FULL MANUFACTURED CAPITAL REVIEW 2015 · Industrial 5 601 764 69 48 105 19 30 228 251 270 266 545...

reviewREDEFINE PROPERTIES LIMITED

FULL MANUFACTURED CAPITAL REVIEW 2015

reflect2015 marks 15 years since listing We celebrated 15 years of growth this year – growth in terms of returns, assets, people and impact. We’re not landlords. We’re people.

82 on Maude, Sandton, Johannesburg

Redefine Manufactured Capital Review 2015 1

WHAT MANUFACTURED CAPITAL MEANS TO REDEFINE

Our manufactured capital consists of the material goods and infrastructure used in the provision of our services, specifically managing and acquiring property. Our major manufactured capital is therefore our property portfolio.

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Report references

Integrated report

Annual financial statements

Manufactured Capital Review

Social, ethics and sustainability report

Corporate governance report

Capitals

Financial

Manufactured

Human

Social and relationship

Intellectual

Natural

Sector

Office

Retail

Industrial

HOW TO NAVIGATE OUR REPORTIcons have been developed to make this report easier to read.

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IR AFS SES INTEGRATED REPORT

This report contains a holistic and integrated presentation of the group’s performance in terms of financial, manufactured, human, intellectual, social and relationship and natural capital.

The report is aimed at shareholders and includes a review of our strategy, performance during the year and prospects.

Frameworks applicable

• IIRC’s integrated reporting framework

• The Companies Act 2008• The JSE Listings

Requirements• King III

IR AFS SES ANNUAL FINANCIAL STATEMENTS

The annual financial statements provide a detailed analysis of the group’s performance for the year. The integrated report, read together with the annual financial statements provides a comprehensive overview of Redefine’s performance and prospects.

• IFRS• The Companies Act 2008• The JSE Listings

Requirements• King III

CGR MC MANUFACTURED CAPITAL REVIEW

This review gives a great level of detail on our property portfolio and details market trends, the performance, acquisitions, disposals and developments of our properties during the year.

• The JSE Listings Requirements

IR AFS SES SOCIAL, ETHICS AND SUSTAINABILITY REPORT

This report of the social and ethics committee, detailing the group’s broader impacts and aimed at a wider audience than the integrated report.

• The Companies Act 2008• King III

CGR MC CORPORATE GOVERNANCE REPORT

This report details our corporate governance structures, committee performance and other issues relating to the governance of the group, including our compliance with the principles of King III.

• The Companies Act 2008• King III

REDEFINE’S INTEGRATED REPORT 2015 SUITE

CONTENTS

FULL MANUFACTURED CAPITAL REVIEW

Portfolio structure 5

Local property portfolio 6

Local portfolio overview 6

Local property portfolio investment criteria 8

Acquisitions transferred during the year 9

Focused asset and property management 10

Our local tenant profile 11

Identifying value-add opportunities 15

Retail portfolio review 16

Retail sector overview 17

Retail portfolio performance 18

Retail development 19

Retail acquisitions and disposals 20

Retail development programme 20

Retail prospects 21

Office portfolio review 24

Office sector overview 25

Office portfolio performance 26

Case study: Cape Town – A growing investment 27

Office acquisitions and disposals 28

Office development 29

Office development programme 30

Office prospects 31

Industrial portfolio review 32

Industrial sector overview 33

Industrial acquisitions and disposals 34

Industrial development 35

Industrial development programme 35

Industrial prospects 36

RISKS AND OPPORTUNITIESThe impacts of load shedding and the potential water supply challenges, as well as the continued rise in administered prices, remain some of our key risks. These challenges, however, offer us the opportunity to differentiate our properties through the use of back-up generators and green technology.

Sluggish GDP growth in the country along with increased competition and an oversupply of stock in the sector puts pressure on tenant retention and the related rentals. For Redefine, the opportunity exists for the disciplined and astute execution of our strategy, heightened risk management, tenant retention and a strong focus on managing the variables under our control in order to see continued growth.

CREATING VALUEThrough the disciplined application of our business model, the active management of our property portfolio, including pursuing appropriate acquisitions, developments and disposals, we increase our manufactured capital, enabling us to continue to grow our portfolio and provide income and capital growth for all our stakeholders.

HIGHLIGHTS

Merger of Fountainhead portfolio

14 high-quality office assets valued at R4.1 billion, situated in key nodes of the Western Cape and Gauteng acquired from Leaf

Acquisition of R2.7 billion Macsteel industrial portfolio

Property assets under management increased by R13.4 billion to R64.5 billion

Developments in progress of R3.8 billion, with a further R1.4 billion completed

First direct property entry into Europe – R704 million German investment

Further investment of R1.6 billion in Cromwell

IR AFS SESIR AFS SESIR AFS SES CGR MCCGR MC


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http://www.redefine.co.za/investor-relations/investor-centre/integrated-reports





PORTFOLIO STRUCTURE

Redefine’s objective is to obtain the best possible risk adjusted returns from our portfolio and to maintain a strong bias towards predictable income streams. To achieve this, we aim to maintain a portfolio that offers growth potential but also provides a balance between defensive investments and assets that can be improved with active asset and value-added development management.

The portfolio has been restructured with 6% of available capital invested in higher-risk, higher-return assets. This does not preclude acquisitions that are opportunistic or intended to explore new segments of the property business. 68% of our income-earning property assets make up the core portfolio, which provides stable, secure and growing income, requiring effective property and asset management. International investments contributed 17% of our income, which requires no local management.

Our local property portfolio

“REDEFINE PERSISTS IN EVOLVING AND REFINING OUR LOCAL PORTFOLIO COMPOSITION IN LINE WITH THE STRATEGIC OBJECTIVES OF THE BUSINESS. THIS CONTINUED RESTRUCTURE COULD NOT HAVE BEEN BETTER TIMED TO COPE WITH THE CHALLENGING OPERATING CONTEXT WE FIND OURSELVES IN. IT IS ENCOURAGING TO NOTE THAT REDEFINE IS SEEING INCREASING DEMAND FOR SPACE IN ITS WELL-LOCATED PROPERTIES DESPITE FIERCE COMPETITION IN THE MARKET.” Andrew König, CEO

Focusing on the strategic growth of our local portfolio through the acquisition of quality long-term income-producing assets with attractive capital appreciation prospects lent resilience to the local portfolio in the year under review. The portfolio performed well, despite tough market conditions. We also continued to benefit from our decision in 2010 to commit to a substantial development and redevelopment programme.

Our strategy of disposing of smaller, non-core properties and the ongoing investment in and development of premium properties is reflected in the value per property.

FULL MANUFACTURED CAPITAL REVIEW

Our directly held portfolio comprises a total of over 333 properties, valued at R51.2 billion, with a gross lettable area of approximately 4.8 million m2 across the retail, office and industrial sectors. During the year, Redefine secured its takeover of Fountainhead Property Trust’s property portfolio comprising 41 properties, of which 70% by value are prime retail assets. Additionally, Redefine’s international property investments with a market value of R11.1 billion provide the group with geographic diversification. Redefine has a 30.1% equity interest, equating to R4.9 billion, in RI PLC, which is listed on both the LSE and the JSE. During the year Redefine acquired a German retail portfolio in a co-investment with RI PLC valued at R653 million. Redefine also has a R5.1 billion presence in the Australian property market through a direct 50% interest in North Sydney’s landmark tower, Northpoint, as well as a holding of 25.6% in Cromwell Property Group, which is listed on the ASX.

GROUP PROPERTY ASSETS BY VALUE (%)

2015 2014• Cromwell 7 6• RI PLC 6 7• Fountainhead – 23• Northpoint 1 1• Local property assets 83 63• Emira 2 –• Germany 1 –

2015

2014

LOCAL PORTFOLIO VALUE BY SECTOR (%)

2015 2014• Retail 41 40• Office 38 42• Industrial 20 18• Specialised 1 –

2015

2014

Priorities for

2016 and beyond

OUR PORTFOLIO

Redefine controls a property income earning asset base with a market value of over R64.5 billion that has the scale to grow organically and through acquisition. Our portfolio is diversified by sector and geography to absorb risk and our sizeable asset base provides the platform to undertake large-scale property portfolio acquisitions.

ALLOCATION OF CAPITAL (%)

• Core 68• International 17• High return 6• Secondary 5• Government-tenanted office portfolio 4

AVERAGE PROPERTY VALUE(R million)

O R I

6659

35

9081

64

97102

125

99239

162

141

67

81

Office Retail Industrial

2011

2012

2013

2014

2015

MATERIAL MATTERS

RELEVANT

Investing strategically

We use our years of experience to make decisions regarding our property portfolio that benefit our organisation, while creating value for our investors, tenants and other stakeholders.

Enhancing operational efficiency

We look for ways to operate smarter, that is, to maintain our margins while preserving our superior product offering in order to protect our market share.

• Diversify exposure to new asset classes outside of the traditional property sectors

• Strong focus on enhancing value of core assets

• Refine long-term master plans for development of key assets

• Deal with the electricity supply crisis

• Alternative uses to be considered before disposal of non-core assets

• Expand into markets offering growth and secure income streams

• Let vacant space

• Manage tenants credit and concentration risk

• Continue to maintain margins and maximise cash flow

• Maintain strong focus on tenant retention and relationships

Ottery Centre, Ottery, Cape Town


Sectoral spread by gross monthly rental

2015 Valuation

R000Number ofproperties

GMRR000

GMR%

Office 19 457 649 139 144 952 36

Retail 20 816 326 86 175 718 44

Industrial 10 495 486 106 78 503 19

Specialised 420 100 2 3 756 1

51 189 561 333 402 929 100

2014 Valuation


GMRR000

GMR%

Office 12 612 765 112 114 821 41

Retail 12 013 722 89 103 619 40

Industrial 5 601 764 69 48 105 19

30 228 251 270 266 545 100

FULL MANUFACTURED CAPITAL REVIEW CONTINUED

The portfolio comprises assets with a range of lease expiries and different ages, including new developments and properties scheduled for redevelopment. This allows us to drive returns through asset management initiatives, development and recycling of capital from mature assets into those with superior growth potential.

