Redefine group results for the year ended 31 August 2019 1

1Redefine group results for the year ended 31 August 2019


Our conversation

The critical levers that impact our ability to create value

Grow Reputation

Invest Strategically

Optimise Capital

Operate Efficiently

Engage Talent

Creating sustained value for all our

stakeholders

Securing capital in a constrained and costly

environment

Operating in a low growth, rising

administered cost context

Harnessing our people’s skills,

abilities and attitudeLiving our purpose

Strategic matters

Strategic objectives


Growing reputation

Placing people at the heart of what we doSection 01


Key outcomes for 2019

Relationships are the lifeblood of our people-centric approach

Gr

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Environment Carbon emissions savings from our solar

installations for the year equate to taking

approximately 6 300 passenger cars off

the road

Expanded external waste management to

office buildings as part of our Green Star

programme

Continue to install various technologies such

as online monitoring and leak detection, smart

shutoff valves and sensors in bathrooms to

reduce water consumption

Social International Council of Shopping Centres

Solal award for Innovation Challenge

Centurion Mall and Kyalami Corner

won Gold at Footprint Marketing

Awards 2019

233 stakeholders engaged with the second

Challenge Convention at Maponya Mall

Governance Improved board independence – appointed

Daisy Naidoo. 88% of non-executive

directors independent, 50% of board is

female

3rd in EY excellence in integrated

reporting 2019

Focus on embedding IT governance

standards and aligning IT services

with current and future business needs

Environmental benefit

Retu

rn o

n investm

ent

Waste recycling

Water efficiency

Groundwater extraction

LED retrofit

Energy storage

Waste water treatment

Green Star certifications

Green cleaning

Solar PV

High

Low High


Looking ahead

Achieving stakeholder goals to create sustained value

2020 focus

Anticipated outcome

Safeguard Redefine’s brand

Remain relevant to stakeholders

Heighten focus on ESG

Improve stakeholder perceptions

Embed ESG considerations in all aspects

A source of sustained growth in total returns for

investors and funders

An employer of choice for employees

A differentiated provider of relevant space to tenants

A preferred business partner for brokers and suppliers

A responsible community participant

Our stakeholder goals

Gr

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Investing strategically

Positioning the core portfolio to withstand prevailing conditionsSection 02



Advancing our strategy to diversify, grow and improve the quality of the property asset platform

In

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Local development activity totaled

R2.4 billion

Offshore expansion totaled

R4.3 billion, with R3.6 billion invested in Poland

Deployed R6.9 billion into property assets

Property assets under management

expanded to R95.4 billion

NTAV declined by

33.0 cents per share to

943.9 cents per share

732

817

556

195136

678

1 545

Sectoral split of development activities and capital expenditure R4.7 billion

Office

Retail

Industrial

Residential

Local Student Accommodation

Leicester street development

Offshore logistics

Rm

6

33

50

73

80

2 036

4 659

Atlantic Hills (55%)

55 Empire Road

JD Rosslyn (50%)

European Logistics Platform land

Torre Modderfontein

EPP shares

Development activities and capex

Capital deployed of R6.9 billion

Rm

Local student accommodation

Australian student accommodation

European Logistics Platform


Local portfolio profile

A well-located, high-value, high-quality and efficient portfolio

10 09311 096

12 87014 382 15 854

333312 327 315 302

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300

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10 000

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FY15 FY16 FY17 FY18 FY19

Impact of portfolio restructure

Average value per m² (R) Number of properties (#)

#RRetail 40%

of local portfolio value

(FY18 | 40%)

Carrying value

R72.8 billion(FY18 | R72.4bn)

18% located in

Western Cape(FY18 | 17%)

Industrial 19%of local portfolio value(FY18 | 19%)

Office 36%

of local portfolio value

(FY18 | 37%)

73% located in

Gauteng(FY18 | 73%)

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Local portfolio highlights

A focus on organic growth

Average value

per property of

R236 million(FY18 | R221m)

Active portfolio capital

appreciation of 3.3%

Developments in progress

total R342.8 millionat average projected yield

of 9.3%

Completed developments

totaling R2.7 billion at

average yield of 8.9%

Disposals totalling

R1.4 billion

at yield of 8.2%

Total active

vacancy of 5.1%(FY18 | 4.5%)

Total letting

at 841 857m² (FY18 | 942 102m²)

Tenant retention

by GLA 93.3%(FY18 | 90.4%) 4%

11%13%

16%

9% 8%

33%

6%

0

400

800

1 200

1 600

Monthly 2020 2021 2022 2023 2024 Beyond2024

Vacancy

Lease expiry profile by GLA (m²)

Th

ou

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8.4%

8.6%

9.2%

9.6%

10.6%

0% 2% 4% 6% 8% 10% 12%

Retail

Office

Industrial

Specialised

Student accommodation

Exit cap rate per sector

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Retail portfolio overview

* Figures are based on top 19 shopping centres

Differentiating by creating outstanding places for modern consumer lifestyles

16%

35%37%

6%

6%Value by type (%)

Super regional

Regional

Community / Small regional

Other

Neighbourhood

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** Excludes monthly leases

Value


GLA

1.4 million m² (FY18 | 1.4 million m²)

Active vacancy

4.6% (FY18 | 4.5%)

Trading density growth(like-for-like)

3.0% (FY18 | 3.3%)

Sales growth(like-for-like)

4.2%(FY18 | 3.7%)

Footfall growth

-1.8%* (FY18 | -2.0%)

Rent to turnover

8.0%*(FY18 | 7.9%)

Tenant retentionby GLA

94.1% (FY18 | 90.7%)

Renewal reversion

-1.8% (FY18 | 0.1%)

Completed developments and redevelopments of

R959.3 millionat yield of 7.2%

Edcon exposure reduced by

11 474m² to

71 223m²

Renewal success rate by GLA

72.0%**


Office portfolio overview

Efficient, modern facilities to enable work-life integration

51%

34%

15%

Value by grade (%)

Premium

A Grade

Secondary

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* Excludes monthly leases

Value


GLA


Active vacancy

10.2% (FY18 | 9.5%)

Tenant retention by GLA

91.4% (FY18 | 87.7%)

Renewal reversion

-2.0%(FY18 | -3.1%)


56.7%*

Green star rated buildings increased to

74

Solar PV roll-out of

2 408 Kwp

Installation of

WeWorkat Rosebank Link

Completed new developments of

R1.3 billionat yield of 8.4%

Redevelopments in progress of

R653.6 million

at yield of 6.5%

Disposals

R613.5 million

at yield of 7.5%


Industrial portfolio overview

Incorporating key design elements to functionally differentiate our offering

46%

14%

22%

7%

1%

10%Value by type (%)

Land

Big box retailer

Warehousing / Logistics

Industrial units

Light manufacturing

Heavy grade industrial

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*Excludes monthly leases

Value


GLA


Active vacancy

1.8% (FY18 | 1.0%)

Acquisitions of

R135.8 million at an average yield of

9.7%

Disposals of

R147.4 million

at a yield of 9.3%

Tenant credit risk on the rise –

Roborin liquidation


65.7%*

Tenant retention by GLA

93.8% (FY18 | 91.8%)

Renewal reversion

-3.6% (FY18 | 2.9%)

Completed new developments of

R236.5 millionat yield of 9.2%

New developments in progress of

R342.7 million

at yield of 9.3%

Infrastructure projects in progress

R720.9 million


Alternative Investments

Diversifying income streams

Local student accommodation Loans High yielding

Redefine’s interests → Current bed capacity at 8 378→ Loans of R1.9 billion to various

third parties attracting commercial

interest rates

→ Solar PV plants

→ LED screens, exterior media, kiosks and wi-fi

→ Park Central residential development

→ Oando Wings

Platform profile

Completed developments:

→ Hatfield Square (Pretoria)

2 331 beds

→ Lincoln House (Bloemfontein)

469 beds

→ Roscommon House (Cape Town)

582 beds

→ Loan to BEE consortium for Delta

shares disposal reflected in the books

at market value of the Delta shares

→ 23 Solar PV plants generate 23.7 MWp

→ Non-GLA income growing by 16.2%

→ Park Central comprising 159 units – 37.9% and

12.1% by value sold and let out respectively

Priorities

→ Expand Yale Village by 196 beds

→ Expand into Pietermaritzburg

538 beds

→ Demand for specialist assets –

recycle opportunity

→ Provide loan funding to secure

strategic partners and provide

transformed opportunities

→ Downside risk on Delta to be

mitigated

→ Pipeline of Solar PV projects to add another

3.5 MWp

→ Leverage non-GLA opportunities off property base

→ Sell/rent Park Central units

→ Sale of Oando Wings to Growthpoint Investec

African Properties

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International portfolio profile

Geographic diversification in hard currency markets

Listed securities


Carrying value

R22.6 billion (FY18 | R18.9bn)

*Including Redefine’s foreign borrowings

**Including local assets and borrowings net of cash

Direct properties


Proportional share of

assets R37.3 billion (FY18 | R32.6bn)

Redefine see through

LTV** 51.7%(FY18 | 46.1%)

Proportional share of debt*

R33.1 billion (FY18 | R29.9bn)

12%

16%

70%

2%

Geographic spread by value (%)

United Kingdom

Australia

Poland

Africa

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International portfolio highlights

Seeking active asset management opportunities to unlock and sustain value

Expanded logistics through

developments of

130 633m2 costing

EUR75.2 million

Invested

R3.6 billion into Poland

EPP NAV per share

EUR1.33

Acquired 88.6 million EPP

shares for

EUR129.8 million

Leicester street (student

accommodation)

occupancy at 97%

Interest in GRIT sold for

R18 per share

EUR32.8 million of

exchangeable bond

redeemed

RDI impaired by

R266.4 million

38%

19%

28%

3%

12%

Sectoral spread by value (%)

Retail

Office

Industrial

Student Accomodation

Hotels


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European Logistics Platform overview

Economic growth, e-commerce expansion and infrastructure improvement drives demand

Value of income

producing assets

EUR295.0 million

Under construction

EUR63.9 million

at yield of 6.7%

GLA added through developments

130 633m2

Income producing GLA

444 114m2

Weighted average unexpired lease term

4.5 years

Active vacancy

16.0%*

Completed new

developments

EUR75.2 millionat yield of 6.7%

Introduction of

equity investorat advanced stage

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GLA by tenant type (%)

