Growthpoint Properties Limited Tiber acquisition: Road show - PowerPoint PPT Presentation

Growthpoint Properties Limited Tiber acquisition: Road show presentation December 2013 Mergers and Acquisitions | Divestitures | Listings | Capital Raisings | Privatisations | Restructurings | Black Economic Empowerment

Introduction to the Tiber Transaction The Tiber Transaction  On Monday, 18 November 2013, Growthpoint and the Tiber Group, jointly announced the R6.6bn acquisition by allows Growthpoint of the property portfolio of the Tiber Group (the “ Property Transaction ”) Growthpoint to acquire arguably  As an indivisible part of the transaction, Growthpoint also concluded agreements for: one of South Africa’s most  services to be provided by the executive management team of the Tiber Group, being Stephen Scott, exclusive office Germano Cardoso and Artur Carrazedo; property portfolios on an  the internalisation of Tiber Projects, being the Tiber Group property and asset management company accretive basis (the “ Manco Transaction ”); and for Growthpoint shareholders  a development agreement with a subsidiary of Tiber Bonvec Construction (“ TBC ”) for the development Introduction of the undeveloped bulk and redevelopment of the property assets acquired (the “ Development Agreement ”)  collectively the “Tiber Transaction ”  Growthpoint is pleased to present an overview of the Tiber Transaction, which we believe to be:  the acquisition of arguably one of the most exclusive office property portfolios in South Africa;  acquired on an accretive basis for Growthpoint’s shareholders; and  simultaneously secures the collective expertise of the Tiber Group  Established in 1951, the Tiber Group has grown into one of the most successful privately owned property development, property owning and construction groups in South Africa  Background to the The late Francesco Rivera is credited as being the visionary responsible, in conjunction with TBC, for creating the Tiber Group Tiber property portfolio  The property portfolio comprises approximately R6bn of predominantly P and A-grade properties in the Northern suburbs of Johannesburg 2

Overview of the Tiber Transaction The Tiber Transaction comprises three indivisible parts, the Property Transaction, the Manco Transaction and the Development Agreement for a combined value of R6.6bn Property Transaction Manco Transaction Devco Agreement R6,186m R350m R - Acquisition of the property assets and property holding Retention of the Tiber Group’s development companies comprising Internalisation of the Tiber the Tiber Group: Group asset and property expertise by means of an management business agreement with a  Shares in Tiber including 55 full-time staff subsidiary of TBC to:  Property Group and the retention of develop the  Tiber’s executive Letting enterprises undeveloped bulk;  Share in share management for a period and  of 3 years block companies redevelop the Tiber  Shares in JV properties companies  Undeveloped bulk 3

Overview of the Tiber Transaction cont’d The Tiber  Transaction is a In terms of the Property Transaction, Growthpoint will acquire 28 prime properties and a 50% interest in a further 9 significant boost properties including undeveloped bulk attached to the properties in a portfolio comprising: to Growthpoint’s  office portfolio: 308,163m 2 of commercial property space;  enhancing its Property Transaction  underlying 48,048m 2 of undeveloped bulk increasing the future potential upside of the Tiber portfolio; and income  a 50% interest in a development project of 19,200m 2 (the “ Annex ”) which, upon completion, will form streams; and  making GRT part of the Alice Lane precinct of properties together with the Towers and 12 Alice Lane properties the biggest office property owner with a  portfolio of The Manco Transaction has been concluded In order to retain the core competencies, skills and long standing 1.5m square tenant relationships of the executive management of Tiber Projects, comprising Stephen Scott, Germano Cardoso metres of office and Artur Carrazedo (the “ Executive Management ”) and the Tiber Projects employees space valued at nearly  The effective internalisation of the Manco will be achieved by: R25bn…  procuring services from the Executive Management for a period of 3 years to ensure among other Manco Transaction things the seamless integration of the Tiber assets into the Growthpoint property portfolio; … whilst  simultaneously acquiring the property and asset management business of Tiber Projects including 55 full-time securing the employees who are responsible for rendering management services to the Tiber Group; and continuity of the management  enabling the seamless integration of the assets acquired in terms of the Property Transaction into the and expertise of the Tiber Group Growthpoint property portfolio  The Development Agreement sets out the terms and conditions under which Growthpoint, alongside a wholly- owned subsidiary of TBC, will develop the undeveloped bulk acquired as part of the Property Transaction, and explore other development opportunities  The agreement provides the TBC subsidiary with a right of first refusal to make proposals to Growthpoint for the Development Agreement development of the undeveloped bulk and the redevelopment of the immovable properties being acquired in the Property Transaction  It is intended that through the Development Agreement, a new pipeline of developments and redevelopments of existing properties will be created to enhance Growthpoint’s existing income producing property portfolio 4