At 31 August 2015, the direct property portfolio was valued at R51.2 billion (2014: R30.2 billion) and comprised 333 (2014: 270) properties with a total GLA of 4.8 million m2 (2014: 3.6 million m2). We have continued to grow and improve the quality of the core portfolio, with an emphasis on acquisitions, wherever possible with fully repairing leases to blue-chip tenants who offer secure cash flows and negligible vacancy rates. The strategy set out in 2011 has progressed well and we remain focused on the following priorities:

• Securing long-term growth and capital appreciation prospects

• Focusing on asset and property management

• Growing and diversifying the local property asset base

• Identifying value-add opportunities to existing properties

We continue to make significant strides in improving the portfolio, which is evident through:

• Redefine’s increased average value per property

• The top 20 properties make up 45% (2014: 36%) of the portfolio by value

• 37% (2014: 33%) of the total portfolio is single-tenanted properties which helps improve cost efficiencies

• The top 20 tenants contribute 40% (2014: 45%) of the gross monthly rental

• The portfolio remains diversified across mainly the office, retail and industrial sectors

• 65% of the portfolio is located in Gauteng (2014: 65%), in line with our strategy to reduce exposure to smaller, less efficient municipalities and focus mainly on the dominant urban areas

LOCAL PORTFOLIO OVERVIEW

Sectoral spread by gross lettable area

2015 Valuation


GLAm²

GLA%

Office 19 457 649 139 1 452 440 30

Retail 20 816 326 86 1 323 501 28

Industrial 10 495 486 106 1 955 477 41

Specialised 420 100 2 26 970 1

51 189 561 333 4 758 388 100

2014 Valuation


GLAm²

GLA%

Office 12 612 765 112 1 182 590 33

Retail 12 013 722 89 1 187 975 33

Industrial 5 601 764 69 1 199 577 34

30 228 251 270 3 570 142 100

GLA (%)

2015

2014

2015 2014• Office 31 33• Industrial 41 34• Retail 28 33• Specialised 1 –

2015

2014

NUMBER OF PROPERTIES (%)


2015

2014

VALUE (%)


2015

2014

GMR (%)


2015

2014

“THE TOP 20 TENANTS CONTRIBUTE 40% (2014: 45%) OF THE GROSS MONTHLY RENTAL.”

Essex Gardens, Westville, KwaZulu-Natal


We acquired the Leaf portfolio of properties during 2015, substantially enhancing our office portfolio in the Western Cape. The transaction was priced at R4.1 billion equating to an initial income yield of 8%. The portfolio is underpinned by high-quality income streams from its large, excellently located, premium grade office precinct assets. The transaction includes a number of significant properties such as Black River Park, The Boulevard and Wembley Square Development in Cape Town and Silver Stream Business Park, Silver Point Office Park, Crawford House and Hampton Park in Johannesburg. It also comprises Clearwater Office Park in Strubens Valley and Centurion Gate in Centurion. This strategic transaction advances our strategy to grow a quality, diversified portfolio of properties that support sustainable and sustainable and growing performance for our investors.

In addition to the Fountainhead and Leaf portfolio’s a total of 34 properties, with a combined GLA of 637 867m2, were acquired and transferred during the year for an aggregate consideration of R3.6 billion, at an initial yield of 8.5%. In addition, and subject to the usual conditions precedent, agreements have been concluded for the acquisition of properties for an aggregate consideration of R415 million at an initial yield of 9.9% and GLA of 12 135m2.

Included in our acquisitions is the purchase of the Macsteel portfolio which consists of 28 properties valued at R2.7 billion with a 12-year triple net lease. This transaction represents an attractive initial yield of 8.7% that escalates at 8% per annum, with a further five-year renewal option. This transaction transformed our industrial portfolio; increasing it from approximately R6 billion to over R10 billion, lifting the weighted average lease period from 6.7 years to 7.7 years and bolstering the defensive component of the portfolio. The agreement includes the option to sell the assets back to Macsteel should we wish to exit the investment.


Geographical spread by GLA

2015 Province

ValuationR000

Number ofproperties

GLAm²

GLA%

Gauteng 33 073 717 215 3 083 234 65

Western Cape 11 141 254 47 823 247 17

KwaZulu-Natal 2 987 443 37 399 673 8

Other 3 987 147 34 452 234 10

51 189 561 333 4 758 388 100

2014 Province

ValuationR000

Number ofproperties

GLAm²

GLA%

Gauteng 19 727 074 176 2 271 652 63

Western Cape 5 162 381 40 545 653 15

KwaZulu-Natal 2 348 488 31 363 934 10

Other 2 990 308 23 388 903 11

30 228 251 270 3 570 142 100

VALUE (%)

2015 2014• Office 65 65• Industrial 22 17• Retail 6 8• Specialised 7 10

2015

2014

GMR (%)

2015 2014• Gauteng 64 64• Western Cape 21 17• KwaZulu-Natal 7 10• Other 8 9

2015

2014

NUMBER OF PROPERTIES (%)


2015

2014

GLA (%)


2015

2014

Local property portfolio investment criteriaAlthough the market is extremely competitive, we continue to seek acquisition opportunities that meet our investment criteria, which is centered on optimising our risk and reward:

• Continued expansion across traditional sectors

• Focused on younger (more efficient), bigger and better quality projects

• Diversification into higher yielding non-traditional asset classes

• Pursuit of opportunistic investments where value can be unlocked or for a strategic foothold

• Continued redevelopment of feasible buildings to add value

• Limited speculative development, no more than 5% of property assets

• Disposal of non-core (incapable of alternative use) assets, including:

• Government tenanted office portfolio

• Management intensive, older, inefficient (mostly office) properties

We were able to successfully conclude a number of key transactions by taking advantage of our financial flexibility. The ability to unlock high-quality opportunities in a very competitive market is also a differentiating factor and is testament to the agility of Redefine’s management and deal-making abilities and the strength of its relationships in the financial and property sectors. Redefine secured its takeover of Fountainhead Property Trust portfolio during the year. Redefine has acquired all of Fountainhead’s assets including the entire Fountainhead property portfolio in exchange for 85 new Redefine shares for every 100 Fountainhead units plus the assumption of Fountainhead’s liabilities. Fountainhead’s property portfolio comprises 41 properties, of which 70% by value are prime retail assets.

ACQUISITIONS(R000)

Office Retail Industrial Specialised

2012 2013 2014 2015

1 21

6 34

9

1 09

5 49

226

3 82

9

2 02

7 82

0

6 37

5 93

5

3 94

3 65

139

9 45

4

8 39

2 20

4

693

518

1 54

1 97

6

99 7

56

55 0

000 0 00

0

1 000 000

2 000 000

3 000 000

4 000 000

5 000 000

6 000 000

7 000 000

8 000 000

9 000 000

PROPERTY PORTFOLIO(R000)


20122011 2013 2014 2015

9 26

8 34

1

3 00

5 44

87 67

1 94

4

9 83

3 52

7

12 6

12 7

65

5 60

1 76

40 42

0 10

0

12 0

13 7

22

10 4

95 4

87

4 56

4 07

99 60

1 34

6

9 53

0 83

0

3 95

4 92

07

731

943

0 00

0

5 000 000

10 000 000

15 000 000

20 000 000

25 000 000

19 4

57 6

4820

816

326

“WE ACQUIRED THE LEAF PORTFOLIO OF PROPERTIES DURING 2015, SUBSTANTIALLY ENHANCING OUR OFFICE PORTFOLIO IN THE WESTERN CAPE.”



property sectors. This, coupled with the inadequate service provided by local authorities is of particular concern to us. We have experienced a significant rise in the number of back billings received from councils, placing pressure on our ability to recover costs from our tenants. As these amounts are typically significant, tenants usually cannot afford to settle in one payment and the impact is consequently on Redefine’s working capital. Managing our municipal accounts and attempting to resolve recurring issues is becoming increasingly frustrating for all involved, and it requires a significant amount of time and effort by our employees.

During 2013 and 2014, the City of Tshwane changed all large power users to a prepaid electricity platform, placing further strain on working capital cash flows with landlords having to pay electricity upfront only to recover from tenants after use in arrears. The regulatory environment regarding the resale of electricity in the commercial property space is uncertain and may pose a potential risk to the recovery of electricity from tenants. Significant increases in rates charges have also been experienced. Redefine raised a number of successful objections to the rates increases; however, we expect continued pressure in this area.