* 8.5% as at 25 October 2019

9%

25%

23%

28%

10% 3%

1% 1%

Distribution

Retailer

3PL

Production

Vacant

Delivery

Packaging

Supplier


Protecting our net asset value

Focus on restoring value of under-performing assets

RDI REIT PLC Delta Oando Wings

Redefine’s investment has declined

R2.2 billion in value since August 2016

Changing retail behaviour, Brexit and balance

sheet risk contributed to the loss in value

Redefine is working closely with RDI to

evaluate all options which may require

Redefine to remain invested in the medium

term without committing further equity

The loan to Cornwall Crescent (BEE

consortium) is referenced to Delta’s share

price as Redefine’s sole recourse is to the

shares

The loan has been written down by

R1.3 billion since inception (June 2017) –

from R9 to R1 per share

Redefine is working closely with Cornwall

Crescent to restore some of the lost value

Growthpoint Investec African Properties

(GIAP) are first concluding a portfolio

transaction with our partners RMB Westport,

which is well advanced

The sale of our share in Oando Wings will

be for shares in GIAP, who plan to list in

due course

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Capital allocation priorities 2020

Allocating capital to ensure sustained value creation

Improving: R93.1 million Expanding: R3.0 billion

Revenue enhancing operational capital

expenditure

Solar PV expansion

Local retail development activity

Local residential development activity

European Logistics Platform developments

Australian student accommodation expansion

Local industrial developments

Local student accommodation developments

Defending: R365.8 million Protecting: R47.6 million

Local operational capital expenditure

Local retail capital expenditure

Capital enhancing operational capital

expenditure

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Low

Hig

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Long-term value creation potential

Limited Significant

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Looking ahead

Simplified, focused and significant in each sector / geography

Property portfolio

Retail

Office

Industrial

Indicative asset platform 3+ years

Direct local property portfolio Direct Polish properties International listed securities

EPP N.V.European Logistics Platform

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Anticipated outcome

Grow offshore logistics presence

Lift NTAV per share by 6%

2020 focus

Continued focus on asset quality

Offshore expansion through development

activity

Restoring value of underperforming assets


Optimising capital

Section Lowering LTV ratio and conserving equity to strengthen the balance sheet03



Strengthening the balance sheet is imperative to our sustainability and long-term expansion plans

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268

645

1 634

5 123

0 1 000 2 000 3 000 4 000 5 000 6 000

Shares issued under DRIP

Vendor loans repaid

Recycling of capital

Debt raised

Sources of capital of R7.7 billion

Rm

Average cost of debt

decreased by 50bps to 5.8%

Interest cover ratio maintained

at 4.3x (FY18 | 4.3x)

Implemented a dividend

pay-out policy

Interest rates hedges on

87.3% of total debt

LTV increased to 43.9%Funded deployment of capital of R6.9 billion and working capital of R0.8 billion


Currency analysis of property assets and borrowings

* Net of cash and cash deposits on cross currency swaps

** The over exposure to GBP debt is due to the impairment of RDI

*** The over exposure to USD debt is due to the impairment of Oando Wings and sale of GRIT

The debt has no recourse to the GBP/USD assets, therefore it does not create liquidity risk but only NAV risk

2019 2018

CurrencyProperty

assetsRbn

DebtRbn

LTV%

Weighted average cost

%

Property assets

Rbn

DebtRbn

LTV%

Weighted average cost

%

Net ZAR* 72.8 21.2 29.1% 9.1% 72.4 20.8 28.8% 9.3%

AUD 3.6 1.9 52.0% 4.0% 2.1 1.4 66.7% 4.1%

EUR 15.8 14.0 89.2% 1.7% 11.9 9.4 79.3% 1.6%

GBP** 2.8 4.1 145.5%# 3.0% 4.0 4.2 105.1% 3.0%

USD*** 0.4 0.6 141.0%# 4.5% 0.9 0.6 63.9% 4.1%

Total 95.4 41.8 43.9% 5.8% 91.3 36.5 40.0% 6.3%

Our funding strategy focuses on protecting our net asset value and optimising cost of capital

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Currency Property assetsRbn

DebtRbn

LTV%

AUD 3.6 2.6 73.0%

EUR 15.7 15.5 98.6%

GBP 2.8 2.3 80.2%

USD 0.4 0.2 53.2%

# Post year end, in order to reduce the overexposure to USD and GBP debt, Redefine is in the

process of refinancing a portion of this debt into AUD and EUR facilities. Post the refinance the LTV

position is anticipated to be:


Funding snapshot

Funding sources2019

Rbn

2018

Rbn

Bank borrowings 12.9 12.4

Listed bonds and commercial paper 9.2 5.5

Foreign-listed bonds 2.5 2.5

Unlisted bonds 16.6 15.7

Total debt 41.2 36.1

Loan-to-value ratio 43.9% 40.0%

Average term of debt 3.4 years 3.6 years

% of debt secured 66.3% 70.4%

% of asset secured 65.3% 66.4%

Weighted average cost of ZAR debt 9.1% 9.3%

Weighted average cost of FX debt 2.3% 2.3%

Weighted average cost of total debt 5.8% 6.3%

% of ZAR debt hedged 92.6% 81.9%

% of FX debt hedged 79.3% 79.8%

% of total debt hedged 87.3% 81.2%

Average term of hedges 2.9 years 2.8 years

Undrawn facilities (Rbn) 5.6 3.8

Interest cover ratio 4.3x 4.3x

Accessing debt funding from diverse sources

Moody’s investment grade credit rating maintained

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Update on lowering the LTV

Recalibrating to an environment of scarce and costly capital

Improving the LTV is being addressed through a combination of

→ Local property disposals in progress totalling R1.2 billion

→ Selling non-core assets to realise R8 billion

→ Introducing an equity investor into the European Logistics Platform

→ Limiting speculative capital expenditure going forward

→ Placing a halt on acquisitions

→ A distribution reinvestment programme was considered inappropriate given the share price

→ Introduction of a dividend pay-out policy

→ Restoring value of under-performing assets

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Introduction of a dividend pay-out policy

Conserving retained earnings is integral to building a sustainable capital structure

Rm

Cents per

share

Distributable income for the year 5 472 101.0

Distributable income for H1 2019 2 658 49.2

Distributable income for H2 2019 2 814 51.8

Operational capex requirement for H1 2020 (200) (3.7)

Pay-out

ratio

Dividend for the year 5 272 97.3 96.4%

Dividend declared H1 2019 2 658 49.2 100.0%

Dividend declared H2 2019 2 614 48.1 92.9%

→ The high LTV ratio limits additional debt funding

→ Trading at a discount to NAV limits potential to raise equity

→ A dividend pay-out policy introduces balance sheet flexibility

→ Introduces a third source of funding

→ Provides consistent NAV growth as retained earnings

are reinvested into property assets

→ Allows raising equity without diluting NAV

→ The pay-out policy goes to the heart of sustainability

→ Withholding is to fund capital expenditure required to

maintain operations

→ There is no distress on the business

→ We have no defensive capital expenditure backlogs

→ A pay-out policy of 90% to 100% aligns us to international

REITS and is pitched at a level that poses no tax risk

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Realising value from sale of non-core assets

Well-considered process to avoid damage to income earning asset base

Asset description Proceeds Strategic motivation for disposal

Local property assets (to be identified) R1.5 billion A number of properties are strong candidates

Respublica

(local student accommodation)R2.5 billion

Limited scope to grow into a significant sector on a relative basis within Redefine’s

domestic asset platform

Journal

(student accommodation in Australia)R3.3 billion

High investor demand and record low asking income yields on established facilities

provides an opportunity to realise capital uplift

Cromwell R0.7 billionResidual investment trading at five year high, which can now be sold CGT-free once

released from Journal development funding encumbrance

Anticipated proceeds R8.0 billion

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Looking ahead

Positioning the asset base to provide a platform for sustained growth

6.5%

7.5%

8.5%

9.5%

10.5%

11.5%

12.5%

13.5%

14.5%

Jan 1

7

Feb

17

Ma

r 17

Apr

17

Ma

y 1

7

Jun 1

7

Jul 17

Aug 1

7

Sep 1

7

Oct 17

No

v 1

7

De

c 1

7

Jan 1

8

Feb

18

Ma

r 18

Apr

18

Ma

y 1

8

Jun 1

8

Jul 18

Aug 1

8

Sep 1

8

Oct 18

No

v 1

8

De

c 1

8

Jan 1

9

Feb

19

Ma

r 19

Apr

19

Ma

y 1

9

Jun 1

9

Jul 19

Aug 1

9

Sep 1

9

Oct 19

Redefine forward yield R186 yield 5 year swap rate

2020 focus

Right-size asset footprint to capital case

Introduce dividend pay-out policy

Drivers of the cost of capital

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Anticipated outcome

Bring LTV ratio back to comfort zone of

35% to 40%

Improve forward yield


Operating efficiently

Delivering quality sustainable earningsSection 04



Phasing out non-recurring income is a key focus

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454 049m2 renewed

at an average reversion

of -2%

Active portfolio margin

maintained at 83.2%

Tenant retention rate

at 93.3%Active portfolio occupancy

decreased to 94.9%

Recurring income growth

of 6.6%Total Solar PV capacity

increased to 23.7 MWp

4 369 4 789 5 141

462438

3324 8315 227 5 473

0

1 000

2 000

3 000

4 000

5 000

6 000

2017 2018 2019

Rm

Distributable income analysis

Recurring Income Non-recurring income

10%

90%

8%

92%

6%

94%


Financial highlights

In pursuit of delivering sustained value to all our stakeholders

52.8 56.268.7 72.4 72.8

11.016.5

15.418.9 22.6

19.3 18.7 23.6 20.8 21.2

4.2 9.311.1 15.7 20.6

0

20

40

60

80

100

120

Local property assets

Local debt (net of cash)

International property assets

International debt


LTV%

Rbn

63.8

23.5

72.7

28.0

84.1

34.7

91.3

36.5

95.4

41.8

Analysis of property assets and debt

36.8% 36.5% 41.1% 40.0% 43.9%

International distributable

income contribution of

26.8%(FY18 | 24.0%)

Net operating cost to

income ratio maintained at

16.9%(FY18 | 16.9%)

Full year distribution per

share up by 4.0% to

101.0 cents(FY18 | 5.5%)

Total distributable

income has grown by

4.7% to R5.5 billion(FY18 | 8.2%)

