STRATEGIC & OPERATIONAL OVERVIEW Canal Walk (Cape Town, - - PDF document

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SUMMARISED CONSOLIDATED RESULTS

For the year ended 30 June 2016

STRATEGIC & OPERATIONAL OVERVIEW

Canal Walk (Cape Town, Western Cape)

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Focused on emerging markets (South Africa, sub-Saharan Africa and South-Eastern Europe)

STRATEGY & OVERVIEW

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South African REIT Ownership of shopping centres, distinguished by:

• Quality, dominance and location
• Middle-to-higher income consumers
• Mix of flagship national and international retailers
• Preferred shopping destination in high-density

metropolitan areas or key cities

CapeGate (Cape Town, Western Cape)

CORPORATE HIGHLIGHTS

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* post year-end Canal Walk (Cape Town, Western Cape)

Acquired 3 new shopping centres New development completed – Achimota Retail Centre (Ghana) New equity raised New corporate bonds issued Disposed of two non-core assets R3,8bn USD 54,5m R700m* R1,1bn* R365m*

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FINANCIAL HIGHLIGHTS

June 2016 June 2015 % Change Distribution (cents) 619,9 543,0 14,2 Market capitalisation (Rbn) 31,6 29,4 7,3 Total assets (Rbn) 33,8 28,9 17,3 Loan to value (%) 30,8 22,9 34,5 NAV (R per share) 94,50 89,04 6,1 Total expense to income ratio (%) 36,0 36,0

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DISTRIBUTION GROWTH

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Cents per share

202 211 231 263 298 198 213 241 280 322 400 424 472 543 620 100 200 300 400 500 600 700 2012 2013 2014 2015 2016

1st Half 2nd Half Total

10,4%

% growth

9,4% 4,5% 7,5% 9,5% 13,1% 9,9% 6,0% 11,3% 13,7% 16,3% 15,0% 13,4% 14,9% 14,2%

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20 40 60 80 100 120 SA Listed Property Hyprop Inv Ltd

SHARE PRICE PERFORMANCE

JULY 2015 TO 23 Aug 2016

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Jul 2015 Aug Sep Oct Nov Dec Jan 2016 Feb Mar Apr May Jun Jul Aug Post year-end Q1: 52,3 million* Q2: 46,0 million* Q3: 46,0 million* Q4: 30,4 million* June 2016 June 2015 % shares traded 71,8% 73,0% % offshore shareholders 26,3% 25,0% * Number of shares traded per quarter

INVESTMENT PROFILE

Core South African portfolio R1,6 bn

Distributable income

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Core South African portfolio R1,3bn

78% 12% 6% 3% 1% Core South African portfolio R26,5bn Sub-Saharan Africa (excluding SA) R4,2bn Held for sale R864m

Investments

* Post year-end

Sold* R365m South-Eastern Europe R2,0bn 85% 6% 2% 5% 2% Core South African portfolio R1,3bn Sub-Saharan Africa (excluding SA) R84m Held for sale R79m Sold* R33m South-Eastern Europe R32m

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Rosebank Mall (Johannesburg, Gauteng)

OPERATING PERFORMANCE

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Arrears improved to 0,5% (2015:0,6%) Maintaining good rental growth and escalations Low vacancy Renewals successfully completed Trading density growth slowing Edcon

SOUTH AFRICAN PORTFOLIO

OPERATING PERFORMANCE

Canal Walk (Cape Town, Western Cape)

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LEASING TERMS

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6,3% 8,3% 7,6% 7,3% 7,4% 8,2% 8,2% 8,1% 0% 2% 4% 6% 8% 10% 12% 2013 2014 2015 2016 Rental growth Contractual escalation

LEASING ACTIVITY

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Leasing % of total portfolio Rentable area (m²) Rental growth (%) Contractual escalation (%)

• No. of leases

Retail 19,3 137 568 7,4 8,0 504 Offices 21,3 16 096 5,2 8,3 64 Total 19,6 153 664 7,3 8,1 568 4% 96% Lease renewal process Rentable area (m²) Leases still outstanding 6 346 Leases completed 153 664 Total 160 010