The Tiber Group management team The Manco Transaction ensures that Growthpoint is able to retain the skills and expertise of the Tiber Group executives as well as that of Tiber Bonvec Construction by means of the Development Agreement Fernando Cardoso Stephen Scott Fernando started with the Group Germano Cardoso Artur Carrazedo in 1981 and is the chief executive Stephen joined the Tiber Group officer of Tiber Bonvec Germano has been with the Tiber Artur has been with the Tiber in 1982 and focuses on the Construction Proprietary Limited, Group since 1988 and focuses Group since 1996 and is primarily business operations and finance one of the leading privately primarily on the facilities, involved with the financial aspects of the Tiber Group owned construction companies in property, project and operations of the group alongside including asset and property South Africa, providing development management of the all other business aspects of the management and property construction and property properties within the portfolio Tiber Group development development expertise to the Tiber Group as well as other leading industry clients 5

Tiber Transaction: Summary of the transaction metrics R2.3bn of the Tiber Transaction - split of the purchase consideration cash portion of the purchase consideration Property Transaction (value of property assets) 6,186,143,924 was raised by Growthpoint in Manco Transaction 349,853,520 May 2013 by Net working capital 1 22,825,546 means of an accelerated Tiber Transaction (total value attributable to properties and Manco Transaction) 6,558,822,990 bookbuild at an issue price of R28.00 per Settled by: share . . . … adding the Tiber Group external debt taken on by Growthpoint 2 R2.3bn of cash 1,561,347,369 proceeds from Cash portion of the Property Transaction (to be funded from cash proceeds of May 2013 bookbuild) 3 2,278,198,223 the bookbuild to the equity Cash portion of the Manco Transaction (to be funded from Growthpoint's existing debt facilities) 177,982,162 portion of the Net asset value adjustment (to be funded from Growthpoint's existing debt facilities) 22,825,546 purchase consideration Cash portion of the Tiber Transaction 4,040,353,300 results in c.73% of the Tiber Transaction Equity portion of the Property Transaction 2,346,598,332 being funded by the issue of new Equity portion of the Manco Transaction 171,871,358 Growthpoint shares Equity portion of the Tiber Transaction 2,518,469,690 Number of new Growthpoint shares to be issued 93,276,656 Share issue price (R) 27.00 Notes: 1. Net working capital to be confirmed at the effective date. Net working capital has been estimated as at the signature date and will be finalised on preparation and agreement of effective date accounts. The full net working capital balance will be funded in cash out of Growthpoint’s ex isting debt facilities 2. Tiber Group external debt estimated to be taken on by Growthpoint at the effective date. Tiber Group external debt has been estimated at the signature date and will be finalised on the preparation and agreement of the effective date accounts – any increase in the external debt balance will reduce the cash portion of the Property Transaction and vice versa. The external debt is likely to be refinanced by new Growthpoint borrowings 3. Growthpoint raised R2.5bn in May 2013 by means of an accelerated bookbuild at an issue price of R28.00 per share (5.8% yield on a clean price of R27.34) 6