International investments

constitute 23.7% of the

asset platform

(FY18 | 20.7%)

Total assets now

R102.7 billion up


Market capitalisation at


Local net property income

increased by 5.4% on a

like-for-like basis

(FY18 | 6.0%)

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Simplified distributable income statement

2019Rm

2018Rm

change%

NOI from investment properties 5 245 5 157 1.7%

Sundry and trading income 73 113 (35.4%)

Total revenue 5 318 5 270 0.9%

Administration costs (277) (220) 25.9%

Net operating profit 5 041 5 050 (0.2%)

Net finance charges (1 037) (1 079) (3.9%)

South African distributable income 4 004 3 971 0.8%

International distributable income 1 469 1 256 17.0%

Distributable income 5 473 5 227 4.7%

RmCents per

ShareChange %

2018 distributable income 5 227 97.1

Less 2018 non-recurring income (438) (8.1)

2018 recurring distributable income 4 789 89.0

Less dilution arising from new shares (0.6)

Organic growth 352 6.5

2019 recurring distributable income 5 141 94.9 6.6%

Add 2019 non-recurring income 332 6.1

2019 distributable income 5 473 101.0 4.0%

A purpose-driven strategy delivering quality earnings in a tough operating environment

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Contributors to growth in distributable income

A diversified portfolio absorbs headwinds and provides sustained growth

* Net of funding costs

Rm

Tailwinds

R941 million

Headwinds

(R695 million)

2018distributable

income

Chariot income

increase*

Disposal of GRIT

Active SA portfolio NOI growth

Prior year realised FX

gains

RDI income decrease*

NOI of property disposals

Increased admin costs

2019distributable

income

Journal SAF

EPP income

increase*

Lower net local finance

costs

RDF Europeincome

increase*

NOI ofSA acquired properties

Cromwell & CPT

disposal*

NOI of SA properties

under redevelopment

Oando Wings income

decrease*

Lower sundry income

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Active portfolio income analysis

36%

43%

20%

1%

36%

43%

20%

1%

Relentless focus on containing cost growth below revenue increase

* Properties owned for 12 months in both years

** Net of recoveries

2019

2018

Active portfolio NOI contribution

Office

Industrial

Retail

2019

Rm

2018

Rm

Change

%

Active portfolio revenue* 5 742 5 457 5.2%

Active portfolio costs** (964) (922) 4.6%

Property income from active portfolio 4 778 4 535 5.4%

Net operating income from acquired/development properties 383 459 (16.6%)

Net operating income from disposed properties 84 164 (48.8%)

Net operating income from investment properties 5 245 5 158 1.7%

Active portfolio margin % 83.2% 83.1%

Specialised

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1 083.3

1 047.5

(0.2) (1.3) (1.2) (1.9) (5.7)

(14.9)

(30.1)

(99.0)

89.1

22.9 6.4 0.1

950

1 000

1 050

1 100

1 150

1 200

1 250

Growth in net asset value per share (cents)

Our diversified asset platform is capable of absorbing shocks and providing a platform for sustained growth

2018NAV

Statutory profit excluding

revaluation,forex and

impairments

Revaluation of SA

property portfolio

Forex loss on foreign

denominatedloans

Impairmentof Delta

Distributions paid

2019NAV

NAV increase

of international

assets

Revaluation of hedges and

exchangeable bond

Impairments Other NAV decrease and impairment of

international assets

Forex gain on

international investments

Dilution due to issue of

shares

EUR 1.6

GBP (4.3)

AUD (0.1)

USD 2.9

EUR (3.9)

GBP 2.3

AUD 0.8

USD (0.4)

Journal 12.7

Logistics 6.4

Chariot 2.8

Cromwell 1.0

RDI (11.8)

EPP (8.4)

Wings (9.3)

Grit (0.6)

Goodwill (1.1)

Loans receivable (0.8)

Op

er

atin

g e

ffic

ie

ntly


Looking ahead

Letting reshaped by low levels of confidence and subdued economy - demands a broader source of income

2020 focus

Anticipated outcome

Focus on organic growth

Expand non-GLA income sources

Roll-out solar PV interventions

Pro-active utilities management

Unlock procurement efficiencies

Maintain active portfolio margin

Significantly reduce non-recurring income

Business confidence

Consumer confidence

10

20

30

40

50

60

Overa

ll

Build

ing

contr

acto

rs

Ma

nufa

ctu

ring

New

veh

icle

s

Reta

il

Whole

sale

4Q18 1Q19 2Q19 3Q19

Optimism

Pessimism

Index where 50 = neutral

-5

-2

1

4

7

10

-20

-10

0

10

20

30

2004 2006 2008 2010 2012 2014 2016 2018

FNB/BER CCI

Household spending (RHS)Index %y/y

Source : RMB

Source : RMB

Op

er

atin

g e

ffic

ie

ntly


Engaging talent

Instilling a culture of operational excellenceSection 05



The right people in the right place at the right time

En

ga

gin

g ta

le

nt

Critical thinking

Problem solving

Creativity

Thinking outside the box

Collaboration

Working with others to achieve

a common goal

Communication

How to best convey ideas in a

clear and concise manner

Business processes

restructured to enable

service excellence

200 learners completed

the programme since 2013

Focusing on people

not jobs is the key

to sustainability

Certified as a

Top Employer

Transformation across

all levels in progress

Employee engagement

score of 87% - above

global and local benchmark

The competencies underpinning our DNA


Looking ahead

2020 focus

Anticipated outcome

Instil a culture of innovation and accelerate

transformation

Maintain staff engagement levels

Improved transformation across all levels

Our people are our strategic differentiator

Value distributed R9.5 billion

5 211 2 920

778

327

36261

Shareholders

Providers of debt

Government and regulatory bodies

Employees

Minority interest holders

Distributable income retained

Rm

En

ga

gin

g ta

le

nt


Outlook

In summary, our immediate focus is to

Reduce balance sheet risk

Deliver sustainable quality earnings

Ensure that operational excellence becomes the way

in which we approach everything we do

Live our values to protect and grow our reputation in

every situation

Place people at the heart of what we do

Our purpose-driven strategic approach is appropriate for the environment in which we are operating

39.0 41.7 44.8 47.3 49.2

41.0 44.3 47.2 49.8 51.8

80.086.0 92.0

97.1

0

20

40

60

80

100

120


CPS

Distributable income per share

Interim Final

91

2

94

3

91

3

97

7

94

4

1 0

34

1 0

56

1 0

23

1 0

83

1 0

48

1 1481 102 1066 1 035

600

800

1 000

1 200

1 400


CPS

Net asset value per share growth

NTAV NAV Share price

785

101.0

En

ga

gin

g ta

le

nt

We anticipate distributable income per share for

the 2020 financial year to be in line with 2019


Supplementary information

Section 06


Strategy

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We adopt an agile and uncompromising approach to the way we do business

Our focus is on real estate and related investments – not a particular sector

→ We will continue to build an asset platform that sustains organic growth through:

− Continuously improving, expanding and protecting our domestic portfolio

− Recycling capital through the sale of assets at the end of their investment life cycle

− Unlocking value through active asset management opportunities in offshore markets

− Driving innovative business projects to ensure we remain relevant and futureproof our business

→ We continue to broaden our

interpretation of sustainability,

looking beyond environmental

considerations

→ We continue to deepen our

understanding of our

stakeholders’ needs, while

managing their impact on us

and our impact on them

→ We focus on proactively

managing and enhancing our

reputation in all that we do


Top risks

Uncertainty pertaining to long-term impact of geo-political and socio-economic growth factors

Impact of disruptive technologies

Deteriorating public/state infrastructure and poor administrative delivery locally

Inability to effectively manage our reputation

Financial market volatility

Damage to property and security-related threats

Long-term impact of failing to transform at an acceptable rate

Increased competition for tenants, capital and property assets

Failure to comply with local and international laws and regulations

Misalignment with international partners (in-country)

Inability to be environmentally resilient

Information security resilience

Inability to maintain strong ethical and governance culture

Elevated top risk Unchanged top risk Reduced exposure

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Invest

strategically

Deployed R6.9 billion

into property assets

Property assets under

management expanded

to R95.4 billion

Offshore expansion

totalled R4.3 billion, with

R3.6 billion invested in

Poland

Local development

activity totalled

R2.4 billion

NTAV declined by 33.0

cents per share to

944 cents per share

Optimise

capital

Average cost of debt

decreased by 50bps

to 5.8%

Implemented a dividend

pay-out policyLTV increased to 43.9%

Agreed refinance terms

for all near term debt

maturities

Interest rates hedged on

87.3% of total debt

Operate

efficiently

Active portfolio margin

maintained at 83.2%

Active portfolio

occupancy at 94.9%

Tenant retention rate

at 93.3%

Total solar PV capacity

increased to 23.7MWp

454 049m2 renewed

at an average reversion

of -2%

Engage

talent

200 learners completed

the programme since

2013

Certified as a

Top Employer

Business processes

restructured to enable

service excellence

Employee engagement

score of 87% above

global and local

benchmark

Transformation across

all levels in progress

Grow

reputation

Improved board

independence –

appointed Daisy

Naidoo

International Council of

Shopping Centres Solal

award for Innovation

Challenge

Centurion Mall and

Kyalami Corner won

Gold at Footprint

Marketing Awards 2019

3rd in EY excellence in

integrated reporting

2019

74 Green Star rated

buildings


Outcomes : Positive Negative Neutral

Scorecard by key stakeholder

Snapshot of our value creation scorecard by key stakeholder

A source of sustained growth in total returns for investors and funders

Value creation indicator Value creation outcome

2019 2018

Active portfolio operating margin maintained at 83.2%

Full-year distributable income up 4% to 101 cents (2018: 97.1 cents) per share

Reduction of non-recurring distributable income

Improvement of loan to value ratio

Net tangible asset value per share has decreased by 33.0 cents to R9.44

Total return to shareholders of 7.1% for the year (2018: 17.7%)

Redefine forward yield has increased by 400 bps to 12.9%

Perception score on strategy (consistency on delivery)

Perception score on governance (particularly board independence)

Perception score on disclosure and communication

Moody’s credit rating maintained

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An employer of choice for employees


2019 2018

Annual employee remuneration at R175.3 million (2018: R174.7 million)

5th year accredited Top Employer status

14 486 man hours spent on training and development (2018: 17 728)

