg 2 204 70 945 The Woodlands, Woodmead, Johannesburg 1 707 124 122 Constantia Office Park, Roodepoort, Johannesburg 1 075 72 834 Inanda Greens, Wierda Valley, Sandton, Johannesburg 971 40 774 The Place, Sandton, Johannesburg 954 34 682 MontClare Place, Claremont, Cape Town 629 29 645 Inyanda 1,3 and 4, Parktown North, Johannesburg 487 23 196 Country Club Estate, Woodmead, Johannesburg 486 33 142 Golf Park, Bellville, Cape Town 460 28 263 The Towers (50%), Sandton, Johannesburg 443 12 913 Sub Total 9 416 470 516 Balance of the sector 25 316 1 280 090 Total for the sector 34 732 1 750 606

TOP 10 TENANTS GLA(1) m²

Investec Bank Ltd 83 781 Deloitte (South Africa) 46 145 Absa Bank Ltd 25 509 Transnet 33 066 Business Connexion (Pty) Ltd 34 454 Anglogold Ashanti Ltd 19 381 EOH Holdings Ltd 33 660 Firstrand Bank Ltd 17 372 Edward Nathan Sonnenbergs Inc 14 889 Nestle South Africa (Pty) Ltd 11 986 Sub Total 320 243 Balance of the sector 1 311 029 Total for the sector (excluding vacancies) 1 631 272

18.8 9.4 12.5 15.8 17.2 17.2 2.3 6.8 FY23 and beyond By FY22 By FY21 By FY20 By FY19 By FY18 Monthly Vacant 24.2 8.5 11.9 16.0 16.4 14.8 2.9 5.3 FY23 and beyond By FY22 By FY21 By FY20 By FY19 By FY18 Monthly Vacant

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

ANNEXURE 21: OFFICE OVERVIEW RSA

• 1. Ranked in terms of gross monthly rental.

75

TOP 10 PROPERTIES BY VALUE FAIR VALUE Rm GLA m²

Growthpoint Business Park, Midrand 644 68 685 Montague Business Park (25%), Montague Gardens, Cape Town 345 30 885 Hilltop Industrial Estate, Elandsfontein, Johannesburg 333 76 283 Isobar, Isando, Kempton Park, Johannesburg 222 47 195 Central Park, Cape Town, Elsiesrivier, Cape Town 205 49 135 Adcock Ingram, Midrand 202 21 536 Omni Park, Aeroton, Johannesburg 190 41 331 Rivonia Crossing 2, Sunninghill, Sandton 187 19 778 N1 Business Park (20%), Midrand 172 21 567 Greenfield Industrial Park, Airport Industrial, Cape Town 160 21 815 Sub Total 2 660 398 210 Balance of the sector 9 926 1 868 747 Total for the sector 12 586 2 266 957

TOP 10 TENANTS GLA(1) m²

The Bidvest Group Ltd 58 590 Adcock Ingram Holdings Ltd 27 280 Scania SA (Pty) Ltd 23 513 Consolidated Steel Industries (Pty) Ltd 55 640 Allied Electronic Corporation Ltd 30 413 Distell Ltd 45 636 Pioneer Foods Ltd 20 122 Barloworld Ltd 18 516 Continuity SA (Pty) Ltd 11 407 DCD Group (Pty) Ltd 77 239 Sub Total 368 356 Balance of the sector 1 827 647 Total for the sector (excluding vacancies) 2 196 003

12.9 12.5 8.1 16.8 22.9 19.1 4.6 3.1 FY23 and beyond By FY22 By FY21 By FY20 By FY19 By FY18 Monthly Vacant 12.8 12.1 9.7 15.1 24.2 19.5 3.8 2.8 FY23 and beyond By FY22 By FY21 By FY20 By FY19 By FY18 Monthly Vacant

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

ANNEXURE 22: INDUSTRIAL OVERVIEW RSA

• 1. Ranked in terms of gross monthly rental.