OUR LOCAL TENANT PROFILE

Multi and single tenanted properties

2015 Tenant profile

Number ofproperties

GLAm²

ValuationR000

Number ofproperties

%GLA

%Value

%

Multi 179 2 715 321 32 503 588 53.8 57.1 63.5

Office 85 944 344 11 444 697 25.4 19.8 22.4

Retail 67 1 112 523 18 182 422 20.1 23.4 35.5

Industrial 27 658 454 2 876 469 8.1 13.9 5.6

Single 122 1 716 403 14 177 898 36.6 36.1 27.7

Office 39 390 396 6 286 423 11.7 8.2 12.3

Retail 12 78 754 888 701 3.6 1.7 1.7

Industrial 69 1 220 283 6 582 674 20.7 25.6 12.9

Specialised 2 26 970 420 100 0.6 0.6 0.8

Parkade/vacant land 7 – 537 517 2.1 – 1.1

Office 2 – 12 500 0.6 – 0.1

Retail 2 – 111 174 0.6 – 0.2

Industrial 3 – 413 843 0.9 – 0.8

Development 10 135 102 2 566 528 3.0 2.8 5.0

Office 5 45 303 1 407 528 1.5 1.0 2.7

Retail 1 64 624 893 000 0.3 1.3 1.8

Industrial 4 25 175 266 000 1.2 0.5 0.5

Held-for-sale 15 191 563 1 404 030 4.5 4.0 2.7

Office 8 72 398 306 500 2.4 1.5 0.6

Retail 4 67 600 741 030 1.2 1.4 1.4

Industrial 3 51 565 356 500 0.9 1.1 0.7

333 4 758 388 51 189 561 100.0 100.0 100.0

During the year Redefine also acquired a strategic stake in Emira Property Fund, and currently holds 11.5% of the shares in issue. This investment is in line with Redefine’s strategy of investing in opportunistic investments where we believe value can be unlocked.

Additionally, subsequent to the year end, Redefine announced a 51% investment in Respublica for R200 million. This acquisition provides us with a springboard into a new asset class and provides alternative use redevelopment opportunities for a number of our properties that are appropriately located. Hatfield Square, which is one block away from the University of Pretoria’s campus, will be our first asset to be converted into student accommodation. A number of other office properties in Redefine’s stable are candidates for conversion too.

During the year, a total of 35 properties with a GLA of 339 000m2, which no longer meet Redefine’s investment criteria, were sold to various buyers for an aggregate consideration of R2.2 billion at an average yield of 9.3%. Agreements have been reached on the disposal of properties with a GLA of 164 707m2 for an aggregate consideration of R1.2 billion at an average yield of 8.3%.

Focused asset and property managementRedefine’s growth in recent years has been considerable. In light of this growth, it became clear that certain organisational changes needed to be made or, rather, roles within the organisation needed to be redefined in order to support our continued growth. During the year, we therefore focused on assessing and improving our operational structures across the organisation. To do this, the roles of asset management and property management were clearly delineated, along with the roles of support functions such as Human Resources and Finance. We believe that we are now better placed to continue our growth trajectory into the future. The national heads for the office, retail and industrial property portfolios lead our property management function. The heads of the Inland and Coastal regions directly support them.

A dedicated manager is responsible for each Redefine property and is supported by the administration department. Due to our internalised asset and property management, we are able to directly monitor service levels and proactively plan to meet current and prospective tenant requirements.

Besides dealing directly with property and facilities managers, tenants can interface with Redefine through our call centre or the Redefine enquiries email account, which is monitored by dedicated internal agents who are tasked with resolving tenant queries quickly and effectively. A total of approximately 8 000 telephone enquiries were handled during the review period with a further 19 000 emails responded to. The call centre aims for a first-time resolution with an average turnaround time of 24 hours. However, should the enquiry require municipal or third-party information or assistance or should it be a maintenance enquiry, the lead time can vary.

In a tough economic environment, it is crucial to retain tenants. Key to this is maintaining good relationships with our tenants and keeping abreast of their needs. Wherever possible we try to negotiate early lease renewals. Over the past three years, we have focused on increasing our tenant retention rate and have achieved good results. The tenant retention rate by GLA is 87%, compared to 86% a year ago. During the year, leases covering 510 649m2 were renewed at an average rental decrease of 3.0%. A further 338 294m2 was let across the portfolio. However, the overall vacancy rate increased only marginally by 0.1% to 5.4%.

During the year, the industry has dealt with the consequences of the Ellerine’s Business Rescue case. While Redefine had spent much of the previous two years working to reduce our exposure to the furniture retail sector, we are pleased that the vacated stores have been re-let.

We continue to monitor the performance of malls, categories and individual stores fastidiously. We are particularly focused on restaurants and fast food store performance, as well as other discretionary categories. Categories that are experiencing technological innovations such as the music and movie industry, as well as books also remain on our watchlist. We are engaging early with tenants that are reporting trading densities below our accepted benchmarks. Our intention is always to manage performance sensitively with due care to our retention and vacancy profiles.

Research by the South African Property Owners Association (SAPOA) points to the fact that, over the last decade, rates and taxes have continued to escalate at a rate higher than inflation across South Africa placing additional pressure on the net yields achieved by commercial


Tenant grading of total portfolio

2015 Grade Sector

GMR%

GLAm²

GLA%

Tenantcount

Grade A 60.9 2 413 055 50.7 1 295

Office 23.6 773 722 16.3 222

Retail 27.2 779 111 16.4 1 019

Industrial 9.2 833 252 17.4 52

Specialised 0.9 26 970 0.6 2

Grade B 24.7 1 612 329 33.9 624

Office 9.1 345 311 7.3 202

Retail 6.4 343 752 7.2 215

Industrial 9.2 923 266 19.4 207

Grade C 14.4 368 472 7.7 3 094

Office 3.3 138 820 2.9 1 036

Retail 10.0 130 808 2.7 1 816

Industrial 1.1 98 844 2.1 242

Total excluding vacancy 4 393 857 92.3 5 013

Office – 194 586 4.1

Retail – 69 830 1.5

Industrial – 100 115 2.1

Total vacancy 364 531 7.7

Total 100.0 4 758 388 100.0 5 013


Top 20 tenants

Tenant nameGLA

m²GLA

%

Macsteel 552 641 11.6

Government 382 184 8.0

Edcon 152 814 3.2

Pepkor 144 813 3.0

Shoprite 121 929 2.6

Robor 120 277 2.5

Pick ‘n Pay 100 801 2.1

Woolworths 79 648 1.7

Discovery Health 54 054 1.1

Masstores 52 148 1.1

Standard Bank 50 152 1.1

Dawn 44 138 0.9

Alexander Forbes Limited 41 091 0.9

Premier Foods 38 926 0.8

General Motors South Africa 38 000 0.8

Foschini Group 35 251 0.7

Mr Price 33 838 0.7

Iliad Africa Trading 31 121 0.7

Ferreiras 25 732 0.5

Coricraft Group 24 699 0.5

Total 2 124 257 44.5

Tenant nameGMRR000

GMR%

Government 36 727 9.7

Macsteel 19 522 5.2

Edcon 15 777 4.2

Pepkor 11 448 3.0

Shoprite 9 196 2.4

Foschini Group 7 260 1.9

Pick ‘n Pay 7 158 1.9

Standard Bank 7 012 1.9

Mr Price 5 757 1.5

Woolworths 5 673 1.5

Alexander Forbes 4 791 1.3

Discovery Health 4 704 1.2

Robor 4 063 1.1

Masstores 3 652 1.0

Premier Foods 2 098 0.6

Dawn 1 666 0.4

General Motors South Africa 1 497 0.4

Coricraft 1 128 0.3

Iliad Africa Trading 994 0.3

Ferreiras 764 0.2

Total 150 887 40.0

Redefine’s policy is to lease space to quality tenants with a high likelihood of renewal. Redefine classifies its tenants across all sectors as follows:

Grade ACompanies that trade out of multiple geographic locations and/or serve a diverse customer base and generally occupying more than 2 000m2.

Grade BCompanies that have multiple offices although these may not be geographically dispersed, serve a reasonably diverse customer base, and generally occupying more than 1 000m2 of space.

Grade CComprises individuals and sole proprietorships as well as other legal entities that trade out of one or very few locations occupying less than 200m2.

TENANT GRADE (%)

GMR GLA• A 61 55• B 25 37• C 14 8

2015

2014

44.5%GLA total

40.0%GLA total


Identifying value-add opportunitiesDevelopments, in the form of both refurbishments as well as greenfield developments, offer the opportunity to refine and improve the quality of our assets, unlock new income streams, strengthen client relationships and extend the lifespan of our core properties. Among these projects are many significant and innovative concepts, which strongly position Redefine for the future in a competitive market.

The extent of development we undertake varies depending on our assessment of the prospective returns. Development returns are generally considered higher risk than those available from existing income-producing properties and, as a result, we target returns that are commensurately higher. As part of our overall risk management process, we have limited the maximum total speculative development exposure to not more than 5% of our portfolio. Risks associated with development projects generally arise from the amount of time taken to complete projects, as a result of the following:

• Particular difficulty arises due to restrictive clauses in retail leases

• Excessive lead time in town planning issues with councils

• Actual development costs exceeding budgeted levels and contractor under performance – we manage this by putting fixed-costs contracts in place and implementing solid service level agreements

• Delays in the completion of projects due to labour unrest

For all our developments, quality and safety is essential. We have taken a policy decision that, where possible, all of our new buildings will be constructed to at least four-star Green Building Council of South Africa standards. We also focus on redeveloping our buildings to make them more efficient. Lowering the cost of occupation through reducing utilities’ consumption, such as electricity and water, can help make tenants’ businesses more profitable, resulting in enhanced tenant retention, while preserving our margins. We continue to evaluate our properties to determine which buildings would benefit most from further efficiency gains.

During the year, we completed developments worth R1.4 billion, with the largest being Matlosana Mall, a super-regional mall valued at R1.0 billion. A further R2.2 billion of greenfield developments are underway, including our new headquarters, the Rosebank Towers, which is a new R693 million development in which Redefine has a 42.5% interest. Redevelopment projects presently in progress in the existing portfolio have an approved value of R1.6 billion, at an average yield of 6.1%.