Improvement in communication platforms and use of technology

Total staff turnover 11.6% (2018: 10.5%)

Transformation progress across all levels

Ensure fair and responsible remuneration

Staff compliment increased by 4% contributing to the broader South Africa’s job creation agenda

Absorption of learners into formal employment

Employee engagement score of 87% outperforming benchmark N/A

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A differentiated provider of relevant space to tenants


2019 2018

Total gross lettable area (GLA) space provided 4 494 571m2 (2018: 4 874 236m2)

Tenant retention 93.3% (2018: 90.4%)

Occupancy rate maintained at 95.5%

Footfall in shopping centres 5.3% (2018: -2.0%)

Development to uplift capital and improve spaces

Rollout of solar PV

R1.3 million invested at Maponya Mall to address tenant concerns raised through Challenge Convention

R27.8 billion tenant-generated turnover in retail spaces (2018: R26.7 billion)

74 Green Star rated buildings (2018: 44)

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A preferred business partner for brokers and suppliers


2019 2018

Level 3 broad-based black economic empowerment (BBBEE) rating

97% of procurement spend towards empowering suppliers

188 538m2 let by brokers

Leverage procurement efficiencies

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A responsible community participant


2019 2018

R8 million contribution to community engagement (through CSI and the second Challenge Convention)

233 stakeholders engaged with the second Challenge Convention at Maponya Mall

599 of mentees matched to mentors under The Mentorship Challenge

Health and Safety scores improved

Carbon emissions savings from our solar installations for the year equate to taking circa 6 300 passenger

cars off the road

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Debt funding profile

3.4

2.1

6.8

8.2

6.5

2.9

1.6

5.9

2.9

5.7 6.6

8.0

00

2

4

6

8

10

2020 2021 2022 2023 2024 2025 2026

Maturity of South African debt

Debt Hedges

73% 71%

58%

68% 70%66%68%

60%53%

63%67% 65%

0%

20%

40%

60%

80%

FY14 FY15 FY16 FY17 FY18 FY19

Secured debt / secured assets

Secured debt Secured assets

%

36.6

47.156.4

60.465.9 68.1

01020304050607080


Equity headroom for the unsecured lender

33%27%

35% 36% 35%42%

0%

10%

20%

30%

40%

50%


Unsecured debt / unencumbered assets

%

Rbn

Rbn

2.9

1.3

5.3

3.7 3.7 3.5

0.2

2.5

0.9

3.2 3.9

5.7

0

2

4

6

2020 2021 2022 2023 2024 2025 2026

Maturity of foreign debt

Debt Hedges

Rbn

0%

0%

2%

0%

4%

2%

1%

5%

12%

3%

6%

0%

4%

6%

8%

12%

0%

1%

2%

2%

3%

4%

4%

4%

4%

4%

5%

15%

16%

RMB Offshore

mBank

Commercial paper

Pekao

RMB

Liberty

National Bank of Australia

Nedbank

Standard Bank

Investec

Exchangable bond

Standard Bank IOM

ING Bank

Standard Chartered

ABSA

Listed Bonds

Sources of debt (%)

FY19

FY18

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Analysis of non-recurring income

2019

Rm

2018

Rm

Chariot trading income 200 54

Land trading profit 39 41

EPP prior year WHT 31 -

Realised foreign exchange gains 28 70

Bonus provision "saving" 20 15

Lease cancellation /property once off gains 14 163

Dipula profit share - 52

Oando debt raising fee - 27

EPP guarantee fee - 16

Total 332 438

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Active portfolio expenditure analysis

Rm % change

Year end August 2018 922

Net municipal costs in line with prior year due to focused recovery strategies (0) -0.3%

Net electricity costs improved as a result of improved vacancy rate and associated recoveries (7) 5.9%

Operating costs increase in line with legislative and contractual obligations 27 7.3%

Repairs and maintenance decreased due to prior year planned preventative maintenance strategies bearing fruit (4) -3.5%

Tenant installation (TI) costs are deal driven and reflective of a decreased vacancy rate 10 20.3%

Letting commissions are deal driven 1 5.3%

Management fees reduction due to the insourcing of certain property management functions (5) -13.2%

Bad debts provided for on a specific basis and is reflective of the challenging economic environment 17 37.5%

Property admin costs increased marginally due to cost reduction strategies 2 0.9%

Year ended August 2019 964 4.5%

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Local active portfolio revenue growth

Active portfolio revenue growth Office Retail Industrial Specialised Total

Active portfolio average rental escalation 8.0% 7.0% 7.8% 8.8% 7.5%

Renewal plus new lets net of expiries -3.0% -2.4% -1.9% 0.1% -2.4%

Growth in rental income 5.0% 4.6% 5.9% 8.9% 5.1%

Growth in other income 0.3% 0.1% 0.1% 0.0% 0.1%

Growth in 2019 property revenue 5.3% 4.7% 6.0% 8.9% 5.2%

Active portfolio NOI growth 5.8% 4.1% 6.0% 8.8% 5.4%

Total vacancy August 2018 % 16.0% 5.8% 1.2% 3.0% 6.9%

Total vacancy August 2019 % 13.4% 4.8% 1.8% 8.3% 6.0%

Vacant properties under redevelopment 2.3% 0.1% 0.0% 0.0% 0.6%

Vacant properties held-for-sale 0.9% 0.1% 0.0% 0.0% 0.3%

Active vacancy August 2019 10.2% 4.6% 1.8% 8.3% 5.1%

Net letting activity post August 2019 -0.2% 0.3% 1.1% 0.0% 0.5%

Current vacancy 10.4% 4.3% 0.7% 8.3% 4.6%

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International income analysis

2019

Rm

2018

Rm

EPP N.V. 874 607

Cromwell Property Group 46 311

Chariot 350 109

RDI REIT PLC 203 265

Redefine Europe 189 22

CPT - Northpoint - 80

Oando Wings 82 89

GRIT 14 24

Journal 13 (9)

Other 8 5

Realised foreign gains 28 70

Total foreign income 1 808 1 574

USD funding expense (26) (24)

GBP funding expense (123) (107)

EUR funding expense (149) (101)

AUD funding expense (41) (88)

Total foreign funding expense (339) (320)

Total net foreign income 1 469 1 254

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UK Europe Australia AfricaTotal

internationalRDI EPP ChariotRDF

EuropeCromwell Journal Other GRIT

Oando

Wings

Contractual rental income - - - 434 197 - 91 676 - - - 525 873

Investment income - - - - 44 753 - 1 133 18 061 - 63 947

Total revenue - - - 434 197 44 753 91 676 1 133 18 061 - 589 820

Operating costs - - - (169 622) - (41 192) - - - (210 815)

Administration costs (424) (1 273) (10 310) (56 738) (535) (25 730) - - (848) (95 857)

Net operating profit (424) (1 273) (10 310) 207 837 44 218 24 754 1 133 18 061 (848) 283 148

Other gains 351 - 40 185 83 - - - - - 40 619

Distributable equity income 231 454 843 927 - - 3 680 - - - - 1 079 061

Net distributable profit before finance costs and taxation 231 381 842 654 29 875 207 920 47 898 24 754 1 133 18 061 (848) 1 402 828

Net interest costs (123 165) (148 480) 49 702 (35 132) (41 291) (10 116) 8 445 - 59 198 (240 839)

- Interest income - - 52 316 - - 156 8 445 - 85 337 146 254

- Interest expense (123 165) (148 480) (2 614) (35 132) (41 291) (10 272) - - (26 139) (387 093)

Distributable foreign exchange gain 27 617 - - 10 830 - - - - - 38 447

Net distributable profit before taxation 135 833 694 174 79 577 183 618 6 607 14 638 9 578 18 061 58 350 1 200 436

Current and withholding taxation (27 878) 31 487 - (4 424) (1 877) - (1 196) - (2 945) (6 833)

Net income from operations before NCI share 107 955 725 661 79 577 179 194 4 730 14 638 8 382 18 061 55 405 1 193 603

NCI share of distributable income - - - (8 166) - (1 464) - - - (9 630)

Net income before distributable adjustments 107 955 725 661 79 577 171 028 4 730 13 174 8 382 18 061 55 405 1 183 973

Below the line distributable income adjustments: - -

- Accrual for listed security income - - - - (260) - - (4 092) - (4 352)

- Transaction costs relating to business acquisitions - - - 18 192 - - - - - 18 192

- Other distributable income - - 270 833 - - - - - - 270 833

Distributable income 107 955 725 661 350 410 189 220 4 470 13 174 8 382 13 969 55 405 1 468 646

International segmental analysis

Values are rounded to the nearest R'000

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Income hedging position by currency

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2020 2021 2022 2023 2024 2025

EUR

EUR amount (€m) 42.0 24.5 18.0 18.0 12.0 2.5

FEC rate (R: €1) 18.0 19.7 20.9 22.6 23.7 24.6

GBP

GBP amount (£m) 12 9.5 3.5 - - -

FEC rate (R: £1) 20.0 20.6 20.7 - - -

AUD

AUD amount (A$m) 4.0 - - - - -

FEC rate (R: A$1) 11.7 - - - - -


Reconciliation of cash generated to total distributable income

2019R000

Net cash inflow from operating activities (as per statement of cashflows) 4 624 774

Items in cash flow from operating activities, but not related to distributable income 279 217

Working capital changes 299 688

Increase in trade receivables (43 784)

Decrease in trade payables (255 904)

Merger costs 20 709

Capital gains tax (41 180)

Non-cash flow items included in distributable income (78 394)

Realised foreign exchange gain 27 879

Amortisation of tenant installations and letting commissions (85 150)

Depreciation on property, plant and equipment (23 730)

Share incentive schemes – difference between accrual and payment 2 607

Adjustments to distributable income, not included in IFRS statement of profit and loss 316 516

Antecedent distribution on shares issued during the year 6 770

Chariot (shown under investing activities) 270 832

Trading profit (included in P & L but shown under investing activities) 38 914

Timing differences 366 764

Equity-accounted investments (net of withholding tax) - difference between dividend received and dividend accrual 200 530

Taxation - difference between income and withholding taxation accrued not yet paid / received 13 768

Delta - difference between interest accrual and distribution received 91 204

Listed investment (Cromwell) – difference between dividend received and dividend accrual (260)

Listed investment (GRIT) – difference between dividend received and dividend accrual (4 092)