76

TOTAL GLA m² VACANT AREA m² VACANCY %

Balance as at 1 July 2016 5 471 050 311 559 5.7 GLA adjustments (61 235) (59 776) Disposals (109 364) (2 111) Acquisitions 80 387 495 Developments and extensions 44 168 42 294 Leases expired in the period (1) 1 173 913 Renewals of expired leases (2) (864 234) New letting of vacant space (534 988) Leases terminated 173 826 Balance as at 30 June 2017 5 425 006 240 978 4.4

ANNEXURE 23: GLA & VACANCY RECONCILIATION RSA

• 1. 21.5% of opening balance GLA expired during the half year under review compared to 22.6% for FY16.
• 2. Retention of 73.6% compared to 68.7% for FY16.

77

V&A Waterfront, Cape Town

FY17 FY16

Vacancies (%) 0.8 1.4 Total arrears (Rm) 35.5 28.1 Provision for bad debts (B/S) (Rm) 5.6 8.6 Bad debts (I/S) (Rm) 2.7 1.4 Average in force escalations (%) 8.0 8.0 Renewal success rate (%) 98.2 82.3 Total letting success rate (%) 98.3 90.3 Weighted average renewal growth (%) 7.9 6.0 Weighted average future escalations on renewals (%) 7.9 8.0 Number of employees (100%) 188 186 Net property income per employee (R) 5 553 191 4 967 742

ANNEXURE 24: KEY PERFORMANCE INDICATORS V&A WATERFRONT (50%)

78

51.3% 54.1% 21.6% 18.6% 9.5% 8.9% 17.6% 18.4%

FY15 FY16 FY17

Retail Office Fishing & Industrial Hotel & Residential 49.6% 53.9% 52.6% 50.5% 20.9% 23.8% 24.5% 6.1% 5.8% 6.8% 11.6% 11.4% 12.5% 7.5% 6.4% 5.7%

FY15 FY16 FY17

Retail Office Fishing & Industrial Hotel & Residential Bulk

NET PROPERTY INCOME PROPERTY PORTFOLIO VALUE

ANNEXURE 25: V&A WATERFRONT PORTFOLIO OVERVIEW (50%)

R462m R399m R522m R6 761m R8 705m R7 766m

21.8% 9.6% 19.0%

79

ANNEXURE 26: SPLIT OF V&A WATERFRONT PROPERTY PORTFOLIO

51% 24% 7% 12% 6% 50% 22% 9% 19% 22% 28% 26% 24% 94% 6%

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

Developed Undeveloped Retail Office Fishing & Industrial Hotel & Residential Bulk

80

SECTOR ESTIMATED COMPLETION DATE FY17 Rm

Developments and capital expenditure (1) Waterway House (EY & Ferrari) Office & Retail May 2017 159.6 Grain Silo - Zeitz MOCAA and The Silo Hotel Museum & Hotel September 2017 84.6 Battery Park Parkade April 2018 52.9 No 6 Silo - Radisson Red Hotel Hotel September 2017 117.6 Other below R30m Various Various 142.9 Total 557.6 Commitments Battery Park Parking April 2018 90.6 Dock Road Junction Office September 2018 37.1 Other below R30m Various Various 92.6 Total 220.3

ANNEXURE 27: DEVELOPMENTS & COMMITMENTS V&A WATERFRONT (50%)

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

81

FY17 Rm FY16 Rm INCREASE/ (DECREASE)

Gross property revenue 726 639 13.6% Property expenses (204) (177) 15.3% Net property income 522 462 13.0% Other operating expenses (24) (20) 20.0% Net finance costs (18) (11) 63.6% Other non-distributable amounts (1) (2) (50.0%) Distributable income 479 429 11.7% Adjustments (19)

• Silo No 5 – PwC & Werksmans

(11)

• Waterway House – EY & Ferrari

(8)

• Adjusted “like-for-like” distributable income

460 429 7.3%

ANNEXURE 28: NET PROPERTY & DISTRIBUTABLE INCOME ANALYSIS V&A WATERFRONT (50%)

82

TOP 10 TENANTS (100%) GLA(1) m² Allan Gray (Pty) Ltd 18 520 Nedbank Group Ltd 25 432 Legacy Hotels 16 226 Edcon Holdings Ltd 7 518 Tourvest Holdings Ltd 3 052 Sun International Hotels 17 100 Newmark Hotels 7 564 Woolworths Holdings Ltd 7 682 The Foschini Group Ltd 3 014 National Department of Public Works 17 324 Subtotal 123 432 Balance of V&A 319 132 Total for V&A Waterfront (excluding vacancies) (100%) 442 564 53 11 5 8 10 13 FY23 and beyond By FY22 By FY21 By FY20 By FY19 By FY18 Vacant