Vacancy profile

2015Province

OfficeGLA

m²

RetailGLA

m²

Industrial GLA

m²

Specialised GLA

m²Total GLA

Total

Gauteng 152 131 34 670 63 379 – 250 180

Western Cape 16 080 6 293 307 – 22 680

KwaZulu-Natal 13 223 7 289 26 087 – 46 599

Other 13 153 21 578 10 342 – 45 073

Total 194 587 69 830 100 115 – 364 532

Vacancy (%) 13.4 5.3 5.1 – 7.7

Total GLA 1 452 440 1 323 501 1 955 477 26 970 4 758 388

Less developments 20 584 8 008 25 175 – 53 767

Less held-for-sale 50 486 5 390 – – 55 876

Total 123 517 56 432 74 940 – 254 889

Vacancy (%) 8.5 4.3 3.8 – 5.4

Total GLA 1 452 440 1 323 501 1 955 477 26 970 4 758 388

Lease expiry profile


GLA GMR GLA GMR GLA GMR GLA GMRYear to August m² R/m² m² R/m² m² R/m² m² R/m²

Monthly 121 644 97.8 57 963 128.3 44 563 53.8 – –

2016 281 528 99.0 217 438 138.3 195 966 46.7 – –

2017 292 635 97.9 201 506 163.1 164 678 48.2 – –

2018 206 218 82.5 226 844 160.7 150 389 44.3 – –

2019 71 430 114.2 142 474 135.8 113 788 44.6 – –

Beyond 2019 355 468 144.5 420 844 117.7 1 211 153 39.0 26 970 139.25

Vacancy 123 517 – 56 432 – 74 940 – – –

1 452 440 99.8 1 323 501 132.8 1 955 477 40.1 26 970 139.3


LEASE EXPIRY PROFILE (GLA)


2016Monthly 2017 2018 2019 Beyond2019

Vacancy

122

000

45 0

0058

000

0

282

000

196

000

217

000

0

293

000

165

000

202

000

0

206

000

150

000

227

000

0

71 0

00

114

000

142

000

0

0

200 000

400 000

600 000

800 000

1 000 000

1 200 000

1 400 000

355

000

421

000

124

000

27 0

00

56 0

0075

000

1 21

1 00

0

0

Rosebank Towers, Rosebank, Johannesburg


The Boulders Shopping Centre, Midrand, Greater Johannesburg

O R IRETAIL PORTFOLIO REVIEW

RETAIL PORTFOLIO REVIEWThe transformation of our retail portfolio continued during this year. Regional and super regional centres now represent nearly 40% of our retail GLA and nearly 50% of our retail GMR. We continue to focus on opportunities around nodally dominant assets, with additional emphasis on differentiation and relevance across our portfolio.

CHALLENGES

• Constrained consumer environment

• Load shedding and its impact on consumer behaviour

• Number of mall robberies across the country

• Limited pool of property skills in retail sector

• Increased competition with the risk of overtrading in certain metropolitan nodes

• Increased difficulty in tenant negotiations particularly with national tenants

HIGHLIGHTS

Secured the takeover of Fountainhead portfolio, which comprises 41 properties, of which 70% by value are prime retail assets

Acquired Stoneridge Mall

Opened Matlosana Mall in October 2014

Received the SACSC award for Best Shopping Centre development over 20 000m2 for the Matlosana Mall

Significant improvements underway at major centres such as Centurion Mall, Southcoast Mall, East Rand Mall and Kenilworth Centre

Installed solar rooftop technology at The Boulders, with a further four retail centres earmarked for installation

Commenced with installation of full generator capacity at 13 key retail centres

Retail sector overviewAccording to the 2015 South African Shopping Centre Directory, South Africa is now home to some 23 million square metres of retail space. Over the last 20 years, there has been a 7.5% annual increase in the total floor area of shopping centres larger than 30 000m2. South Africa’s approximately 2 000 shopping centres place us sixth in the world in terms of the number of centres and seventh in the world in the terms of floor space.

The sheer volume of malls, as well as the number of major shopping centres that have recently come, or are coming on stream, serves to demonstrate the significant role that shopping malls and retailers play in South African society, as well as the high level of competition within the sector.

The macro-economic environment continues to be tough with consumer spending remaining under pressure due to living cost increases, lackluster wage growth and inadequate job creation, as well as escalating debt. While inflation remained within the target bands in 2015, the sudden and dramatic depreciation of the Rand has put this at risk. The pass-through will not be immediate, but many retailers are already highlighting the pressure of the weak Rand on imports and the anomaly that duties cannot be hedged. This once again brings into question the projected length and magnitude of the rate cycle.

Without meaningful improvement in the much-discussed economic headwinds and changes in the growth projections for South Africa, the retail sector increasingly becomes a battle for market share. The key focus in the industry at present, therefore, is on active management in a highly competitive, yet low growth environment. It is becoming increasingly evident that retail is now a stage for change, innovation and disruption, and for Redefine remaining relevant is our key to success.

RETAIL VALUE BY TYPE (%)

2015 2014• Community centre 17 30• Regional centre 83 28• Small regional 14 17• Other 9 15• Neighbourhood centre 7 10

2015

2014

RETAIL GMR BY TYPE (%)


2015

2014

Retail key performance statistics

Description

Retail

2015 2014

Increase/ (decrease)

%

Number of properties 86 89 (3.4)Total GLA (m²) (million) 1.3 1.2 10.3Vacancy (%) 4.3 3.9 10.3Asset value (R million) 20 816 12 014 73.3Average property value (R million) 242.1 161.7 49.7Valuation per m² (excluding undeveloped bulk) 15 728 12 112 29.9Value as % of portfolio 40.7 39.7 2.4Average gross rent per m² 115.2 93.5 23.3Average portfolio rental escalation (%) 8.8 8.2 7.3Tenant retention rate by GLA % 79.7 89.4 (10.9)Weighted average renewal rental growth (%) 4.0 5.0 (20.0)Weighted average portfolio escalation (%) – by GLA 7.3 7.4 (0.8)Weighted average lease period by GMR (years) 6.3 6.2 1.0Weighted average lease expiry (years) 3.0 3.2 (5.3)% of net property income 36.0 45.8 (21.4)Average annualised property yield (%) 7.8 10.4 (25.0)


Retail portfolio performanceDuring the year, Redefine’s retail portfolio value increased by R8.8 billion, a 73.3% gain on the previous year. Turnover in non-co-owned centres grew approximately 10%, and 6.7% on a comparable basis. These numbers are largely in line with peers and the greater retail market. Development disruption at some of our larger centres has been a drag on turnover growth, however we are confident that the trend will reverse once building works are complete. There has been some upward creep in rent to turnover ratios, but they are still generally in a healthy range, averaging 6.5% to 7%. The vacancy rate has increased by 0.4% across the portfolio, which we do not believe is concerning given the current macro-environment. The retention rate was 80% this year, with an average growth in renewal rentals of 4.0%, a satisfactory result in a tough market.

Footfall trends remain largely static, with average monthly footfalls increasing approximately 1% across the portfolio during the year. While densities are being driven by improved spend per head figures, less frequent visits are a concern for categories that require impulse purchases and repeat visitors.

Performance divergences remained a key trend during the year. Brands that target the upper- income consumer or cash-based retailers focused on best product, best price and best offering continued to outperform, while brands that are largely credit dependent or operate in the over-competitive mass middle market are experiencing slowing sales performance.

We have benchmarked the performance of our centres. The chart shows that our centres largely bunch around the norm. Densities and rent to turnover ratios are in line with industry averages/medians, the centres are not nodally dominant and there is limited differentiation. The graph below highlights the opportunity to improve our average densities within the portfolio by focusing on improving the tenant mix and driving a greater market share of spend, despite the tough macro-climate.

Our leasing strategies are increasingly informed by detailed analytics of performance information. Master leasing plans are being put in place at all of the assets with a specific focus on reducing the number of under performing tenants while driving relevance and differentiation.

Rental affordability in retail is a function of turnover efficiency/trading densities. One of the retail division’s key strategic objectives remains maximising densities at our centres and thereby driving increased rental levels.

We expect continued tension in retail lease negotiations, and strategically we will need to manage the balance between escalations and vacancies. Cannibalisation naturally leads to higher occupancy costs, which will continue to remain under pressure from increasing administered costs.


RETAIL GLA BY TYPE (%)


2015

2014

CENTRE PERFORMANCE COMPARISON

Gro

ss r

ent t

o sa

les

ratio

(Ann

ualis

ed)

8.0%

6.0%

4.0%

2.0%

0.0%R0 R10 000 R20 000 R30 000 R40 000 R50 000

10.0%

12.0%

14.0%

Annual trading density2014 2015

4.3% RETAIL VACANCY SPLIT BY TYPE (%)


2015

2014

Matlosana Mall wins Best Shopping Centre Development AwardMatlosana Mall, which opened in October 2014, is a 65 000m2 development on the N12 highway on the eastern side of Klerksdorp. During the year, the mall was honoured with an award for Best Shopping Centre Development over 20 000m2 at the SACSC Retail Design and Development Awards (RDDA). The award seeks to acknowledge excellent shopping centre design together with its economic success within the South African property industry.

During 2015 the leasing team focused on:

• Early engagement with tenants

• Managing the mix of national and non-national tenants (differentiation)

• Negotiating store upgrades

• Approaching lease renewals with new thinking

New retail development projects completed during the year

Property DescriptionPre-let GLA

m2

Total GLAm2

Total cost R000

Yield%

Completion date

Matlosana Mall Regional shopping centre 56 800 65 179 1 022 916 6.8 Oct 2014

Retail redevelopment projects completed during the year

Property DescriptionTotal cost

R000Yield

%Completion

date

Mall @ Scottsville Phase 2 42 127 9.7 Oct 2014

Current retail redevelopments in progress

Property Description

Projected total cost

R000Yield

%

Projected completion

date

Southcoast Mall Alterations and additions 130 650 6.2 Sep 2015

Mall @ Scottsville Tenanting change 3 586 14.4 Nov 2015

East Rand Mall Alterations and additions 226 674 5.7 Aug 2016

Centurion Mall Retail redevelopment 318 431 7.1 Mar 2016

Kenilworth Shopping Centre Alterations and additions 196 234 6.0 Apr 2017

Totals 875 575 7.5

Retail developmentRedefine is in the process of significant improvements to its major centres such as Centurion Mall (R318 million), Southcoast mall (R130 million), East Rand Mall (Redefine’s share R172 million) and Kenilworth Centre (R196 million) to expand and protect the markets they serve. Plans to improve other centres such as Benmore Gardens, The Boulders and possibly N1 City are under consideration and negotiation with key national retailers.