Interest income – accrued not yet received 162 185

Interest expense – accrued not yet paid (96 571)

Non-controlling interest share of distributable income (36 242)

Distributable income for the year 5 472 635

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Reconciliation of property assets

Rm

August 2018 property asset platform 91 335

Deployment of capital 6 292

Disposals (1 634)

Impairments (393)

Fair value adjustments 904

Foreign exchange adjustments (44)

Net equity accounted profit (1 103)

Interest raised 216

Interest settled (139)

August 2019 property asset platform 95 434

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Property portfolio 100.0% R70.0bn

Retail R28.8bn

Office R25.4bn

Industrial R13.8bn

Specialised R2.0bn

Respublica 53.4% R1.3bn

Loans receivable and investment in securities*

R1.5bn

R72.8bn

Redefine’s diversified property asset platform

Portfolio valued at R95.4 billion

Direct local property portfolio Direct international properties International listed securities

RDI REIT PLC 29.4% R2.8bn

Cromwell Property Group 2.3% R0.9bn

EPP N.V. 45.4% R9.0bn

R12.7bn

Journal Student Accommodation Fund 90.0% R2.8bn

Oando Wings Development Limited 40.6% R0.4bn

European Logistics Platform 95.0% R5.8bn

Chariot Top Group BV 25.0% R0.9bn

R9.9bn

76%

4%

0%3%

17%

South Africa

Australia

Africa

UK

Poland

Geographic spread by value

Carried at fair value Equity accounted

*Includes Edcon and Delta

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Local investment strategy

Diversify exposure across traditional

sectors

Exposure to key economic nodes

Locations that have solid

infrastructure to reduce leasing risk

Lower tenant risk an improve profile

Continue to expand and improve existing well-located properties through development

Invest in younger (more efficient), well-located and better-quality properties with

longer leases and A-grade tenants

Recycle non-core assets to position the portfolio for sustained organic growth

Continued implementation of long-term strategy on an asset-by-asset basis

Selective acquisitions in under-represented regions and to complement existing

assets

Investment criteria Our focus

Placed on hold until capital markets and loan-to-value ratio normalise

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Retail portfolio

Market

→ South African shopping centre year-on-year trading density growth of 5.6% as at June 2019

→ Continued pressure on total cost of occupation - pushback on rentals and escalations

→ Retailers continue to focus on ‘right sizing’

→ Banks reducing their footprint in shopping centres

→ Entertainment and food are key drivers of footfall and spend

→ Administered costs impacting margins of tenants and owners

→ Security, parking charges and convenience will have greater influence on shopping behaviour

→ Co dependency of physical retail and online shopping platforms

Activity

→ No acquisitions during the period

→ Disposed of four non-core properties for R283.8 million

→ Concluded development of Centurion Lifestyle Walk, Park Meadows Builders Express, Brackengate Planet Fitness and Little Falls Leroy Merlin for a total of R415.5 million

→ Increased entertainment and restaurant offering at larger malls

→ Edcon exposure reduced by 11 474m² to 71 223m² at August with a potential further reduction of 8 961m² by end Dec 2019

→ Centurion Mall redevelopment complete at a cost of R1.06 billion

→ Soft refurbishments and major tenant reconfigurations were completed at Horizon, Boulders and Besterbrown

Priorities

→ Occupancy management

→ Tenant retention and early lease renewal of key retailers

→ Completion of soft refurbishments and major tenant reconfigurations at Kenilworth, Sammy Marks, Centurion Lifestyle and Goldfields

→ Further reduction of space with Edcon

→ Driving sales growth to support rental levels

→ Continued focus on underperforming assets

→ Management of administered costs

→ Sustainability initiatives such as water efficiency, waste management and renewable energy solutions

→ Innovative entertainment offering (gaming, pause areas and sporting facilities)

→ Limit operating cost growth

→ Strategic approach to security

→ Reconfiguring banking malls

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Retail asset optimisation initiatives

Expanding Protecting Improving Improving

Wilgespruit (Little Falls)

GLA 19 665m²

Phase 1 completed March 2019 with

installation of Leroy Merlin

(17 000m²) and Decathlon (2 665m²)

Assessing viability of Phase 2

8 000m² to 10 000m², convenience retail

shopping centre

Cost R298 million

Centurion Lifestyle Centre

GLA 62 297m²

Refurbishing and enclosing Checkers

mall

Reconfiguring traffic flow to improve the

access to the parking deck and improving

tenant mix by adding restaurants and

lifestyle tenants

Cost R68 million

Kenilworth Centre

GLA 53 179m²

Refurbishment of ground floor mall (tiles,

columns, walls, ceilings and lighting) to

align to upper level completed in 2017

Terminated Edgars lease and replaced

with Dis-Chem, Mr Price and various line

stores

Occupation October 2019

Cost R25.8 million

Sammy Marks Square

GLA 35 795m²

Improving the fashion component by

expanding Foschini and Truworths and

adding G-Star and Fabiani. Also adding a

new McDonalds together with upgrade of

the square

Improving the non-GLA offering with the

addition of a digital screen

Cost: R22 million

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Office portfolio

Market

→ Continued increase in vacancy with pressure on rentals and escalations

→ Increases in administered costs impacting total cost of occupation

→ Demand is driven by consolidation, densification, public transport and parking

→ Space densification is driving up operating costs and increasing pressure on infrastructure

→ P-grade and high end A-grade properties remain in demand in key nodes

→ Co-working environments have become a market disruptor

→ Third party tenant representation growing aggressively through broker involvement

→ The cost of retaining and securing a tenant continues to increase

Activity

→ No acquisitions during the period and unlikely for the foreseeable future

→ Completed development of Rosebank Link (100% let) and 2 Pybus (75% let) at a cost of R1.3 billion

→ Disposed of eleven non-core properties for R613.5 million

→ Continued rejuvenation of smaller properties

→ Continued focus on deepening tenant and broker relationships

→ Green star rated buildings increased to 73

→ Solar PV and sustainability rollout of 2408kWp with pipeline of 169 kWp

→ Installation of WeWork at Rosebank Link

→ Sub-division of vacant space to allow smaller user flexibility

Priorities

→ Tenant retention and reducing vacancies remains our top priority

→ Completion of 155 West street and Knowledge Park redevelopments at R653.6 million

→ Disposal of non-core assets

→ Continue to strengthen relationships with third-party brokerages

→ Extend lease profile

→ Management of WeWork leases

→ Development focus to improve building densification and improve parking ratios

→ Sustainability initiatives such as water efficiency and waste management

→ Continue to increase number of green star rated buildings

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Office asset optimisation initiatives

Expanding Protecting Improving

2 Pybus Road Knowledge Park I Clearwater Office Park Hillcrest Office Park Silverstream Office Park

GLA: 12 903m²

Completion: December 2018

Tenants: Group 1 advocates, Rivonia group of advocates

A premium grade development in the heart of Sandton in close proximityto Gautrain

Development cost: R475.5 million

GLA: 6 200m²

Previously occupied by Discovery

Full internal and external refurbishment

with projected completion January 2020

Cost: R38 million

GLA: 19 620m²

The external facades and

common spaces for 2 of the

6 buildings are upgraded

to remain ahead of

market conditions

GLA: 21 661m²

The park was refurbished to

an A Grade specification

Allowing subdivision for

smaller tenants

GLA: 16 811m²

The bathrooms and foyers are

being upgraded in line with

renewal requirements for

Publisis (6 000m2)

Total cost: R60 million

The A grade offices are being refreshed to achieve competitive rentals

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Industrial portfolio

Market

→ Limited rental growth with pressure to sign shorter leases

→ Policy uncertainty causing erratic demand for new premises

→ Failing municipal infrastructure contributes to rising vacancies in older industrial nodes

→ Increases in administered costs adding pressure to rental growth

→ Larger logistics operators are taking advantage of competitive market rates

→ International data and web service providers investing in new facilities in Gauteng and the Western Cape

→ Continued threat of Eskom load-shedding

→ Delays in town planning processes impacting development opportunities

→ Gauteng development environment is extremely competitive

Activity

→ Completed development of Hirt & Carter (Cornubia) and Brights (Brackengate 2) for a cost of R236.5 million

→ Acquired property to the value of R135.8 million

→ Disposed of two non-core properties for R147.4 million and land of 177 067m² for R191.3 million

→ S&J Industrial Estate Spec Building as well as the new Massmart DC at Brackengate 2 are under development at a cost of R342.8 million

→ Infrastructure development at S&J Industrial Estate, Atlantic Hills and Brackengate 2 are in progress at a cost of R721 million

→ Installing six solar PV projects with a first year generation capacity of 4 million KWh at a projected weighted yield of 16%

→ Water security projects were fully commissioned in the Western Cape and similar projects are under investigation in Gauteng

Priorities

→ Tenant retention and reduction of vacancy is our top priority

→ Focus on relationships with corporate real estate representatives

→ S&J Industrial Estate - finalise town planning processes

→ Continued efforts to dispose of non-core assets and land holdings

→ Implementation of power, water and waste management projects

→ Improve aesthetics, functionality and efficiency of mini parks to attract tenants

→ Focus on product differentiation

→ Leasing of Robor (Isando) property measuring 120 000m²

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Industrial asset optimisation initiatives

Expanding Protecting Protecting Improving

Brights Hardware,

Brackengate 2

GLA:13 605m²

Easy access off the R300 freeway via

Bottelary Road

New flagship facility for the Western

Cape based Hardware chain

Occupation June 2019

Total cost: R100 million (RDF 50.1%)

Wingfield Park, Jet Park

GLA: 56 486m²

Conveniently located within 5km of O.R

Tambo international airport

General refurbishment of roofs, road

resurfacing, fire sprinkler system and

electrical ring main improvement

Cost: R7.4 million

190 Barbara Road,

Elandsfontein

GLA: 24 398m²

Central within the Tunney/Elandsfontein

industrial node

Reorientation of access within the yards

to improve vehicle circulation

Cost: R690 000

Jupiter Ext 1, Germiston

GLA: 11 508m²

Completion: October 2019

Adjacent to Geldenhuys interchange.

New roof overlay, expanding the truck

yard by 5 460m². Improvements to N3

facing façade

Cost: R5.36 million

S&J??