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Retail Total rentable area (m²) Expiring area (m²) % Rentable area of centre The Glen 79 704 19,651 25 Canal Walk 148 449 18 179 12 Cape Gate Mall 63 783 13 638 21 Atterbury Value Centre 47 785 12 629 26 Somerset Mall 69 048 9 981 14 Willowbridge 40 341 9 094 23 Hyde Park Corner 28 583 7 741 27 Woodlands Boulevard 71 642 6 329 9 Clearwater Mall 86 867 3 177 4 Rosebank Mall 62 413 2 649 4 Retail 698 615 103 068 15 Offices 65 275 22 565 35 Portfolio total 763 890 125 633 16

LEASE EXPIRY PROFILE

2016 / 2017

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Vacancies 30 Jun 2016 30 Jun 2015 30 Jun 2014 Retail (%) 0,8 1,3 1,2 Offices (%) 4,5 8,3 13,8 Total (%) 1,1 2,0 2,4

VACANCIES

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Clearwater Mall (Johannesburg, Gauteng)

Tenant updates:

• First Starbucks in South Africa opened at

Rosebank in April 2016

• First H&M in Hyprop portfolio opened at

Clearwater Mall in April 2016

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TRADING OVERVIEW

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6,8% 7,0% 7,4% 5,2% 0% 2% 4% 6% 8% 10% Jun 2013 Jun 2014 Jun 2015 Jun 2016 6,9% 6,9% 7,1% 7,3% 0% 2% 4% 6% 8% 10% Jun 2013 Jun 2014 Jun 2015 Jun 2016

Trading density growth Rent ratio (rental as % of turnover)

DEVELOPMENTS

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Total spend on projects, new equipment and tenant installations Under construction:

• Somerset Mall

– H&M R16m

• Atterbury Value Mart – Checkers

R31m Under planning:

• Canal Walk

R45m

• Rosebank Mall extension

R122m Extensions and developments completed:

• Somerset Mall

– Woolworths & other R81m

• Clearwater Mall

– H&M extension R22m R178m

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West Hills Mall, Accra, Ghana Ikeja City Mall (Lagos, Nigeria)

INVESTMENT IN SUB-SAHARAN AFRICA (excluding SA)

MARKET CONDITIONS

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Negatives

• Defensive portfolio - able to withstand headwinds
• Located in key cities - economic growth higher than country average
• Portfolio largest and best quality in sub-Saharan Africa
• Weakening of local currencies
• USD liquidity and availability
• Lower economic growth in 2016

Positives

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CURRENCIES

EXCHANGE RATE VOLATILITY

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0,0 0,5 1,0 1,5 2,0 2,5

Ghana Nigeria Zambia RSA

Sep 2013 Dec Mar Jun 2014 Sep Dec Mar Jun 2015 Sep Dec Mar Jun 2016 Indexed

INCOME PRODUCING PROPERTIES

INVESTMENT IN SUB-SAHARAN AFRICA (EXCL. SA)

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Centre City & country Hyprop % share Rentable area m² Vacancy % rentable area Foot count / m² Accra Mall Accra, Ghana 17,6 21 240 27 West Hills Mall Accra, Ghana 16,8 28 466 16 Achimota Retail Centre Accra, Ghana 28,1 15 170 18,0* 28 Manda Hill Lusaka, Zambia 68,8 40 561 4,7 22 Ikeja City Mall Lagos, Nigeria 75,0 22 223 2,3 30 Average 4,0

* 8 months of trading - opened in Nov 2015

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Achimota Retail Centre (Accra, Ghana) Kumasi City Mall (Kumasi, Ghana) Accra Mall (Accra, Ghana)

DEVELOPMENTS

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• Opened in October 2015
• Under construction
• Opening April 2017
• Redevelopment of food court

and 1 000m² extension

• Cost USD 9,5m
• Completed in April 2016

West Hills Mall, Accra, Ghana Delta City (Belgrade, Serbia)

INVESTMENT IN SOUTH- EASTERN EUROPE

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STRATEGY & STRUCTURE

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Strategy

• Hystead established in the UK
• 60% shareholding
• Secured EUR funding
• To acquire or develop high-quality shopping malls
• Size of EUR 1bn within 5-years (currently EUR 203m)
• Will partner with strong local developers/owners – signed letters of intent
• Attractive income yields
• Low cost of bank funding