Future retail redevelopments in progress



R000Yield

%


date

Stoneridge Mall Mall upgrade 41 289 1.4 Jan 2016

Retail acquisitions and disposalsWe continued to reshape our portfolio with R8.8 billion of acquisitions across the retail portfolio, which includes Fountainhead.

During the year, we secured the takeover of Fountainhead Property Trust’s portfolio. Redefine has acquired all of Fountainhead’s assets including the entire Fountainhead property portfolio. Fountainhead’s property portfolio comprises 41 properties, of which 70% by value are prime retail assets.

During the year, we disposed of R35 million of non-core, non-regional centres, recycling the capital into acquisitions where we can generate higher returns as detailed in the table on page 21. In the coming year, we expect to conclude further disposals. We currently have retail properties valued at R471 million either under offer or in the market,

Retail acquisitions transferred during the year

Property ProvinceDate of transfer

GLAm²

Purchase price R000

Yield%*

Purchase price

R/m²*

JD Dwarsloop – 25% (1) Gauteng 10-Oct-2014 N/A 8 750 N/A N/A

Centurion Mall (2) Gauteng 03-Aug-2015 119 132 3 705 248 6.6 31 102

Blue Route Mall (2) Western Cape 03-Aug-2015 55 501 1 201 696 7.1 21 652

Kenilworth Centre (2) Western Cape 03-Aug-2015 48 941 865 676 7.8 17 688

N1 City Mall (58%) (2) Western Cape 03-Aug-2015 36 968 795 718 7.9 21 524

The Boulders Shopping Centre (2) Gauteng 03-Aug-2015 49 203 764 293 8.5 15 534

Benmore Gardens Shopping Centre (2) Gauteng 03-Aug-2015 24 091 617 681 7.7 25 639

Bryanston Shopping Centre (2) Gauteng 03-Aug-2015 13 686 292 705 8.3 21 387

Rosebank Mews (2) Gauteng 03-Aug-2015 7 293 98 001 8.9 13 437

Stoneridge Shopping Centre Gauteng 01-Apr-2015 51 917 480 000 8.0 9 246

406 732 8 829 768 7.3 21 688

(1) Property held for future development(2) Acquired with an effective commercial date of 1 March 2015 – Fountainhead portfolio(*) Calculation of yield and purchase price per m² excluded property held for future development and vacant land


Retail disposals transferred during the year

Property ProvinceDate oftransfer

GLAm²

Selling price R000

Yield%*

Selling price R/m²*

Scott Street Mall KwaZulu-Natal 26-Sep-2014 17 666 46 295 9.3 2 621

Kopanong Shopping Centre (2) Gauteng 08-Dec-2014 10 708 150 777 10.2 14 081

Hammanskraal Shopping Centre (2) Gauteng 08-Dec-2014 11 286 106 603 10.2 9 446

Proteapoint Shopping Centre (2) Gauteng 08-Dec-2014 3 863 37 115 11.4 9 608

Dobsonpoint Shopping Centre (2) Gauteng 08-Dec-2014 3 863 39 724 10.1 10 283

Meadowpoint Shopping Centre (2) Gauteng 08-Dec-2014 4 558 54 797 10.2 12 022

Pimville Square (2) Gauteng 08-Dec-2014 4 290 35 984 10.9 8 388

2 Dock Road (1) Western Cape 15-Jan-2015 N/A 38 000 N/A N/A

West Street Parkade Gauteng 26-Jun-2015 3 385 45 000 14.2 13 294

423/429 Church street KwaZulu-Natal 29-Jul-2015 4 000 26 300 15.4 6 575

Brightwater Commons Gauteng 18-Aug-2015 42 521 190 000 9.7 4 468

Metcash Trading Chloorkop Gauteng 19-Aug-2015 4 002 14 000 11.3 3 498

Berea Centre KwaZulu-Natal 20-Aug-2015 16 393 91 000 11.1 5 551

Sable Square Western Cape 24-Aug-2015 27 115 194 655 9.7 7 179

Middestad Centre Free State 26-Aug-2015 19 773 177 300 10.2 8 967

Mega Park Centre Free State 26-Aug-2015 5 960 48 265 10.2 8 098

Redefine Boulevard Western Cape 31-Aug-2015 10 905 80 385 10.1 7 371

Stanhope Bridge Western Cape 31-Aug-2015 6 406 86 875 10.2 13 562

Devonshire Parking Garage (738 bays) KwaZulu-Natal 31-Aug-2015 N/A 28 500 11.8 N/A

196 694 1 491 575 10.4 7 245

(1) Vacant land(2) The effective date of transfer was 8 December 2014(*) Calculation of yield and selling price per square meter excluded vacant land

Retail prospectsShopping centres and the industry are evolving. Retail has become an increasingly global, experiential business. Customer experience has become the quintessential driving force in retail – respecting time, intelligence, individuality, choices and needs of each shopper. Ultimately, as participants in the shopping centre community, we remain cognisant that our purpose is to create enjoyable and meaningful experiences for shoppers, not only as buildings to shop inside.

Looking ahead we see opportunities in:

• Growing our market share despite a lacklustre macro-environment

• Exploiting the interest of new entrants looking for space in South Africa’s premium centres

• Taking advantage of the spending power in those consumer markets and categories that are showing resilience

• Redeveloping and extending assets to introduce new tenants and differentiate the asset’s positioning

• Growing the contribution of non-GLA income to the division

• Changing the focus of centre marketing to drive footfalls and dwell times

• Managing levels of cannibalisation by pre-empting effects of new developments

• Leveraging our tenant relationships to approach lease renewals differently

• Managing costs effectively

• Continually improving at security measures at our malls and strategically investing in improved technology such as licence plate recognition software

• Installing full generator capacity at 13 retail centres

Centurion Mall, Centurion


Top 10 retail properties

Property Region ValueR000

GLAm²

Centurion Mall Pretoria 3 884 702 119 089Blue Route Mall Western Cape 1 256 000 55 501East Rand Mall (50%) Greater Johannesburg 1 187 000 31 257Golden Walk Greater Johannesburg 898 000 45 129Matlosana Mall Klerksdorp 893 000 64 624Kenilworth Centre Western Cape 868 500 48 947N1 City Mall (58%) Western Cape 843 900 37 241The Boulders Shopping Centre Greater Johannesburg 765 000 49 203Maponya Mall (51%) Greater Johannesburg 704 093 36 393Sammy Marks Square Pretoria 668 000 34 124Total 11 968 195 521 508

Balance of portfolio 8 848 130 801 993

Total portfolio 20 816 326 1 323 501

% of total retail portfolio 57 39

Top 10 retail tenants

TenantGLA

m²

Edcon 127 268

Shoprite 121 929

Pick 'n Pay 100 801

Woolworths 47 504

Pepkor 38 151

Foschini Group 35 120

Mr Price 34 256

Ferreiras (Pty) Ltd 25 732

Government 22 795

Truworths 20 869

Total 574 425

Balance of portfolio 679 246

Total portfolio* 1 253 671

% of total office portfolio 46

* Excluding vacancy


Sammy Marks Square, Pretoria



Office key performance statistics

Office

Description 2015 2014

Increase/(decrease)

%

Number of properties 139 112 24.1Total GLA (m²) (million) 1.5 1.2 21.0Vacancy (%) 8.5 7.2 18.1Asset value (R million) 19 457.6 12 612.8 54.3Average property value (R million) 141.0 125.3 12.5Valuation per m² (excluding undeveloped bulk) 13 397 11 868 12.9Value as % of portfolio 38.0 41.7 (8.8)Average gross rent per m² 140.2 110.2 27.2Average portfolio rental escalation (%) 9.2 8.4 9.8Tenant retention rate by GLA (%) 91.3 89.3 2.2Weighted average renewal rental growth (%) (8.0) 5.5 (245.5)Weighted average portfolio escalation (%) – by GLA 7.4 7.0 5.9Weighted average lease period by GMR (years) 4.9 5.17 (5.8)Weighted average lease expiry (years) 2.3 2.2 4.3% of net property income 42.9 38.2 12.3Average annualised property yield (%) 9.9 10.9 (9.2)

Office sector overviewThe office market remains under significant pressure due to low GDP growth, numerous new property participants as well as multiple new developments coming online, resulting in fierce competition. This culminated in severe pressure on rental renewals and initial rentals on new lets.

Challenging market conditions call for astute asset management to capitalise in core nodes such as Sandton, Bryanston, Rosebank and the Cape Town CBD, where consolidation and downsizing has increased demand for premium and A-grade premises. The current market trends show an increase in churn, consolidation and downsizing allowing tenants to move to central business nodes with specific demand for premium and A-grade premises.

This trend has resulted in an oversupply of lower grade assets in secondary nodes, an increase in premium grade development in core nodes, culminating in an over-supplied market. This is putting pressure on top-end asking rentals and speculative developments. However, areas such as Rosebank and Bryanston, where demand remains high, are trading below 6% vacancy thus remain strong.