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Local portfolio overview

Description Office Retail Industrial Specialised 2019 2018

Number of properties 107 74 105 16 302 315

Number of tenants 1 116 3 126 402 10 4 654 4 967

Total GLA (m²) (million) 1.2 1.4 1.8 0.0 4.5 4.6

Vacancy (%) active 10.2 4.6 1.8 8.3 5.1 4.5

Vacancy (%) held-for-sale and development 3.2 0.2 0.0 0.0 0.9 2.4

Vacancy (%) total 13.4 4.8 1.8 8.3 6.0 6.9

Asset value (R billion) 25.4 28.8 13.8 3.3 71.3 69.7

Average property value (R million) 237 389 131 205 236 221

Value as % of portfolio 35.6 40.4 19.3 4.6 100.0 100.0

Average gross rent per m² (R) 162.1 165.4 55.7 194.7 118.4 112.3

Weighted average retention rate by GLA 91.4 94.1 93.8 96.0 93.3 90.4

Weighted average retention rate by GMR 91.6 92.7 92.2 94.8 92.2 89.4

Weighted average renewal growth rate (%) (2.0) (1.8) (3.6) 0.0 (2.0) (1.5)

Renewal success rate by GLA (includes monthly leases) 71.3 82.3 68.8 0.0 73.5 0.0

Renewal success rate by GLA (excludes monthly leases) 56.7 72.0 65.7 0.0 64.8 0.0

Weighted average inforce lease escalations by GMR (%)* 7.7 6.9 7.5 8.8 7.3 7.4#

Weighted average unexpired lease term (remaining) by GMR (years)** 3.7 3.1 4.9 1.9 3.7 3.7#

* Excludes expired but active leases and leases expiring within one year

** Excludes expired but active leases

# Restated with new method of calculation

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Portfolio split

DescriptionValuation

(R000)Value

(%)Number of properties

Number of properties (%)

GLA (m²)

GLA (%)

GMR (R000)

GMR (%)

Sector

Office 25 398 882 36% 107 35% 1 249 501 28% 175 296 35%

Retail 28 809 375 40% 74 25% 1 399 221 31% 220 282 44%

Industrial 13 763 583 19% 105 35% 1 816 064 40% 99 315 20%

Specialised 3 284 499 5% 16 5% 29 785 1% 5 317 1%

Grand total 71 256 339 100% 302 100% 4 494 571 100% 500 210 100%

Province

Gauteng 52 071 714 73% 211 70% 3 193 848 71% 355 960 71%

Western Cape 12 438 961 18% 47 16% 691 900 16% 86 473 17%

KwaZulu-Natal 3 062 299 4% 20 6% 284 125 6% 26 394 6%

Other 3 683 365 5% 24 8% 324 699 7% 31 382 6%

Grand total 71 256 339 100% 302 100% 4 494 571 100% 500 210 100%

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Local sectoral split

36%

40%

19%

5%BY VALUE (%)

28%

31%

40%

1%BY GLA (%)

35%

44%

20%

1%BY GMR (%)

35%

25%

35%

5%BY NUMBER OF PROPERTIES (%)

Office

Retail

Industrial

Specialised

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Local geographical split

73%

18%

4%5%

BY VALUE (%)

71%

16%

6%

7%BY GLA (%)

71%17%

6%

6%BY GMR (%)

70%

16%

6%8%

BY NUMBER OF PROPERTIES (%)

Gauteng

Western Cape

KwaZulu-Natal

Other

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Local retail sector

16%

35%37%

6%

6%BY VALUE (%)

9%

31%

41%

10%

9%BY GLA (%)

8.6%

3.5% 3.9%

9.9%

1.5%

Super regional Regional Community / Smallregional

Neighbourhood Other

BY ACTIVE VACANCY 4.6%

14%

33%

40%

7%6%

BY GMR (%)Super regional

Regional

Community / Small regional

Other

Neighbourhood

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75%

23%

1% 1%VALUE BY LOCATION (%)

Local office sector

51%

34%

15%

VALUE BY GRADE (%)

3.3%

12.9%

17.3%


74%

23%

1%2%

GMR BY LOCATION (%)

Premium

A Grade

Secondary

Gauteng

Western Cape

KwaZulu-Natal

Other

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48%

16%

25%

10%1%

BY GLA (%)

Land

Big box retailer

Local industrial sector

46%

14%

22%

7%

1%

10%BY VALUE (%)

50%

17%

21%

11%1%BY GMR (%)

Warehousing / Logistics

Industrial units

Light manufacturing

Heavy grade industrial

1.7%

9.5%


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Local vacancy profile

Office

GLA m²

Retail

GLA m²

Industrial

GLA m²

Specialised

GLA m²

Total

GLA m²

Gauteng 138 255 42 526 26 952 2 481 210 214

Western Cape 15 549 837 5 077 0 21 463

KwaZulu-Natal 2 295 3 542 1 129 0 6 966

Other 11 809 20 177 0 0 31 986

Total 167 908 67 082 33 158 2 481 270 629

Vacancy % 13.4 4.8 1.8 8.3 6.0

Active vacancy, excluding held-for-sale or under development 10.2 4.6 1.8 8.3 5.1

Total GLA 1 249 501 1 399 221 1 816 064 29 785 4 494 571

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Local tenant grading

70%

18%

12%OFFICE (%)

81%

12%

7% INDUSTRIAL (%)

75%

13%

12%RETAIL (%)

Grade A

Grade B

Grade C

76%

14%

10%TOTAL (%)

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Local lease expiry profile by GMR

0

10 000

20 000

30 000

40 000

50 000

60 000

Monthly 2020 2021 2022 2023 2024 Beyond2024

Thousands

GMR

Total GMR: R500 209 842

Office Retail Industrial Specialised

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Office Retail Industrial Specialised Total

Monthly 12 242 985 9 695 166 1 197 092 - 23 135 243

2020 29 114 099 40 710 115 9 320 878 31 939 79 177 031

2021 21 920 095 41 419 725 12 686 700 5 262 037 81 288 557

2022 29 280 359 47 084 093 18 229 119 23 053 94 616 624

2023 14 701 465 28 129 972 7 004 692 - 49 836 129

2024 20 218 667 26 691 679 2 780 584 - 49 690 930

Beyond 2024 47 818 013 26 551 304 48 096 012 - 122 465 329

Total GMR 175 295 683 220 282 054 99 315 077 5 317 029 500 209 842


Local lease expiry profile by GLA

Office Retail Industrial Specialised

0

100

200

300

400

500

600

700

800

900

1 000

Monthly 2020 2021 2022 2023 2024 Beyond2024

Vacancy

Thousands

GLA

Total GLA: 4 494 571m²

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Office Retail Industrial Specialised Total

Monthly 97 528 47 587 15 454 160 568

2020 171 244 186 029 148 767 93 506 133

2021 135 281 217 302 206 091 27 130 585 804

2022 185 741 254 497 282 745 81 723 064

2023 100 018 175 497 144 096 419 611

2024 129 204 189 626 45 310 364 139

Beyond 2024 262 578 261 602 940 443 1 464 623

Vacancy 167 908 67 082 33 158 2 481 270 629

Total GLA 1 249 501 1 399 221 1 816 064 29 785 4 494 571


Property RegionValue

(R000) GLA m² Tenant GLA m² GMR (R)

Centurion Mall Gauteng 4 705 834 119 035 Macsteel 552 641 26 559 637

Alice Lane Gauteng 3 257 288 78 665 Pepkor 224 614 22 290 941

115 West Street Gauteng 1 690 000 41 091 Government 178 315 24 380 570

Blue Route Mall Western Cape 1 688 319 56 145 Shoprite 153 270 14 734 733

Black River Western Cape 1 585 900 71 579 Robor 120 277 4 816 434

Kenilworth Centre Western Cape 1 477 800 53 433 Pick n Pay 102 040 10 268 751

East Rand Mall (50% share) Gauteng 1 455 000 34 201 Edcon 94 643 12 165 489

Golden Walk Gauteng 1 408 100 45 214 Woolworths 93 937 8 377 992

90 Rivonia Road Gauteng 1 195 904 39 964 Massmart 91 644 9 649 294

Stoneridge Centre Gauteng 1 189 000 67 816 Standard Bank 54 870 10 769 716

Total top 10 properties 19 653 145 607 143 Total top 10 tenants 1 666 251 144 013 557

Balance of portfolio 51 603 194 3 887 428 Balance of portfolio 2 828 320 356 196 285

Total portfolio 71 256 339 4 494 571 Total portfolio 4 494 571 500 209 842

% of total portfolio 27.6% 13.5% % of total portfolio 37.1% 28.8%

Local top 10 properties and tenants of total portfolio

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Centurion Mall Gauteng 4 705 834 119 035 Shoprite 121 563 12 890 188

Blue Route Mall Western Cape 1 688 319 56 145 Pick n Pay 102 040 10 268 751

Kenilworth Centre Western Cape 1 477 800 53 433 Edcon 71 223 11 002 390

East Rand Mall (50% share) Gauteng 1 455 000 34 201 Woolworths 66 326 5 307 603

Golden Walk Gauteng 1 408 100 45 214 Pepkor 59 515 11 474 835

Stoneridge Centre Gauteng 1 189 000 67 816 Massmart 55 663 6 999 720

Matlosana Mall North West 1 163 649 65 000 Mr Price 46 200 9 184 088

Centurion Lifestyle Centre Gauteng 1 138 900 62 297 Foschini 42 889 10 909 003

The Boulders Shopping Centre Gauteng 997 622 48 310 Adeo (SA) 33 673 2 190 959

Maponya Mall (51% share) Gauteng 911 637 36 453 Virgin Active (SA) 30 617 5 405 414

Total top 10 retail properties 16 135 861 587 904 Total top 10 retail tenants 629 719 85 632 951

Balance of portfolio 12 673 514 811 317 Balance of portfolio 769 512 134 649 103


% of total retail portfolio 56.0% 42.0% % of total retail portfolio 45.0% 38.9%

Local top 10 retail properties

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Alice Lane Gauteng 3 257 288 78 665 Government 126 237 17 091 972

115 West Street Gauteng 1 690 000 41 091 Standard Bank 46 783 8 361 279

Black River Western Cape 1 585 900 71 579 Alexander Forbes 44 611 11 665 792

90 Rivonia Road Gauteng 1 195 904 39 964 Webber Wentzel 34 883 6 160 121

The Towers Western Cape 1 177 000 59 372 Bowman Gilfillan 29 957 7 437 111

Wembley Office Park Western Cape 808 900 33 626 Santam 22 162 3 716 319

Boulevard Office Park Western Cape 774 100 31 816 Nedbank 20 337 3 935 391

Rosebank Link Gauteng 718 155 22 277 Amazon Development Centre (SA) 20 130 3 645 066

