FY20 results Investor presentation Overview FY20 HIGHLIGHTS - PowerPoint PPT Presentation

FY20 results Investor presentation

Overview

FY20 HIGHLIGHTS Strong financial result underpinned by sound asset and capital management Financial result Property portfolio Capital management Achievements • Successful listing on the ASX • S&P/ASX 300 index inclusion AUD1. 1.32 32 AUD1 UD1 0 085 m millio illion 22. 22.2% 2% • AUD84 million placement NAV per unit portfolio value² gearing² • AUD81 million of acquisitions • Sold 757 Ann Street, 11% 8. 8.88 88 cpu pu 4.5 4. 7.4 ye 7. 4 years above book value year WALE² , ³ WADE 5 distribution¹ • Restructured debt and hedge book resulting in lower 99.0% 99. 0% 3. 3.05% 05% 9. 9.78 78 cpu pu funding cost and increased occupancy² , ³ WADE and WASE FFO¹ funding cost 5 6.57% 6. 57% 9. 9.17 17 cpu pu AUD6 UD67 m millio illion WACR² ,4 undrawn debt 2,5 AFFO¹ 1. Annualised. 2. Includes the impact of the sale of 757 Ann Street, which settled post the reporting date on 1 April 2020. 3. Weighted by gross property income. 4. Weighted by property value. 5. Includes the impact of debt restructuring, which occurred post the reporting date on 3 April 2020. Investec Australia Property Fund | FY20 Results 3

FUND PERFORMANCE IAP has outperformed the broader market IAP ab absolute e per erfo forman ance 1 ce 1-Apr pr-19 to 1 19 to 1-Ma May-20 20 IAP p per erfo forman ance 1 ce 1-Apr pr-19 to 19 to 1-Ma May-20 r 20 relati tive to to S&P/ASX300 A 300 A-REIT/ SAPY SAPY 120% 18.00 1.80 20-Feb-20 peak +106% 1.70 16.00 100% 1.60 14.00 80% 1.50 12.00 1.40 60% 10.00 AUD84 million 1.30 placement and 8.00 40% 1.20 acquisitions 757 Ann Street ASX listing 6.00 sale announced 1.10 20% +14% 4.00 S&P/ASX300 index inclusion 1.00 -% Increased weighting in SAPY 2.00 0.90 0.00 0.80 (20%) Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 ASX trading price outperformance to S&P / ASX 300 A-REIT index ¹ JSE trading price (ZAR, LHS) ASX trading price (AUD, RHS) JSE trading price outperformance to FTSE JSE SA Listed Property (SAPY) Price ch ce chan ange e fr from 20-Fe Feb-20 p 20 peak IAP IA (30. 30.9% 9%) Large cap Australian REITs (41.5%) Mid cap Australian REITs (30.1%) Small cap Australian REITs (33.3%) 1. Excludes GMG and CHC. Investec Australia Property Fund | FY20 Results 4

LIFE POST COVID-19 • Immediate focus is on tenant engagement and bridging the current economic dislocation • Tenants are seeking certainty and regular communication – IAP is seeking to preserve long term sustainability of income • Rigorous valuation process undertaken, but uncertainty remains • Stress testing the portfolio has been critical to understanding the resilience of the Fund going forward • Adjustments post reporting period have been made and are reflected in the fair market value of the Fund’s portfolio • Understanding of new work practices and space utilisation will be important as we transition into a post COVID-19 world • Apolitical government policies and leadership will be needed to navigate a return to the “new normal” Investec Australia Property Fund | FY20 Results 5

STRATEGY Invest in office, industrial and retail properties in major metropolitan cities or established commercial precincts in Australia and New Zealand Focused property fundamentals Active asset management Management team • • • Sustainable revenue stream Active hands-on asset management Specialists in local market • • • Long-term focus Track record of letting activity Leverage off the Investec • • Location and quality of buildings High level of service to tenant base Group network • • • Strong tenants Early engagement with tenants to improve Strong relationships with key • Defensive portfolio portfolio WALE stakeholders • • Capital expenditure projects focused on achieving Passionate and driven • capital value uplift or income-generating improvements Extensive industry experience 01 03 05 Acquisition strategy Balance sheet 02 04 • • Purchasing quality assets Conservative but opportunistic balance • Right asset at the right price sheet management • • Focus on properties that deliver affordable Hedging strategy in place to mitigate occupancy solutions for tenants downside risk • • Focus on properties located near critical Manage funding costs infrastructure Investec Australia Property Fund | FY20 Results 6

Property portfolio

PORTFOLIO OVERVIEW Defensive portfolio focusing on metropolitan office and industrial properties Geographic 37% NSW Total 1 To Office Of Ind ndus ustr trial spread ¹ , ² 16% VIC Properties (#) 30 12 18 13% QLD 10% ACT Valuation (AUDm) 1 085 763 322 5% WA Area (m 2 ) 333 889 135 574 198 315 3% SA Occupancy (%) 2 99.0 98.6 100.0 3% NT 13% NZ WALE (years) 2 4.5 3.8 6.1 Leases expiring after 5 years (%) 2 33.7 20.7 64.5 Sector spread ¹ , ² WARR (%) 2 3.3 3.4 3.2 WACR (%) 3 6.57 6.46 6.83 Office 70% 30% Industrial 1. Includes the impact of the sale of 757 Ann Street, which settled post the reporting date on 1 April 2020. 2. Weighted by gross property income. 3. Weighted by property value . Investec Australia Property Fund | FY20 Results 8

