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

ANNUAL RESULTS PRESENTATION FOR THE YEAR ENDED 30 JUNE 2018

AGENDA Strategy In Action 01 Group Highlights 02 Financial Results 03 South Africa Capital Management 04 V&A Waterfront Portfolio Update 05 GOZ Property Investment & Development 06 GWI & GPRE Conclusion 07 Annexures 08 2

STRATEGY IN ACTION

STRATEGY IN ACTION BOOK VALUE Further progress implementing strategic initiatives, including Internationalisation, OF PROPERTY Funds Management and, Trading ASSETS and Development 27.7% Internationalisation offshore ▪ 29.0% ownership of Globalworth (GWI) ▪ Expansion into Poland: EBIT - GWI 68.4% acquisition of Globalworth Poland (GPRE) 20.5% - GRT 21.6% acquisition of GPRE offshore ▪ 65.5% ownership of Growthpoint Australia (GOZ) 4 South Africa Strategy Group Financial Capital Portfolio Property Investment Conclusion Annexures V&A Waterfront In Action Highlights Results Management Update & Development GOZ GWI & GPRE

STRATEGY IN ACTION (CONT.) Optimising and streamlining RSA portfolio ▪ Advanced stages of negotiation for a portfolio disposal of 58 properties across all three sectors for c. R5.8bn to a BEE consortium ▪ 30 individual assets sales, either transferred or in the process thereof, c. R4bn To be a Introducing new revenue streams Trading & development leading ▪ Strong development pipeline of assets for third parties as well as trading profits to be realised through the sale of properties, earmarked as trading opportunities, expected to flow in FY19 international ▪ Limited to 5% of the South African portfolio by value and expected to contribute no more than 1% - than 2% of distributable income property company Funds Management ▪ Successful first close for both the Growthpoint Investec Africa Properties (GIAP) Fund and providing space the Growthpoint Healthcare Properties Holdings Fund of USD212m and R285m respectively ▪ Accretive acquisition and development pipeline for both GIAP and Healthcare to thrive ▪ Both funds expected to be separately listed when they reach critical mass ▪ Growthpoint to earn fees of c. 2% of NAV for its 50% ownership of the GIAP manco and c. 1.25% of NAV from the Healthcare Fund ▪ Capital light strategy, earn fees on 100% of the assets but ultimately will only invest c. 20% directly ▪ Growthpoint seeks to ultimately build a R15bn funds management business with multiple funds on our funds management platform 5 South Africa Strategy Group Financial Capital Portfolio Property Investment Conclusion Annexures V&A Waterfront In Action Highlights Results Management Update & Development GOZ GWI & GPRE

GROUP HIGHLIGHTS

GROUP HIGHLIGHTS 6.5% distribution per share (DPS) growth ▪ Total FY18 dividend 208.6 cents per share R6.1bn distributable income ▪ Distributable income exceeds the R6bn mark ▪ 10.1% distributable income growth R132.9bn group property assets ▪ 8.7% from FY17 35.2% Group LTV ▪ Gearing remains well below 40% ▪ Increased from 35.0% at FY17 3.7x interest cover ▪ Increased from 3.5x at FY17 7 South Africa Strategy Group Financial Capital Portfolio Property Investment Conclusion Annexures V&A Waterfront In Action Highlights Results Management Update & Development GOZ GWI & GPRE

FINANCIAL RESULTS

CONSOLIDATED DISTRIBUTION CALCULATION FY18 FY17 INCREASE/ Rm Rm (DECREASE) Gross property income 10 976 10 716 2.4% RSA 8 443 8 079 4.5% GOZ (3) 2 533 2 637 (3.9%) Property expenses (2 366) (2 245) 5.4% RSA (2 007) (1 901) 5.6% GOZ (3) (359) (344) 4.4% Net property income 8 610 8 471 1.6% Other operating expenses (437) (416) 5.0% RSA (309) (289) 6.9% GOZ (3) (128) (127) 0.8% Net property income after operating expenses 8 173 8 055 1.5% Finance costs (2 574) (2 510) 2.5% RSA (2 027) (1 944) 4.3% GOZ (3) (547) (566) (3.4%) Finance income and other investment income 1 158 737 57.1% Investment income from V&A Waterfront (1) 592 524 13.0% Investment income from GWI 291 78 273.1% Investment income from GPRE 95 - 100.0% Underwriting fee GPRE capital raise 35 - 100.0% Other finance income (2) 145 135 7.4% Adjustment for NCI, foreign exchange profit /(loss) and normal taxation (649) (734) (11.6%) Distributable income 6 108 5 548 10.1% Dividend for the period 6 108 5 548 10.1% 1. Includes R12m (FY17: R45m) interest on V&A Waterfront development funding. 3. Average exchange rate at R9.97/AUD (FY17: R10.26/AUD) for GOZ. 2. Includes R33m (FY17: R45m) antecedent dividends and R19m (FY17:R0m) income from Stenham. 9 South Africa Strategy Group Financial Capital Portfolio Property Investment Conclusion Annexures V&A Waterfront In Action Highlights Results Management Update & Development GOZ GWI & GPRE