90 Grayston Drive Gauteng 559 300 19 894 Murray & Roberts 19 309 2 073 108

Riverside Office Park Gauteng 555 492 27 284 Medscheme Holdings 14 397 2 379 903

Total top 10 office properties 12 322 039 425 568 Total top 10 office tenants 378 806 66 466 062

Balance of portfolio 13 076 841 823 933 Balance of portfolio 870 695 108 829 621


% of total office portfolio 48.5% 34.1% % of total office portfolio 30.3% 37.9%

Local top 10 office properties

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Pepkor Isando Western Cape 890 700 107 017 Macsteel 552 641 26 559 637

Robor Gauteng 775 200 120 277 Pepkor 165 099 10 816 107

Macsteel Lilianton Boksburg Gauteng 676 100 73 071 Robor 120 277 4 816 434

Hirt & Carter Cornubia Gauteng 591 900 47 718 Hirt and Carter (SA) 47 718 4 262 183

Macsteel Coil Processing Wadeville North West 402 900 52 886 Isuzu Motors (SA) 38 515 2 077 685

Macsteel VRN Roodekop Gauteng 386 300 57 645 Kintetsu World Express (SA) 35 358 1 975 071

Cato Ridge DC Gauteng 360 000 50 317 Massmart 32 355 2 270 781

Macsteel Tube & Pipe Usufruct Gauteng 358 500 68 822 Shoprite 30 148 1 679 352

Macsteel Trading Germiston South Free State 328 700 56 495 Coricraft Group 24 253 1 092 715

Wingfield Park Gauteng 286 500 56 486 Ciba Packaging 23 803 1 861 606

Total top industrial properties 5 056 800 690 734 Total top 10 industrial tenants 1 070 167 57 411 571

Balance of portfolio 8 706 783 1 125 330 Balance of portfolio 745 897 41 903 507

Total portfolio 13 763 583 1 816 064 Total portfolio GLA 1 816 064 99 315 078

% of total industrial portfolio 36.7% 38.0% % of total industrial portfolio 58.9% 57.8%

Local top 10 industrial properties

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(R000)

S & J Industrial (90% share) Gauteng 806 931

Brackengate 2 Mainland Western Cape 298 433

Galleria (90% share) Gauteng 217 232

Atlantic Hills (55% share) Western Cape 163 649

Cornubia Ptn 18 KwaZulu-Natal 52 402

Boulevard Annex-CPT Western Cape 39 728

Loftus Park Hotel (25% share) Gauteng 32 677

Centurion Junction (25% share) Gauteng 26 950

Masingita Mall (40% share) Gauteng 24 103

Wonderboom Junction Phase 2 Gauteng 24 047

Total undeveloped land 1 686 152

Balance of portfolio -

Total portfolio 1 686 152

% of total undeveloped land 100.0%

Local undeveloped land

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(R000) GLA m²

Bedford Gardens Hospital Gauteng 349 800 12 817

Southern Sun O.R Tambo International Airport Gauteng 35 940 14 153

Total top specialised properties 385 740 26 970

Balance of portfolio 2 898 759 2 815

Total portfolio 3 284 499 29 785

% of total specialised portfolio 11.7% 90.5%

Local specialised properties

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Property Region

Value

(R000) GLA Beds

Hatfield Square Gauteng 855 008 2 815 2 331

Peasons and Princeton House Gauteng 587 234 - 1 846

Saratoga Village Gauteng 254 880 - 1 078

Roscommon House Western Cape 240 933 - 582

West City Gauteng 143 112 - 1 134

Lincoln House Free State 113 270 - 469

Yale Village Gauteng 106 031 - 330

Urban Nest Gauteng 62 742 - 300

The Fields Gauteng 59 063 - 308

55 Empire Road* Gauteng 35 807 - -

Paton House* KwaZulu-Natal 12 667 - -

2 470 747 2 815 8 378

Local student accommodation

As at 31 August 2019, the student accommodation portfolio had an average occupancy of 83.7% (FY18: 91.7%)

* Held for future development

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Disposals – Investment property

* 25% of the Loftus Hotel was disposed after development before operations commenced

** Land sales do not have GLA or yields

Property Province

Date

of transfer GLA (m²)

Proceeds

(R000) Yield (%)

Retail 31 153 283 816 8.9%

China Town Ottery Western Cape 23-Oct-18 8 227 85 706 9.3%

Standerton Centre Mpumalanga 10-Dec-18 6 573 51 333 10.8%

Riverhorse Valley KwaZulu-Natal 04-Jul-19 12 490 137 077 8.4%

Southern Motors Gauteng 10-Jul-19 3 863 9 700 2.5% Office 105 834 613 483 7.5%

Jewel City Gauteng 14-Nov-18 42 531 178 000 10.1%

Allhart Office Park Gauteng 07-Dec-18 4 668 30 000 7.9%

The Ambridge Gauteng 28-Feb-19 4 949 44 145 10.0%

Fedsure Forum Gauteng 08-Apr-19 28 721 197 737 0.9%

Delmat House KwaZulu-Natal 17-May-19 4 187 33 309 17.0%

Kent House KwaZulu-Natal 17-May-19 2 774 23 261 16.9%

The Ridge KwaZulu-Natal 17-May-19 1 013 9 062 11.9%

Odyssey Place KwaZulu-Natal 17-May-19 2 100 18 193 13.4%

BDO House KwaZulu-Natal 17-May-19 2 214 20 214 11.5%

Sevenfold KwaZulu-Natal 17-May-19 670 6 064 13.6%

Surrey Place Gauteng 26-Aug-19 12 007 53 498 6.5% Industrial 23 089 147 381 9.3%

26 - 28 Christian Avenue Western Cape 15-Mar-19 13 727 75 844 9.2%

Platinum Park Western Cape 28-Jun-19 9 362 71 537 9.3%

Specialised - 45 459

Loftus Hotel* Gauteng 30-Nov-18 - 45 459 -

Industrial land - 58 752

Cornubia - Portion 22 of Erf 28** KwaZulu Natal 08-Jan-19 - 24 372 -

Cornubia - Portion 17 of Erf 28** KwaZulu Natal 09-May-19 - 34 380 -

UK townhouses - 27 246

Grand total 160 076 1 176 137 8.2%

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Disposals - Held for trading

Property Province

Date

of transfer

Proceeds

(R000)

Specialised 114 260

Park Central Gauteng Various 114 260

Industrial land 132 554

Stikland Western Cape Various 26 525

Atlantic Hills (55%) Western Cape 03-Jan-19 48 216

Brackengate - Amazon Western Cape 30-Aug-19 57 813

Grand total 246 814

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Acquisitions

Property Province Sector

Date

of transfer GLA (m²)

Purchase

Price

(R000) Yield (%)

Industrial 17 215 135 866 9.7%

Torre Modderfontein Gauteng Industrial 16-Nov-18 9 381 80 000 9.9%

JD Rosslyn (50%)** Gauteng Industrial 05-Feb-19 7 834 50 000 9.5%

Atlantic Hills – Land (55%)* Western Cape Industrial 21-May-19 - 5 866 -

Student accommodation 33 000

55 Empire Road* Gauteng Specialised 06-Dec-18 - 33 000 -

International 434 694

Bielsko Land* Poland Industrial 23-Oct-18 - 120 671 -

Lublin Land* Poland Industrial 04-Jan-19 - 38 069 -

Warsaw Land* Poland Industrial 21-Mar-19 - 136 675 -

Opole Land* Poland Industrial 30-Jul-19 - 66 644 -

Gdansk Land* Poland Industrial 31-Jul-19 - 72 635 -

Grand total 17 215 603 560

* Held for future development

** Also known as 14 Piet Rautenbach Street

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Non-current assets held for sale

Property Province Sector GLA (m²)

Proceeds

(R000) Yield (%)

Retail 35 986 435 204 10.1%

Ermelo Mall Other Retail 19 501 247 690 9.8%

Alberton Mall Gauteng Retail 16 485 187 514 10.5%

Office 11 082 90 000

22 Fredman Drive Gauteng Office 11 082 90 000 -

Land* 107 195

Wilgespruit Land Gauteng Land - 6 000 -

S & J Land Gauteng Land - 48 195 -

Centurion Land Gauteng Land - 11 000 -

Kyalami Ridge Land Gauteng Land - 42 000 -

UK townhouses 13 062

Oando Wings – Investment in associate and loan receivable 436 198

Grand total 47 068 1 081 659 8.4%

* Land sales do not have GLA or yields

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Local new developments completed

Property Province GLA (m²)

Development

cost (R000)

Initial yield

(%)

Completion

date

Retail 28 837 415 529 9.1%

Park Meadows Builders Express Gauteng 3 100 31 682 11.4% Sep-18

Centurion Lifestyle Walk - Decathlon & Stodels Gauteng 6 162 85 624 10.8% Dec-18

Leroy Merlin - Little Falls Gauteng 19 575 298 223 8.3% Mar-19

Office 33 752 1 299 001 8.4%

2 Pybus Gauteng 13 588 475 519 8.0% Dec-18

Rosebank Link Gauteng 20 164 823 482 8.7% Oct-18

Industrial 31 549 236 507 9.2%

Brackengate Planet Fitness (50.1%) Western Cape 6 289 29 159 11.0% Nov-18

Hirt & Carter KwaZulu-Natal 17 153 164 776 8.5% Feb-19

Brackengate Brights (50.1%) Western Cape 8 107 42 572 10.7% May-19

Specialised 14 949 472 413 9.2%

Park Central Gauteng 14 949 472 413 9.2% May-19

Grand total 109 087 2 423 450 8.8%

Province

Number

of beds

Development

cost (R000)

Initial yield

(%)

Completion

date

Student accommodation 231 682

Roscommon House Western Cape 582 231 682 10.0% Mar-19

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Current new developments in progress

Property Province GLA (m²)

Projected

development

cost (R000)

Initial yield

(%)

Projected

completion

date

Still to spend

(R000)