Company structure

FOCUS ON EMERGING MARKETS

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Strong economic growth off a lower base Better return on investment Less competition / can acquire better quality centres Available skilled labour Lower taxes

Delta City (Belgrade, Serbia)

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Centre City & country Hyprop % share Rentable area m² Vacancy % Rentable area Foot count / m² Delta City Belgrade, Serbia 60 29 876 28 Delta City Podgorica, Montenegro 60 23 729 19

INCOME PRODUCING PROPERTIES

Belgrade (Serbia) Podgorica (Montenegro)

• Internal changes to improve

tenant mix

• Increase rentable area by

12 000m²

Potential expansions:

Somerset Mall (Somerset West, Western Cape)

FINANCIAL RESULTS

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1,551 1,701 1,743 1,743 1,320 1,665 1,848 1,932 1,964 1,506 0,0 0,5 1,0 1,5 2,0 2,5 Investment property income Add Rosebank Mall Add sub-Saharan Africa (excl. SA) Add South-Eastern Europe Net interest and other

NET INCOME

DRIVERS OF GROWTH

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Rbn 7,3%

30 Jun 2015 30 Jun 2016

8,7% 10,8% 12,6% 14,2%

NET INCOME

YEAR ON YEAR CHANGE

1 319 618 1 505 519 1 505 519 118 306 28 947 41 286 31 944 22 868 (51 085) (6 365) 1 100 000 1 150 000 1 200 000 1 250 000 1 300 000 1 350 000 1 400 000 1 450 000 1 500 000 1 550 000 1 600 000 30 Jun 2015 Existing portfolio Rosebank Mall Sub-Saharan Africa (Excl. SA) South-Eastern Europe Net interest Properties sold Other 30 Jun 2016*

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R’000 * Antecedent dividend excluded

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30 June 2016 (R’000) 30 June 2015 (R’000) % Change South African property portfolio 1 848 151 1 752 187 5,5 Investments in sub-Saharan Africa (excl. SA) 83 654 42 368 97,4 Investments in South-Eastern Europe 31 944

• Word4Word Marketing

1 000 4 243 Fund management expenses (64 922) (62 001) 4,7 Net interest (394 310) (417 178) Antecedent dividend 32 146

• Total distributable earnings

1 537 663 1 319 619

DISTRIBUTABLE EARNINGS STATEMENT

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RECONCILIATION TO DIVIDEND DECLARED

30 June 2016 (R’000) 30 June 2015 (R’000) Total distributable earnings 1 537 663 1 319 619 Total shares in issue at year-end 243 256 092 243 256 092 Treasury shares in issue (410 659) (265 659) Shares issued, August 2016 5 185 186

• Shares in issue for distributable earnings

248 030 619 242 990 433 Dividend per share (cents) 619,9 543,0 Dividend per share growth (%) 14,2 15,0

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BALANCE SHEET

EXTRACTS

30 Jun 2016 (Rm) 30 Jun 2015 (Rm) % Change Hyprop’s share Investment property (South Africa) 26 502 25 003 6,0% Investments in sub-Saharan Africa (excluding South Africa) 5 061 2 339 116,4% Held for sale 1 244 1 235 Other assets 427 279 Minority share 615 Total assets 33 849 28 856 17,3% Total debt 9 926* 6 692 48,3% Net asset value per share (R) 94,50 89,04 6,1%

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* Excludes EUR denominated debt

PROPERTY VALUATIONS

SOUTH AFRICAN PORTFOLIO*

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Category Size (m²) Hyprop share (Rm) % change (from June 2015) Value (R/m2) Average yield Shopping centres 649 479 25 282 6,3% 42 870 6,8% Value centres 90 600 1 755 1,2% 19 371 8,7% Stand-alone offices 23 811 328 3,9% 13 778 10,0% Total 763 890 27 365 5,9% 39 176 7,0%

* Excludes properties sold post year-end

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DEBT MANAGEMENT

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30 June 2016 (Rm) 30 June 2015 (Rm) Bank debt 9 344 4 520

• South Africa

2 992 2 327

• USD (Rand equivalent)