A strong focus on tenant retention, remains key. We continue to improve our product offering to remain competitive, focusing on attractive viable pricing and working proactively to incentivise prospective tenants to relocate through innovative deal structures and tenant installation offerings combined with competitive rentals.

Amenities, as a strong draw card, in a product offering are a key differentiator. General amenities include green spaces, patios, restaurants, concierge services, hair dressers and salons, ATMs, data and wi-fi services as well as transport services such as the Gautrain and MyCity. Internationally, amenities as a product offering may be as high as 10% of the asset’s GLA, while locally; the average is around 3%.

The impact of an unstable power supply and uncertainties around security of future water supply, remain key risks. The potential for load-shedding continues to diminish business confidence and the delay in new power supplies coming online impacts the sustainability of existing businesses and curtails the growth of new business. These challenges offer us the opportunity to differentiate our properties through the use of backup power and green technology.

O R IOFFICE PORTFOLIO REVIEW

“THE PROPERTY WORLD IS CHANGING RAPIDLY AND WE ARE PROUD TO BE AT THE FOREFRONT OF THIS NEW ERA.” Mike Ruttell

OFFICE PORTFOLIO REVIEWRedefine’s office properties are situated in prime nodes, geographically spread across South Africa’s major metropolitan areas and are substantially let to blue-chip tenants. Driven by demand and opportunity, we develop innovative, operationally efficient and cost-effective environmentally friendly buildings to realise further value.

CHALLENGES

• Oversupply of office space continues to place pressure on rentals and returns across the office portfolio

• Sustained efforts to dispose of the government-tenanted office portfolio bore some fruit but remains a challenge going forward

• A number of government-tenanted buildings face lease expiries in the coming financial year

HIGHLIGHTS

Received the SAPOA Award for Innovative Excellence in Property Development for our 90 Grayston Drive development

Acquired the Leaf portfolio of properties, substantially enhancing the office portfolio in the Western Cape and Bryanston

Purchased 50% of the Alexander Forbes building in Sandton in line with our strategy of investing in properties with fully repairing long-term leases

Concluded an agreement to dispose of approximately 60% of our government-tenanted offices post year end

R533 million redevelopment of The Towers on the Western Cape foreshore completed

Increased Redefine’s exposure to A and premium buildings from 49% in 2014 to 64% in 2015

90 Grayston Drive, Sandton, Johannesburg



CASE STUDY: CAPE TOWN – A GROWING INVESTMENT

While nationally, our focus is on the disposal of most of our CBD properties due to various nodal challenges, including crime and inadequate municipal services, this strategy does not apply to our Cape Town properties. During the year, we have increased our investment in Cape Town and are pleased with the opportunities in the area, as demonstrated by our significant investment in The Towers in Cape Town’s CBD, resulting in a major transformation of the building.

According to the Cape Town Central City Improvement District (CCID) annual report, the value of property in the CBD is expected to increase to over R30 billion within the next five years. This was one of the many encouraging figures released in the report.

One of the most compelling reasons companies give for being based in the Central City is the location itself: A compact, accessible urban environment not only makes for better quality of life, but also facilitates business connections.

At Redefine, we pride ourselves on knowing the areas we work in and are pleased with the growing body of evidence that our increased investment in this area was sound and has long-term potential for growth.

OFFICE VALUE BY GRADE (%)

2015 2014• Premium 32 24• A-grade 32 25• Secondary 36 51

2015

2014

OFFICE VALUE BY LOCATION (%)

2015 2014• Greater Johannesburg 27 34• Sandton 26 33• Western Cape 28 15• Pretoria 10 11• KwaZulu-Natal 5 5• Other 4 2

2015

2014

OFFICE GMR BY LOCATION (%)

2015

2014

2015 2014• Greater Johannesburg 29 38• Sandton 19 13• Western Cape 25 19• Pretoria 15 18• KwaZulu-Natal 7 8• Other 5 4

92.4%OF DAYTIME AND

85.3%OF NIGHTTIMERESPONDENTSVOTED CAPE TOWNAS THE BEST CBDIN SOUTH AFRICA

93% are happy with the

OF COMPANIES

CBD as a locationto do business

Level of satisfaction about being in the CBDNine out of every 10 businesses in the CBD feel satisfied about being here, and the segment has increased consistently.

• 2012: 81% satisfied• 2013: 86% satisfied• 2014: 93% satisfied

Office portfolio performanceTaking into consideration the difficult operating environment, the Redefine office portfolio performed satisfactorily and is considered to be generally robust and defensive. The value of our office portfolio grew by 54.3% to R19.5 billion, which reflects both the acquisitions made during the year as well as an overall uplift in valuations.

The office portfolio is 32% let to P-grade tenants with a balanced tenant mix of 29% to single- tenants and 71% to multi-tenants. Net property income is underpinned by a weighted average lease expiry profile of 2.3 years. At year-end, office vacancies were at 8.5%, which is higher than the prior year’s 7.2% due to tough trading conditions.

The two largest core nodes in South Africa are the Cape Town central business district and surrounds at 1 500 000m2, and the Sandton precinct at 1 520 860m2, with a further 333 000m2 under development.

Redefine’s exposure in these areas is:

Sandton Cape Town CBD

16 buildings 11 buildings

222 383m2 GLA (92% occupied)

171 555m2 GLA (94% occupied)

45 303m2 GLA under development

We are significantly invested in Sandton. This node, however, faces the challenges of traffic congestion and continuous development resulting in oversupply in the market. Despite these challenges, there is still much opportunity in Sandton as it remains the main financial, legal and international head-office district of South Africa and Johannesburg’s premier business node.

Redefine continues to pursue the disposal of its non-core public sector tenanted office properties. During the year R400 million of government-tenant offices were disposed of. Subsequent to year-end Redefine concluded a agreement to dispose of a further 60% of these properties.

Older CBDs still find it difficult to reduce their high vacancies. Redefine holds a number of properties in Johannesburg, Pretoria and Durban CBDs. These areas have shown continued urban decline and therefore no longer meet the requirements of Redefine’s investment criteria. We are in the process of disposing of many of our non-core properties in these areas.

Redefine, however, is growing its investment in Cape Town, with the Cape Town CBD and surrounds showing continued potential for growth. During the year, we acquired the Leaf portfolio of properties, substantially enhancing our office portfolio in the Western Cape.

GRADE OF PROPERTY CONTRIBUTING TO THE 8.5% OFFICE VACANCY (%)

• Premium 8• A-grade 17• Secondary 75



Office acquisitions transferred during the year


GLAm²

Purchase price R000

Yield%*

Purchase priceR/m²*

16 Fredman (Discovery Building) (50%) Gauteng 01-Oct-2014 11 263 249 260 7.1 22 131Douglas Roberts Centre (2) Gauteng 03-Aug-2015 19 166 252 991 11.5 13 200Constantia Kloof 3 (80%) (2) Gauteng 03-Aug-2015 12 821 249 593 9.8 19 468300 Middel Street (2) Gauteng 03-Aug-2015 11 404 228 462 10.9 20 033CIB Insurance (2) Gauteng 03-Aug-2015 7 513 170 269 8.0 22 663Rosebank Corner (2) Gauteng 03-Aug-2015 9 627 113 938 8.8 11 835AMR Office Park (2) Gauteng 03-Aug-2015 14 389 105 834 5.8 7 355Grayston Ridge Office Park (2) Gauteng 03-Aug-2015 11 567 104 256 6.4 9 013240 Justice Mohamed Street (2) Gauteng 03-Aug-2015 7 807 91 682 11.4 11 744Kimberley-Clark House (2) Gauteng 03-Aug-2015 6 036 76 035 9.6 12 59718 The Boulevard (2) KwaZulu-Natal 03-Aug-2015 5 232 71 522 9.8 13 670Dunkeld Office Park (2) Gauteng 03-Aug-2015 5 628 70 069 9.9 12 450260 Justice Mohamed Street (2) Gauteng 03-Aug-2015 5 279 68 526 11.2 12 981Cedarwood House (2) Gauteng 03-Aug-2015 4 626 68 086 8.9 14 7192 Pybus Road (2) Gauteng 03-Aug-2015 4 531 63 181 9.2 13 944Delmat House (2) Gauteng 03-Aug-2015 4 187 55 081 6.9 13 156Nashua House (2) Gauteng 03-Aug-2015 7 551 51 252 (3.0) 6 788Sunridge (75%) (2) Gauteng 03-Aug-2015 3 921 43 411 10.7 11 071The Ambridge Office Park (2) Gauteng 03-Aug-2015 4 783 38 283 9.3 8 005Yellowwood House (2) Gauteng 03-Aug-2015 2 814 28 165 4.5 10 010Kent House (2) KwaZulu-Natal 03-Aug-2015 2 768 20 076 6.3 7 254Lakeside Place (2) Gauteng 03-Aug-2015 3 630 17 463 7.3 4 811RPA Centre (2) Gauteng 03-Aug-2015 1 716 10 741 7.6 6 258Black River Park (1) Western Province 01-Mar-2015 71 286 1 375 577 7.6 19 297Leaf portfolio bulk (1) Various 01-Mar-2015 N/A 44 143 N/A N/AWembley Square (1) Western Province 01-Mar-2015 32 464 689 000 7.5 21 224The Boulevard Office Park (1) Western Province 01-Mar-2015 30 690 689 000 7.8 22 450Silver Stream Business Park (1) Gauteng 01-Mar-2015 21 132 410 000 8.1 19 402Silver Point Office Park (1) Gauteng 01-Mar-2015 4 134 75 000 8.0 18 142Clearwater Office Park (1) Gauteng 01-Mar-2015 18 825 250 000 8.0 13 280Crawford House (1) Gauteng 01-Mar-2015 1 876 29 000 8.9 15 458Hampton Park (1) Gauteng 01-Mar-2015 21 210 332 000 8.3 15 653Centurion Gate (1) Gauteng 01-Mar-2015 11 538 219 000 8.6 18 981Aspelling Land (The Boulevard) (3) Western Cape 08-Jun-2015 N/A 12 500 N/A N/A