LEASE EXPIRY (% OF GLA)

ANNEXURE 29: V&A WATERFRONT OVERVIEW

33 11 6 11 18 21 FY23 and beyond By FY22 By FY21 By FY20 By FY19 By FY18 Vacant

LEASE EXPIRY (% OF GROSS MONTHLY RENTAL)

• 1. Ranked in terms of gross monthly rental.

83

TOTAL GLA m2 VACANT AREA m2 VACANCY %

Balance as at 1 July 2016 206 838 2 993 1.4% GLA adjustments

• Developments and extensions

16 178 15 701 Leases expired in the period (1) 81 187 Renewals of expired leases (2) (79 735) New letting of vacant space (18 694) Leases terminated 282 Balance as at 30 June 2017 223 016 1 734 0.8%

ANNEXURE 30: GLA & VACANCY RECONCILIATION V&A WATERFRONT (50%)

• 1. 39.3% of opening balance GLA expired during the year under review compared to 10.1% for FY16.
• 2. Retention of 98.2% compared to 82.3% for FY16.

84

FY17 FY16

Vacancies (%) (1) 1.3 1.0 Total arrears (Rm) 3.4 4.7 Provision for bad debts (B/S) (Rm)

• Renewal success rate (%)

81.4 96.0 Total letting success rate (%) 85.2 93.3 Weighted average renewal growth (%) (7.7) (0.5) Weighted average future escalations on renewals (%) (2) 3.3 4.0 Number of employees 23 17 Net property income per employee (R) 99 695 652 112 529 412

ANNEXURE 31: 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%.

Green Square Close, Fortitude Valley, QLD, Australia

85

50.6% 48.5% 61.3% 49.4% 51.5% 38.7% 9.55 10.57 10.26 9 9.2 9.4 9.6 9.8 10 10.2 10.4 10.6 10.8

FY15 FY16 FY17 Office Industrial average exchange rate 17 20 26 36 38 31 FY15 FY16 FY17

NET PROPERTY INCOME NUMBER OF PROPERTIES

50.2% 55.9% 66.0% 49.8% 44.1% 34.0% 9.4 11.04 10.04 8.5 9 9.5 10 10.5 11 11.5

FY15 FY16 FY17 Office Industrial closing exchange rate

PROPERTY PORTFOLIO VALUE

ANNEXURE 32: GOZ PORTFOLIO OVERVIEW

R1 913m R1 631m R2 293m 58 53 57 R30 938m R22 024m R32 536m

NUMBER OF PROPERTIES

AUD ZAR AUD ZAR Office Industrial Office Industrial Office Industrial

86

ANNEXURE 33: SPLIT OF GOZ PROPERTY PORTFOLIO

66% 34% 29% 28% 26% 6%

5%

5%

28% 72% 45% 18% 14% 12%

8%

2%1%

VALUE (AUD) VALUE GLA GLA

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

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SECTOR DATE FY17 Rm FY17 AUDm

Acquisitions 15 Green Square Close, Fortitude Valley, Queensland Office October 2016 1 452.2 138.2 3 Murray Rose Avenue, Sydney Olympic Park, New South Wales Office October 2016 1 042.6 99.1 5 Murray Rose Avenue, Sydney Olympic Park, New South Wales Office October 2016 1 034.3 98.4 Vantage, 109 Burwood Road, Hawthorn, Victoria Office October 2016 852.5 81.3 Quad 3, 102 Bennelong Parkway, Sydney Olympic Park, New South Wales Office October 2016 335.1 31.9 Quad 2, 6 Parkview Drive, Sydney Olympic Park, New South Wales Office October 2016 330.2 31.4 Total 5 046.9 480.3