Industrial 70 881 342 793 9.3% 273 744

Brackengate MassMart (50.1%) Western Cape 52 313 216 144 9.3% Oct-20 212 189

S & J - Spec Jupiter (90%) Gauteng 18 568 126 649 9.3% Sep-19 61 555

Grand total 70 881 342 793 9.3% 273 744

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Local redevelopments

Redevelopments completed Province

Redevelopment

cost (R000)

Initial yield

(%)

Completion

date

Retail

Centurion Mall (Phase 3 and 4) Gauteng 543 833 5.8% Jul-19

Grand total 543 833 5.8%

Redevelopments in progress Province

Projected

redevelopment

cost (R000)

Budgeted

yield

(%)

Projected

completion

date

Still to spend

(R000)

Retail 8 767 12.9 8 522

Sammy Marks Gauteng 8 767 12.9 Feb-20 8 522

Office 653 607 6.5 141 025

155 West Gauteng 614 092 6.5 Oct-19 104 600

Knowledge Park Western Cape 39 515 - Dec-19 36 425

Grand total 662 374 6.6 149 547

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Local new developments/redevelopments

Local new developments future committed pipeline Province GLA (m²)

Projected development cost (R000)

Initial yield

(%)Projected start date

Industrial

Sparepro S & J (90%) Gauteng 20 651 142 425 9.2% Nov-19

Local new redevelopments future committed pipeline Province


Initial yield


Retail

Centurion Lifestyle Centre Gauteng 68 146 3.0% Nov-19

Province

Number

of beds


Initial yield



Paton House Kwazulu-Natal 538 108 080 10.6% Oct-20

Province

Number

of beds


Initial yield


Student accommodation 178 032 10.2%

Yale Village - Phase 2 Gauteng 196 53 910 8.9% Aug-20

55 Empire Gauteng 462 124 122 10.7% Nov-19

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Local infrastructure projects

Infrastructure projects completed Province

Total development cost (R000)

Completion date

Industrial

S & J Jupiter (90%) Gauteng 30 991 Nov-18

Retail

Matlosana access road Gauteng 57 563 Dec-18

Grand total 88 554

Infrastructure projects in progress Province

Total development cost (R000)

Expected completion

dateStill to spend

(R000)

Industrial

S & J Phase 1 (90%) Gauteng 135 576 Jan-20 35 227

S & J Phase 2 (90%) Gauteng 18 974 Dec-19 4 574

Brackengate (50.1%) Western Cape 309 375 Jun-20 120 004

Atlantic Hills (55%) Western Cape 257 054 Mar-20 91 664

Grand total 720 979 251 469

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International investment strategy

Investment criteria Our focus

Local partner representation and

aligned with Redefine’s interests

Provide opportunities for scale

Liquid real estate market

Free flow of currency

Sophisticated tax regimes and

rules of law

Limited to Poland, United Kingdom and Australia

Provide ongoing strategic and financial support to our partners in-country

Invest directly where there is potential for capital uplift through active asset

management

Support-listed investments in corporate activities

Actively hedge income as and when the rand shows weakness

Hedge balance sheet naturally through matching currency gearing

Responsibly manage geographic concentration risk

In process of exiting

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International portfolio

Market

→ The UK commercial market continues to experience shocks and headwinds

→ Demand for student accommodation in Melbourne massively outstrips supply

→ Continued growth in consumer spending in Poland sustains retail sales growth

Activity

→ Leicester street occupancy at 97% for second semester

→ Value uplift post development of Leicester street amounts to AUD53 million

European Logistics Platform activity and priorities covered separately

Refer to RDI and EPP results presentations for activity

Priorities

→ Provide ongoing strategic and financial support to our local partners

→ Options to stem value destruction by RDI being explored

→ Complete Swanston street development for second semester 2020

→ Bring equity investor on board to expand logistics platform in Poland

→ Realise capital uplift on student accommodation

→ Free up Cromwell units that are trading at all-time high

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Market

→ Poland’s strategic location in central Europe, supply chain reconfiguration, e-commerce and an expanding manufacturing

sector poses opportunities for logistics

Activity

→ Completed developments

→ Strykow

→ Bielsko Brala Phase I

→ Lubin II Phase I

→ Developments in progress

→ Warsaw Phase I and II

→ Opole Phase I

→ Land acquired for development Gdansk, Torun and Ruda Slaska

Priorities

→ Tenant retention

→ Filling vacancies on new developments

→ Replacing the vacating tenant at Lodz III

→ Increasing weighted average lease expiry profile

→ Improving portfolio quality through new developments

→ Completing the developments in progress

→ Increasing weighting of the portfolio in primary logistics nodes

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European Logistics Platform development activity

New projects

Land holdings

→ 22.2ha of land in Gdansk, located in northern Poland on the Baltic coast on which 71 440m² of GLA can be developed

in phases

→ 11.8ha of land in Ruda Slaska, located in the Upper Silesia region, for the development of 57 562m² of GLA, also in

phases

→ 4.1ha of land in Torun of GLA of 16 495m²

Transfer of ownership on all land parcels have occurred, with the commencement of the developments subject to the

finalisation of development rights, the installation of infrastructure and the meeting of pre-letting requirements

Project Warsaw – Phase 1 Warsaw – Phase 2 Opole – Phase 1

Number of phases 1 1 2

GLA under construction 48 744m2 24 790m2 24 327m2

Estimated project cost EUR31.5 million EUR14.5 million EUR17.9 million

Stabilised yield* 6.54% 6.83% 6.78%

Anticipated capital uplift EUR2.3 million EUR2.7 million EUR1.5 million

Pre-let % 86% 55% 33%

Estimated completion date Q3 2020 Q4 2019 Q4 2020

* Net of all project fees

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International new developments

Completed during the year Country GLA (m²)Development

cost (EUR’m)

Development

cost (Rm)Initial yield (%)

Industrial

Stykow Poland 77 659 37.5 609.3 6.3%

Bielsko-Biała Phase I Poland 27 701 15.1 245.3 6.1%

Lublin Phase I Poland 25 273 22.6 367.2 7.6%

Grand total 130 633 75.2 1 221.8 6.7%

Country Number of bedsDevelopment

cost (AUD’m)

Development

cost (Rm)Initial yield (%)

Student accommodationLeicester Street Australia 804 130 1 332.5 9.5%

In progress Country GLA (m²)Development

cost (EUR’m)

Development

cost (Rm)

Initial yield

(%)

Completion

date

Still to spend

(EUR’m)

Still to spend

(Rm)

IndustrialWarszawa Phase I Poland 48 744 31.5 532.8 6.5% Sep-20 14.0 236.8

Warszawa Phase II Poland 24 790 14.5 245.3 6.8% Oct-19 4.2 71.0

Opole Phase I Poland 24 327 17.9 302.8 6.7% Oct-20 22.3 377.2

Grand total 97 861 63.9 1 080.9 6.7% 40.5 685.0

CountryNumber

of beds

Development

cost (AUD’m)

Development

cost (Rm)

Initial yield

(%)

Completion

date

Still to spend

(AUD’m)

Still to spend

(Rm)


Swanston Street Australia 587 110 1 131.4 9.2% Jun-20 43 442.3

Future committed

timelineCountry

GLA

(m²)

Development

cost (EUR’m)

Development

cost (Rm)

Initial yield

(%)

Completion

date

Still to spend

(EUR’m)

Still to spend

(Rm)

Industrial

Toruń Building B Poland 16 920 11.6 196.2 6.6% Feb-20 11.6 196.2

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Redefine’s interests → RDI REIT PLC 29.4%

Platform profile → 43% exposure to retail, 21% to offices, 23% to hotels and 13% to industrial assets

Carrying value → R2.8 billion

See through value of assets → R7.2 billion

See through LTV → 109.5%

Redefine activity in firsthalf of 2019

→ Redefine has been working closely with RDI to evaluate all options to maximise shareholder value

→ Exchangeable bond - 22% (EUR32.8 million) of the exchangeable bondholders have elected to put their bonds back

to us in September – we were very surprised by the low take up

→ This leaves EUR117.2 million outstanding to the maturity date of 16 September 2021

Redefine’s strategy

→ Options under consideration for Redefine to realise its stated objective of recovering value that has been destroyed

→ Some options may require Redefine to remain invested in the medium term without committing further equity to RDI

→ RDI REIT is no longer a core asset

→ Funding arrangements to be put in place to allow for EUR117.2 million exchangeable bond early redemption

United Kingdom

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Redefine’s interests→ Cromwell 2.3%

→ Journal 90%

Platform profile → 20% exposure to offices, 2% to industrial assets and 78% to student accommodation




Redefine activity in first

half of 2019

Journal

→ Provided financial support to Journal including advancing a shareholder loan of AUD24 million to fund the

development of Central

→ The sale process of Journal has been actioned with JLL appointed to assist with the process. The process will be

launched at the end of October


→ Establish Uni Place as the premier student accommodation facility in Melbourne

→ Central development to be completed by mid-2020 in time for the second semester

→ Two significant PBSA portfolio disposals in progress are setting new benchmarks on yield expectations and attracting

high investor demand

→ Excellent prospects for capital uplift on student accommodation (current prime grade yields for student

accommodation are at 5 to 5.5%, we are developing at circa 9.5%)

→ Disposal of Journal would release remaining Cromwell units for disposal

Australia

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Redefine’s interests

→ EPP 45.4%→ European Logistics Platform 95%→ Chariot Top Group 25%

Platform profile → 47% exposure to retail, 16% to office and 37% logistics assets




Redefine activity in firsthalf of 2019

EPP

→ During April, Redefine acquired a further 44.3 million EPP shares from Pimco / Oaktree for a consideration of EUR64.9 million as part of the Chariot Put arrangement

→ Ahead of EPP’s AGM in June, Redefine and EPP entered into a voting limitation deed to limit its voting rights exercised at general meetings to no more than 40% of the aggregate votes exercised, to ensure that Redefine, as a minority shareholder, does not exercise legal or factual control of EPP


→ Covered separately


→ Support EPP in recycling assets at upper end of cycle rather than raising capital at high yields

→ Grow logistics platform through development pipeline

→ Focus on leasing to extend logistics standing portfolio WALT of 4.5 years

→ Improve logistics platform occupancy – currently 89% including two recent developments

→ To support funding of the expansion of European Logistics Platform, an equity partner will acquire half of Redefine’s interest – process well advanced

→ Chariot is expected to unwind by the end of 2020

Poland

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Redefine group results for the year ended 31 August 2019 1

Documents

Transcript of Redefine group results for the year ended 31 August 2019 1