381 414 6 373 396 8.2 16 561

(1) Acquired with an effective commercial date of 1 March 2015 – Leaf portfolio(2) Acquired with an effective commercial date of 1 March 2015 – Fountainhead portfolio(3) Property held for future development(*) Calculation of yield and purchase price per m² excluded property held for future development and vacant land

Office disposals transferred during the year


GLAm²

Selling priceR000

Yield%

Selling priceR/m²*

125 Simmonds Gauteng 06-Nov-2014 5 119 30 000 0.0 5 861

Victoria Gate Gauteng 14-Nov-2014 2 418 19 500 0.0 8 065

Clarins Ormonde Gauteng 02-Dec-2014 2 000 12 188 9.2 6 094

Clarins Cape Town Western Cape 13-Jan-2015 360 3 500 9.9 9 722

West House Gauteng 01-Mar-2015 1 050 7 000 2.7 6 667

Redefine North Wharf Western Cape 13-Apr-2015 5 274 49 815 9.0 9 445

Optiplan House Gauteng 26-Jun-2015 1 829 18 100 11.4 9 896

11 Diagonal Street Gauteng 26-Jun-2015 32 972 296 520 11.2 8 993

Trust Bank Building Gauteng 21-Jul-2015 35 238 74 000 0.0 2 100

37 Bath Avenue Gauteng 28-Jul-2015 3 187 37 000 0.0 11 610

209 Smit Street Gauteng 03-Aug-2015 28 519 65 000 0.0 2 279

117 966 612 623 7.6 5 193

Office developmentRedefine has made good progress on development projects currently underway and there is a significant pipeline of potential redevelopment projects within our current portfolio.

Redefine’s premium-grade 90 Grayston Drive property (R504 million), which opened during 2014, earned a four star, Green Star SA design rating.

In Cape Town, ‘The Towers’, our 57 000m2 office refurbishment achieved practical completion in August 2015 and now boasts new facades, as well as upgraded main public thoroughfares and lobbies. In addition, the parking ratio has been increased from one bay per hundred square metres to three bays per hundred square metres.

The new Webber Wentzel headquarters, 90 Rivonia Road, in Sandton was also completed post year-end, with the first tenants moving in towards the end of November.

Construction on the 22 877m2 Rosebank Towers continued during the year, with completion expected in September 2016.

New office developments completed during the year


m2

Total GLAm2

Total costR000

Yield%

Completiondate

Eagle Park B-grade office block and warehouse 2 373 2 373 30 073 8.3 Dec 2014

Office redevelopments completed during the year

Property DescriptionTotal cost

R000Yield

%Completion

date

Essex Gardens Phase 6 22 425 7.9 May 2015

Commerce Square Parking construction 21 159 4.3 Feb 2015

AMR Alteration for CTI 45 259 9.8 Feb 2015

Total 88 843 8.0

New office developments in progress


m2

TotalGLA

m2


R000Yield

%


date

90 Rivonia Road Multi-tenanted offices 25 000 34 500 979 551 7.8 Nov 2015

Rosebank Towers Multi-tenanted offices 15 332 22 965 294 413 8.7 Sep 2016

Total 40 332 57 465 1 273 964 8.0

* Redefine 42.5% share



“THE DISTINCTIVE AND EVER CHANGING FACADE OF 90 GRAYSTON IS SET TO ESTABLISH THIS BUILDING AS A SANDTON LANDMARK.”Architect and Builder magazine

90 Grayston Drive: The confluence of artistry and sustainable functionality This trend-setting 16 storey commercial development is set to create a new benchmark for future commercial development.

The architectural expression of the building is contemporary, with glass used wherever possible to ensure maximum natural light and excellent views. Natural greenery has been used inside and outside the building, including a roof terrace, which serves to invite nature in while softening the sleek lines of the building.

The building boasts unique flexibility in its design with the layout of each office floor intended to ensure the optimum functional and spatial relationship between the service and served spaces.

The development has earned a GBCSA design and as built 4-star rating, positioning it among South Africa’s most innovative and recognisable buildings.

Current office developments in progress


Projectedtotal cost

R000Yield

%


date

Essex Gardens Phase 7 17 117 8.4 Nov 2015

The Towers, Foreshore Additions and alterations to offices 533 208 5.9 Sep 2015

Total 550 325 6.0

Future office redevelopment projects



R000Yield

%Projected

completion date

Rosebank Corner Commercial upgrade 15 738 15.3 Oct 2015

Esher Place Commercial upgrade 78 516 1.9 Oct 2015

Total 94 254 4.1

Top 10 office properties


GLAm²

Black River Park Western Cape 1 054 000 52 603The Towers Western Cape 878 000 54 31690 Rivonia Road Sandton 775 800 35 636115 West Street (50%) Sandton 765 412 20 546155 West Street Sandton 536 400 24 50190 Grayston Drive Sandton 482 000 19 651Thibault Square Western Cape 438 000 30 480Silver Stream Business Park Sandton 425 000 20 657Convention Tower Western Cape 401 000 17 854Commerce Square Sandton 380 000 16 893Total 6 135 612 293 136

Balance of portfolio 13 322 037 1 159 304Total portfolio 19 457 649 1 452 440

% of total office portfolio 32 20

Top 10 office tenants

TenantGLA

m²

Government 337 875Discovery Health 53 514Alexander Forbes 41 091Standard Bank 35 200Murray & Roberts 19 166Woolworths 18 636Amazon Development Centre 17 564Vodacom 14 746Medscheme 14 393ABSA 13 630Total 565 814

Balance of portfolio 692 040Total portfolio* 1 257 854


* Excluding vacancy

Office prospectsWe foresee no marked improvements in overall office vacancy rates in the year ahead with higher vacancy levels in certain nodes as new developments near completion. Green building projects will, however, give us an edge, particularly with those corporates looking for top-level office accommodation. Results released in July by IPD South Africa Annual Green Property Indicators 2014, showed that green buildings outperformed their conventional counterparts. Quality assets such as these, as well as other quality buildings in Redefine’s quality portfolio, are set to retain and attract tenancies.

Tenant retention will remain a focus going forward, as will reducing vacancies across the portfolio. We will also continue to focus on the redevelopment of well-located buildings rather than large-scale development of new buildings.



INDUSTRIAL PORTFOLIO REVIEWRedefine has a diversified industrial property portfolio, providing a wide spectrum of usable areas to cater for manufacturing, warehousing and small to medium sized enterprises. The balanced sub-sector spread continues to enhance Redefine’s defensive property asset pool.

CHALLENGES

• Macroeconomic conditions continue to place pressure on tenants

• Increasing vacancies around older industrial nodes is causing pressure on rental growth in older facilities

• Poorly maintained municipal infrastructure adds pressure on the functionality and commercial value of certain assets

HIGHLIGHTS

Redefine has entered into joint venture agreements with key role players to secure large tracts of development land, giving way to new industrial precincts along major arterial routes around South Africa

Concluded the transfer of the Macsteel property portfolio of 27 properties for R2.7 billion, measuring 552 641m²

Substantially re-let DC Cato Ridge vacated by Ellerines during 2014

Restructured the industrial management division by incorporating specialised asset management to enhance business outcomes

O R IINDUSTRIAL PORTFOLIO REVIEW

GLA (%)

2015 2014• Warehousing 10 38• High grade/high tech 9 24• Light manufacturing 16 26• Industrial units 45 9• Modern logistics 20 –• Other – 3

2015

2014

VALUE BY TYPE (%)

2015 2014• Warehousing 9 39• High grade/high tech 8 26• Light manufacturing 12 18• Industrial units 41 10• Modern logistics 22 –• Other 8 7

2015

2014

Industrial sector overviewWhile vacancies remain high amongst older industrial and warehousing units, predominantly serving the manufacturing industries, demand continues to grow for new highly efficient logistics and warehousing units along main arterial routes.

The older industrial nodes were historically established on the edge of cities and towns and had over time become surrounded by industrial township extensions and in certain cases new residential areas. As a result, the roads and stormwater infrastructures to the older industrial nodes are under pressure in coping with the attenuated hard surfaces and increased heavy vehicle traffic.

Through the proclamation of reclaimed mining land and unproductive agricultural land, new warehousing and business precincts were established along main arterials. These modern logistics parks are now fully developed and unable to satisfy the demand for warehousing with large volumetric capacity. As a result, developments in the industrial sector are primarily driven by the sustained demand for modern logistics warehousing.

Conversely, older, less efficient warehousing is becoming increasingly obsolete. High property taxes have diluted the market rentals achievable, driving the value of older industrial units downwards. As residual property values are diluted to the extent where rental income growth become muted, redevelopment opportunities prevail through the demand for new logistics warehousing in key established areas. The higher rent achieved on newly developed and redeveloped modern logistics and multi-warehousing units improves the longevity of these preferred assets in the industrial sector.