ANNEXURE 34: ACQUISITIONS & DISPOSALS GOZ

Disposals 28 Bilston Drive, Wodonga, Victoria Industrial December 2016 722.4 69.2 99 and 101-103 William Angliss Drive, Laverton North, Victoria Industrial December 2016 289.3 27.7 213-215 Robinsons Road, Ravenhall, Victoria Industrial December 2016 281.3 27.0 365 Fitzgerald Road, Derrimut, Victoria Industrial December 2016 186.2 17.8 670 Mcarthur Avenue, Pinkenba, Queensland Industrial September 2016 107.3 9.9 29 Business Street, Yatala, Queensland Industrial March 2017 96.2 10.3 10 Gassman Drive, Yatala, Queensland Industrial June 2017 47.2 4.5 Total 1 729.9 166.4

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SECTOR ESTMATAED COMPLETION DATE FY17 Rm FY17 AUDm Developments and Capital Expenditure Building C, 211 Wellington Road, Mulgrave, Victoria Office October 2016 318.0 29.5 Other Various 155.0 17.5 Total 473.0 47.0

ANNEXURE 35: DEVELOPMENTS, COMMITMENTS & NON-CURRENT ASSETS HELD FOR SALE GOZ

Commitments 1 Charles Street, Paramatta, New South Wales Office June 2019 60.2 6.0 Other Various 90.3 9.0 Total 150.5 15.0 Non-Current Assets Held For Sale 1231-1241 Sandgate Road, Nundah, Queensland Office 1 038.6 103.5 Total 1 038.6 103.5

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FY17 AUDm FY16 AUDm Increase / (Decrease) Gross property revenue 261.4 208.6 25.3% Property expenses (38.1) (27.5) 38.5% Net property income 223.3 181.1 23.3% Adjustments (65.7) (25.5) Acquisitions and developments (59.5) (12.2) Disposals (6.2) (13.3) Adjusted “like-for-like” net property income 157.6 155.6 1.3% Office 84.9 82.6 2.8% Industrial 72.7 73.0 (0.4%)

ANNEXURE 36: 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 3 046 32 356 70 Distribution Street, Larapinta, QLD Industrial 2 057 76 109 75 Dorcas Street, South Melbourne, VIC Office 1 806 23 811 20 Colquhoun Road, Perth Airport, WA Industrial 1 533 80 374 Optus Centre, 15 Green Square Close, QLD Office 1 385 16 442 333 Ann Street, Brisbane, QLD Office 1 162 16 369 Building C, 219 - 247 Pacific Highway, Artarmon, NSW Office 1 151 14 496 1231-1241 Sandgate Road, Nundah, QLD Office 1 039 12 980 3 Murray Rose Avenue, Sydney Olympic Park, NSW Office 973 13 423 5 Murray Rose Avenue, Sydney Olympic Park, NSW Office 973 12 386 Sub Total 15 125 298 746 Balance of GOZ 17 411 754 402 TOTAL FOR GOZ 32 536 1 053 148

TOP 10 TENANTS GLA(1) m²

Woolworths 350 185 NSW Police Department 32 356 Commonwealth of Australia 24 370 Linfox 58 077 GE Capital Finance Australasia(²) 15 957 Samsung Electronics 13 423 Lion 12 317 Energex 8 754 Australia and New Zealand Banking Group 13 744 Jacobs Group 8 207 Sub Total 537 390 Balance of GOZ 507 870 TOTAL FOR GOZ (excluding vacancies) 1 045 260 54 21 6 11 3 4 1 FY23 and beyond By FY22 By FY21 By FY20 By FY19 By FY18 Vacant

LEASE EXPIRY (% OF INCOME)

ANNEXURE 37: GOZ OVERVIEW

• 1. Ranked in terms of gross monthly rental.
• 2. Leases to Country Road/ David Jones, with a weighted average lease term commencement of 14.5 years, will replace the existing lease to GE Capital Finance Australasia upon the lease expiry.

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TOTAL GLA m2 VACANCY(1) % Balance as at 1 July 2016 1 109 545 1.0 GLA adjustments (477) Disposals (120 963) Acquisitions, developments and extensions 65 043 Balance as at 30 June 2017 1 053 148 1.3

ANNEXURE 38: GLA & VACANCY RECONCILIATION GOZ

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

THANK YOU

Illovo, Umhlanga Ridge, Durban