4 842 2 193

• EUR (Rand equivalent)

1 510 Debt capital market funding 1 640 2 172

• Corporate bonds

1 200 1 800

• Commercial paper

440 372 Cash and cash equivalents (239) (138) Net borrowings 10 745 6 554 Loan to value 30,8% 22,9% 1000 2000 3000 4000 5000 6000 EUR debt USD debt DCM funding (SA) Bank facilities (SA) 30 Jun 2016 30 Jun 2015

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SOURCES OF FUNDING

R million 44% 33% 15% 32% 27% 35% % of total debt 14%

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DEBT AT FIXED RATES

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30 Jun 2016 (%) 30 Jun 2015 (%) South African debt 89,6 96,7 USD debt 72,4 89,9

DEBT MATURITIES*

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30 Jun 2016 (years) 30 Jun 2015 (years) Fixed rates and swaps

• South African debt

4,9 5,6

• USD debt

3,7 4,1 Facilities

• South African debt

2,4 2,8

• USD debt

3,6 4,2

* Excludes EUR denominated debt

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COST OF FUNDING

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30 Jun 2016 (%) 30 Jun 2015 (%) South African debt 8,9 8,4 USD debt 4,6 4,4 EUR debt 1,7

• Delta City (Belgrade, Serbia)

PROSPECTS

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OUTLOOK & FOCUS

SOUTH AFRICA

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OUTLOOK

• Low economic growth over medium term
• Interest rate – further possible increases
• Credit rating – possible downgrade

FOCUS

• Improve tenant mix
• Maintain strong operational performance
• Refurbishments and extensions
• Disposal of non-core assets

Clearwater Mall (Gauteng)

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OUTLOOK

• Low economic growth - 2016
• Short-term currency volatility
• Possible economic recovery by

end 2017/2018 FOCUS

• Bed-down new developments
• Improve operational performance
• Working towards future liquidity event

Accra Mall (Ghana)

OUTLOOK & FOCUS

SUB-SAHARAN AFRICA (Excl. SA)

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OUTLOOK

• Good investment opportunities
• Strong economic growth
• International brands entering the market

– supports income growth FOCUS

• Unlock expansion opportunities
• More acquisitions
• Potential development opportunities

Delta City (Belgrade, Serbia)

OUTLOOK & FOCUS

SOUTH-EASTERN EUROPE

PROSPECTS

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Woodlands Boulevard (Pretoria, Gauteng)

FY 2017: Dividend growth

• f ± 10%

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Canal Walk (Cape Town, Western Cape)

APPENDICES

COMPANY STRUCTURE

SOUTH AFRICAN PORTFOLIO

100% owned Co-owned Held for sale Somerset Mall Clearwater Mall Hyde Park Corner Rosebank Mall Woodlands Boulevard CapeGate Atterbury Value Mart Offices Cradock Heights Canal Walk (80%) The Glen (75,15%) Willowbridge Offices:

• Glenwood
• Lakefield

Somerset Value Mart

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SOUTH AFRICA Sold Offices:

• Glenfield

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* Under development

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100% owned AttAfrica (Mauritius) Manda Hill (Zambia) Ikeja City Mall (Nigeria) Accra Mall (Ghana) West Hills Mall (Ghana) Achimota Retail Centre (Ghana) Kumasi City Mall (Ghana)* 37,5% 50% 75% 50% Hyprop Investments Mauritius 47% 75% 75% 45%

COMPANY STRUCTURE

SUB–SAHARA AFRICAN PORTFOLIO

SUB- SAHARAN AFRICA

* Secured EUR funding

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Delta City Belgrade (Serbia) Delta City Podgorica (Montenegro) 100% 60% owned* Hystead Limited (established in the UK )

COMPANY STRUCTURE

SOUTH-EASTERN EUROPE PORTFOLIO

100% SOUTH- EASTERN EUROPE

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17,4 18,7 20,2 26,4 28,6 33,4 12,9 17,7 19,0 19,3 29,4 31,6 26,2% 23,1% 22,9% 26,6% 23,1% 30,8% 0% 15% 30% 45% 60% 4 8 12 16 20 24 28 32 36 Jun 2011 Jun 2012 Jun 2013 Jun 2014 Jun 2015 Jun 2016 Investment property Market cap LTV % Rbn LTV %