ACQUISITIONS AND DISPOSALS Acquired three industrial assets for AUD81 million Sol old 757 A 757 Ann St Street eet for or A AUD94 94 million on 103 Welshpool 103 W ool R Roa oad 46–70 G 46 70 Gra rand Tru Trunkway 16 D 16 Dawson on S Stre reet Tota tal/weighte hted Welshpool ool W WA Gilm ilman S SA East Arm N rm NT av aver erag age 11 % abo bove ve bo book Purchase price (AUDm) 1 va value 26.5 25.5 29.0 81.0 Ownership interest (%) 100 100 100 100 Initial yield (%) 2 6.6 6.8 8.4 7.3 Occupancy (%) 3 100 100 100 100 WALE at acquisition (years) 3 8.7 8.3 7.9 8.2 3.07 4 Annual rent reviews (%) 3.25 Greater of 3.00 or CPI 3.00 Lease type Triple net Net Net Tenant Milne Feeds Australian Wool Handlers Northline 103 W 103 Welsh shpool ool Roa oad 46-70 G 46 70 Grand Trunk unkway 16 Dawson 16 son Street 1. Purchase price excludes transaction costs. 2. Initial yield is pre transaction costs. 3. Weighted by gross property income. 4. Assumes rent review of 3.00% for Gillman. Investec Australia Property Fund | FY20 Results 9 9

LEASING ACTIVITY Significant leasing activity during the period • 64 335m² of space leased ea (m 2 ) years) 1 RR (%) 1 Signed ed l leas eases es Cou ount ( t (#) #) Area ( WALE ( E (ye WARR ( or subject to signed HoAs, Offi fice ce notwithstanding only Renewal 10 14 609 3.7 years 3.24% 19 082m² of space vacant New tenant 9 4 769 5.6 years 3.33% or expiring in FY20 Tota otal of office 19 19 19 378 19 378 4.1 y 4. 1 years 3. 3.26% 26% Industrial • 2 540m² of vacant space Renewal 2 14 190 2.3 years 2.04% across the portfolio, the New tenant 2 14 499 2.5 years 1.34% majority of which is in Total in l industria rial 4 28 689 28 689 2. 2.4 y 4 years 1.71% 1. 71% NSW Total al s signed ed l leas eases es 23 23 48 067 48 067 3.6 y 3. 6 years 2.79% 2. 79% • 80% retention rate¹ , ² — of the 9 998m² of space that ea (m 2 ) years) 1 RR (%) 1 Signe ned HoA oAs Cou ount ( t (#) #) Area ( WALE ( E (ye WARR ( became vacant, 8 829m² Offi fice ce of space has since been Renewal 4 13 062 6.2 years 3.35% re-leased New tenant 2 3 206 10.0 years 3.00% Tota otal of office 6 16 268 16 268 6. 6.9 y 9 years 3. 3.28% 28% • Continued focus on early Industrial renewal of leases Renewal 0 0 0.0 years 0.00% New tenant 0 0 0.0 years 0.00% Total in l industria rial 0 0 0. 0.0 y 0 years 0.00% 0. 00% Tota otal s sign gned HoA oAs 6 16 268 16 268 6.9 y 6. 9 years 3. 3.28% 28% Tota otal 29 29 64 335 64 335 4. 4.8 y 8 years 2. 2.96% 96% 1. Weighted by gross property income. 2. Includes early renewal of leases. Investec Australia Property Fund | FY20 Results 10

LEASE EXPIRY PROFILE 99.0% occupancy and manageable short term lease expiries 1,2 40.0% iries 2 Key y expirie % FY21 FY State Government of Victoria 2.9 35.0% Ernst & Young 1.3 FY FY22 Government Property NSW 1.8 30.0% Allied Pickfords 1.1 FY23 FY Commonwealth of Australia 3.1 25.0% 19.2% 3.3% Toll 1.3 3.3% FY FY24 Probe 2.2 20.0% 19.2% Coil Steels 1.8 FY25 FY Carsales.com 4.5 15.0% 1.3% 2.4% Commonwealth of Australia 3.4 1.3% 10.0% 1.1% 1.1% 2.5% 2.4% 2.5% Leas eases es Leas eases es + + HoA oAs 21.7% 19.3% 19.4% 14.5% 5.0% 10.7% 11.9% 6.4% 6.1% 8.2% 7.5% 7.5% 5.4% Industrial Industrial 1.0% 0.9% Office Office 0.0% Vacant FY21 FY22 FY23 FY24 FY25 FY26+ 1. Includes the impact of the sale of 757 Ann Street, which settled post the reporting date on 1 April 2020. 2. Weighted by gross property income. Investec Australia Property Fund | FY20 Results 11