GROWTH IN DPS ▪ DPS growth boosted by offshore investment activities: - Underwriting of EUR450m GPRE capital raise in June 2018 - Incremental investment into GPRE and GWI and the timing thereof FY18 DPS Growth RSA 2.8% V&A 0.8% GOZ (0.2%) GWI Investment 2.5% GPRE Investment 1.1% GPRE Underwriting fee 0.4% Other income 0.1% Group Finance costs (1.0%) FY18 DPS Growth 6.5% 10 South Africa Strategy Group Financial Capital Portfolio Property Investment Conclusion Annexures V&A Waterfront In Action Highlights Results Management Update & Development GOZ GWI & GPRE

CONSOLIDATED BALANCE SHEET (EXTRACTS) FY18 FY17 INCREASE/ Rm Rm (DECREASE) Property portfolio (1) 112 227 109 442 2.5% RSA 78 634 76 906 2.2% GOZ (2) 33 593 32 536 3.2% Equity Investments 15 096 9 920 52.2% 50.0% Investment in V&A Waterfront 7 549 7 110 6.2% 29.0% Investment in Globalworth (FY17: 26.9%) 5 057 2 769 82.6% 21.6% Investment in GPRE 2 422 - 100.0% Other property-related investments (Ferguson Place, Storage, Open, Africa Fund) 68 41 100.0% Listed Investments (5) 801 226 254.4% Nominal borrowings (3) 47 385 42 364 11.9% RSA (4) 35 152 29 288 20.0% GOZ (2) 12 233 13 076 (6.4%) Shareholders interest (NAV) 75 273 72 045 4.5% 1. Includes R3 180m (FY17: R1 241m) of properties classified as held for sale. 4. The total value for FY18 excludes the deferred payment of R0 (FY7: R85m) on the Samrand land purchased. 2. Closing exchange rate R10.16/AUD (FY17: R10.04/AUD). 5. Stenham R4m (FY17: 226), IDR R797m (FY17:0) 3. Excludes fair value adjustments. 11 South Africa Strategy Group Financial Capital Portfolio Property Investment Conclusion Annexures V&A Waterfront In Action Highlights Results Management Update & Development GOZ GWI & GPRE

CAPITAL MANAGEMENT

RSA CAPITAL MANAGEMENT Total debt R35.2bn CCIRS & foreign denominated debt Interest ▪ Debut Eurobond issue for USD425m, converted to EUR350m at a % debt and CCIRS Cover weighted average cost of 3.0% Investment into GOZ 4.3 50% of market value and ▪ Inaugural Green Bond issue for R1.1bn for 5, 7 and 10 years at AUD800m (AUD/ZAR CCIRS) 84% of cost spreads of 139 to 200 basis 2.0 Investment into GWI and GPRE 93% of market value and ▪ Unsecured debt increased by R6.6bn EUR100m direct EUR loans 100% of cost EUR86m (EUR/ZAR CCIRS) Investment activities funded from EUR264m (EUR/USD CCIRS) ▪ R2.2bn equity DRIP proceeds ▪ R5.8bn net new borrowings ▪ R1.5bn property disposals Credit rating ▪ Moody's Global Scale Rating is Baa3 and National Scale Rating is AAA.za with a stable outlook FY19 Dividend hedge table % of dividends to be % dividends hedged Weighted average Currency used for servicing FX interest to ZAR via FECs FX rate on FECs GOZ AUD 23% 29% 10.56 GWI & GPRE EUR 49% 43% 17.28 13 South Africa Strategy Group Financial Capital Portfolio Property Investment Conclusion Annexures V&A Waterfront In Action Highlights Results Management Update & Development GOZ GWI & GPRE

RSA CAPITAL MANAGEMENT (CONT.) RSA facilities FY18 FY17 Unutilised committed facilities (Rbn) 5.8 4.5 Weighted average term of liabilities (years) 3.7 3.0 Weighted average term of fixed interest rate profile (years) (Incl. AUD & EUR CCIRS and IRS) 4.3 3.9 Weighted average interest rate (%) 9.1 9.2 Weighted average interest rate (%) (Incl. AUD & EUR CCIRS and EUR debt) 6.9 7.4 % debt at fixed interest rate 81.5 85.6 Unencumbered assets (incl. equity accounted and listed investments) (Rbn) 51.2 44.2 Unsecured debt (Rbn) 19.1 12.5 In order to diversify our investor pool and tap larger and more liquid markets, a strategic decision was taken to tap the international debt capital markets in support of our offshore growth, albeit at higher rates than where we can fund domestically. 14 South Africa Strategy Group Financial Capital Portfolio Property Investment Conclusion Annexures V&A Waterfront In Action Highlights Results Management Update & Development GOZ GWI & GPRE

PORTFOLIO UPDATE SOUTH AFRICA