TRACK RECORD

200 400 600 800 1000 1200 1400 June 17 June 18 June 19 June 20 June 21 June 22 June 23 June 24 Bank facilities USD Funding

DEBT MATURITY PROFILE

FIXED RATES AND SWAPS*

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Rm

Average maturity:

• South African debt 4,9 years
• USD debt

3,7 years

* Excludes EUR denominated debt

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• 200

400 600 800 1 000 1 200 1 400 1 600 1 800 June 17 June 18 June 19 June 20 June 21 June 22 June 23 June 24 Bank facilities Bonds / Commercial paper USD Funding

DEBT MATURITY PROFILE

BANK FACILITIES AND DCM

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Average maturity:

• South African debt 2,4 years
• USD debt

3,6 years

Rm

% GROSS RENT TO TURNOVER

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% Gross rent to turnover

Deterioration Improvement

9,7% 9,1% 8,9% 8,9% 8,3% 7,9% 7,3% 7,1% 6,7% 5,4% 4,4% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% The Glen Shopping Centre Canal Walk Hyde Park Corner Atterbury Value Mart Clearwater Mall Rosebank Mall Woodlands Boulevard Somerset Mall CapeGate Mall Somerset Value Mart Willowbridge Mall

Portfolio average: +7,3% (2015: +7,1%)

12% 0% 2% 3% 14% 1% 1% 5% 1% 3% 1%

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TRADING DENSITY

Per month (R/m²)

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4 168 3 356 3 239 2 891 2 807 2 666 2 568 2 541 2 423 2 400 2 059 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 5 000 Hyde Park Corner Canal Walk Somerset Mall Clearwater Mall Willowbridge Mall Rosebank Mall Somerset Value Mart Woodlands Boulevard Cape Gate Mall The Glen Shopping Centre Atterbury Value Mart

9%

Average portfolio growth: +5,2% (2015: +7,4%)

7% 9% 9% 4% 2% 7% 5% 18% 5% 3%

REVENUE SPREAD

12 MONTHS

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June 2015 June 2016

59% 20% 7% 5% 4% 3% 2%

Retail rental Municipal cost recovery Operating cost recovery Customer parking Storerooms & other Office rental Turnover rental

59% 21% 6% 5% 4% 3% 2%

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Canal Walk

(80% undivided share)

Clearwater Mall

Region Johannesburg Total rentable area (m²) 86 867 Vacancy levels 0,5% Foot count/m² 10 Region Cape Town Total rentable area (m²) 158 632 Vacancy levels 1,2% Foot count/m² 12

Woodlands Boulevard

Region Pretoria Total rentable area (m²) 71 642 Vacancy levels 0% Foot count/m² 11

TOP 8 SA PROPERTIES

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Rosebank Mall

Region Pretoria Total rentable area (m²) 62 413 Vacancy levels 0,9% Foot count/m² 16

CapeGate Regional

Region Cape Town Total rentable area (m²) 63 783 Vacancy levels 0,2% Foot count/m² 14

TOP 8 SA PROPERTIES (cont.)

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The Glen

(75,15% undivided share)

Region Johannesburg Total rentable area (m²) 79 704 Vacancy levels 2,0% Foot count/m² 14

Hyde Park Corner

Region Johannesburg Total rentable area (m²) 39 088 Vacancy levels 0,5% Foot count/m² 15

Somerset Mall

Region Cape Town Total rentable area (m²) 69 048 Vacancy levels 0% Foot count/m² 13

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DISCLAIMER

FORWARD-LOOKING STATEMENTS

• This document contains forward-looking statements that, unless otherwise

indicated, reflect the group’s expectations as at 30 June 2016

• Actual results may differ materially from the group’s expectations if known

and unknown risks or uncertainties affect its business, or if estimates or assumptions prove inaccurate

• The group cannot guarantee that any forward-looking statement will

materialise and, accordingly, readers are cautioned not to place undue reliance on any forward-looking statements

• The group disclaims any intention and assumes no obligation to update or

revise any forward-looking statement even if new information becomes available as a result of future events or for any other reason, other than as required by the JSE Listings Requirements

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