Further drivers for new modern logistics facilities are:

• More balanced building coverage to yard area to accommodate vehicle staging and reticulation

• Higher clear height to eaves internally to accommodate the range of improved material handling equipment

• Improved flat floors to carry racking post loads of 9 tons to 12 tons depending on client preferences

• Mezzanines for fine picking areas

Industrial key performance statistics

2015 2014Increase/

(decrease) %

Number of properties 106 69 53.6

Total GLA (m²) (million) 2.0 1.2 63.0

Vacancy (%) 3.8 5.3 (28.3)

Asset value (R million) 10 495 5 602 87.4

Average property value (R million) 100.0 81.2 23.1

Valuation per m² (excluding undeveloped bulk) 5 367 4 669.8 14.9

Sector value as % of total portfolio 20.5 18.5 10.8

Average gross rent per m² 42.3 42.5 (0.4)

Average portfolio rental escalation (%) 8.7 8.0 8.5

Tenant retention rate (%) 89.1 76.8 16.0

Weighted average renewal rental growth (%) (5.0) 4.4 (213.6)

Weighted average portfolio escalation (%) – by GLA 7.8 7.9 (1.4)

Weighted average lease period by GMR (years) 7.7 6.7 14.0

Weighted average lease expiry (years) 5.8 4.3 36.5

% of total net property income 21.0 16.0 31.3

Average annualised property yield (%) 8.6 10.3 (16.5)Macsteel, Boksburg, Greater Johannesburg


Redefine’s industrial portfolio delivered a weighted average portfolio escalation growth of 7.8% and weighted average lease period of 7.66 years.

Our tenant retention ratio of 89.1% was impacted primarily by three tenants in business rescue, events that are beyond our control, namely Duro Pressings in Alrode and Ellerines (affecting our revenue in Cato Ridge) and DHL’s premature exit from their facility in Jetpark. These events caused management to intensify efforts to re-let the unforeseen vacancies. By year-end we secured new tenants for 81% of this space and negotiations are in progress to let the balance.

Industrial acquisitions and disposalsDuring the year, 38 properties were acquired for a combined purchase consideration of R4.3 billion, including land and development properties.

Redefine concluded the acquisition of a portfolio of 28 industrial properties from leading steel supplier Macsteel for R2.7 billion with a 12-year triple net lease, thus improving the defensive nature of the portfolio. In a triple-net lease, the tenant manages the property and pays for maintenance, insurance and taxes.

Five properties that no longer met our strategic requirements were disposed of during the year for a combined selling price of R88.5 million.


GMR BY TYPE (%)

2015 2014• Warehousing 10 41• High grade/high tech 8 25• Light manufacturing 14 21• Industrial units 41 10• Modern logistics 23 –• Other 4 3

2015

2014

Industrial acquisitions transferred during the year

Property Province Date of transferGLA

m²

PurchasepriceR000

Yield%*

Purchase price

R/m²*

Sheffield Park – Moresport (50%) Gauteng 28-Oct-2014 6 496 42 500 8.4 6 543

Macsteel portfolio (1) Various 01-Nov-2014 558 676 2 700 000 8.7 4 833

BMG head office KwaZulu-Natal 08-Jul-2015 9 515 100 000 9.5 10 510

S&J industrial land (45%) (2) Gauteng 10-Jul-2015 N/A 312 432 N/A N/A

Robor (3) Gauteng 03-Aug-2015 120 277 587 311 8.2 4 883

Mifa industrial park (3) Gauteng 03-Aug-2015 34 198 149 713 10.7 4 378

Strydom industrial park (3) Gauteng 03-Aug-2015 24 600 113 771 11.1 4 625

Supreme industrial park (3) Gauteng 03-Aug-2015 31 058 103 779 9.5 3 341

Murrayfield (3) Gauteng 03-Aug-2015 16 822 75 868 14.0 4 510

Jupiter Ext. 1 (3) Gauteng 03-Aug-2015 11 508 43 092 5.9 3 744

Precision house (3) Gauteng 03-Aug-2015 604 1 800 16.5 2 980

Aviz labs (3) Gauteng 03-Aug-2015 2 871 16 746 17.6 5 833

816 625 4 247 012 6.3 4 818

(1) Portfolio consists of 28 industrial properties being acquired from Macsteel on a 12 year triple net sale and leaseback basis(2) Transaction effective 10 July 2015, property held for future development(3) Acquired with an effective commercial date of 1 March 2015 – Fountainhead portfolio(*) Calculation of yield and purchase price per m² excluded property held for future development and vacant land

Industrial disposals transferred during the year

Property ProvinceDate oftransfer

GLAm²

Selling price R000

Yield%*

Selling price R/m²*

3 Spartan Crescent Gauteng 11-Dec-2014 4 789 18 240 9.1 3 809

Macsteel VRN Welkom Free State 03-Jul-2015 5 550 8 892 8.7 1 602

Distro Dee Gauteng 08-Jul-2015 6 931 27 750 12.1 4 004

Fabric Park – Expropriation (1) Gauteng 17-Aug-2015 N/A 632 N/A N/A

Sentra Chem KwaZulu-Natal 26-Aug-2015 7 070 33 000 8.9 4 668

24 340 88 514 9.9 3 637

(1) A portion of Fabric Park was expropriated(*) Calculation of yield and selling price per square meter excluded vacant land

Industrial developmentA key pillar of our strategy is to build high-quality properties in prime areas and to redevelop existing properties where it is necessary to mitigate prolonged vacancies expected from functional challenges.

The R180 million redevelopment of Waltloo DC will be completed during October 2015. This property previously housed Premier Milling’s flower mill north east of the Pretoria CBD in the Waltloo industrial node. The obsolete buildings necessitated a redevelopment and a modern warehousing facility of 26 454m2. Designed from the ground up to provide an efficient, secure and productive environment for modern warehousing and logistics tenants. It is conveniently located close to the N1 and N4 freeways, it is easily accessible by employees living in the east of Pretoria, including Meyerspark, Mamelodi, Waverley, Silverton and Hatfield.

Part of Redefine’s primary strategy for its industrial portfolio includes the establishment of modern distribution centers with increased clear height to eaves, as modern racking and mechanical lifting equipment now allows for substantially higher stacking heights. Logistics clients have placed a premium on volumetric warehouse capacity and larger yard areas. As a result, these design criteria are being incorporated in Redefine’s design manifest.

5.1% INDUSTRIAL VACANCY SPLIT BY TYPE (%)

2015 2014• Warehousing 21 –• High grade/high tech 10 28• Light manufacturing 21 49• Industrial units 4 10• Modern logistics 44 13• Other – –

2015

2014

New industrial projects completed during the year


m2

Total GLAm2

Total cost R000

Yield%

Completion date

Waltloo New DC in Pretoria region – 26 285 179 905 8.8 Sep 2015

New industrial developments in progress


m2

Total GLAm2

Projectedtotal cost

R000Yield

%


date

Cornubia Mini Units Mini-unit facility, Cornubia – 27 660 188 488 9.3 Mar 2016

Fabric Park New industrial facility, Midrand – 13 000 101 869 8.1 May 2016

Total – 40 660 290 357 8.9

Future industrial development projects


m2

Total GLAm2

Projectedtotal cost

R000Yield

%


date

34 Wrench Road New industrial facility, Isando – 23 111 180 964 8.3 Sep 2015

Golf Air 3 New industrial facility, Cape Town – 13 879 78 606 10.7 Nov 2015

Total – 36 990 259 570 9.1

Future industrial redevelopment projects


Projectedtotal cost

R000Yield

%


date

Halifax Industrial upgrade 17 293 13.2 Oct 2015


Industrial prospectsThrough Redefine’s strategic acquisition of the Macsteel property tranche, comprising 32% of the industrial portfolio, the triple net lease escalating at 8% per annum provides a secure rental revenue stream for 12-years. Nevertheless, we remain cognisant that new lease rentals are expected to be under pressure across all sub-sectors for the coming year.

Developing generic warehousing facilities suitable for a wide spectrum of logistics and fast moving consumer goods operations will further enhance the quality of the industrial portfolio. We remain sensitive to the economic environment, focusing on implementing the best design elements at the lowest costs. Redevelopment of a number of well-located, older properties such as Fabric Park in Midrand (13 000m²) and 34 Wrench Road, Isando (24 000m²) are currently underway.

Sizable tracts of developable land have been acquired in Brackengate, Cape Town, S&J industrial land along the N3 near Germiston and in Cornubia Business Estate near Umhlanga. These tracts of land provide Redefine with a significant industrial development pipeline in the three main economic hubs of South Africa. Through Redefine’s dedicated asset management and development teams we are able to provide bespoke facilities for rent, joint ownership and in selected cases disposal of pre-identified land parcels in line with Redefine’s

investment strategy.

Top 10 industrial properties


GLAm²

Pepkor Isando Greater Johannesburg 730 000 107 017Robor Greater Johannesburg 616 800 120 277Macsteel Lilianton Boksburg Greater Johannesburg 502 187 73 071S&J industrial land Greater Johannesburg 316 325Premier Milling – Durban KwaZulu-Natal 315 000 38 926Ellerines Cato Ridge KwaZulu-Natal 312 525 50 333Macsteel VRN Roodekop Greater Johannesburg 296 685 57 645Macsteel Coil Processing Wadeville Greater Johannesburg 281 407 52 886Wingfield Park Greater Johannesburg 270 000 56 486Macsteel Tube & Pipe Usufruct Greater Johannesburg 260 683 68 822Total 3 901 612 625 463

Balance of portfolio 6 593 874 1 330 014

Total portfolio 10 495 486 1 955 477

% of total portfolio 37 32

Top 10 industrial tenants

TenantGLA

m²

Macsteel 552 641

Robor 120 277

Pepkor 107 017

Dawn 44 138

Premier Foods 38 926

General Motors South Africa 38 000

Masstores 31 830

Iliad Africa Trading 29 191

Edcon 26 071

Heron Industrial 23 803

Total 1 011 894

Balance of portfolio 843 468

Total portfolio* 1 855 362


* Excluding vacancy


GM Coega, Coega, Port Elizabeth


FULL MANUFACTURED CAPITAL REVIEW 2015 · Industrial 5 601 764 69 48 105 19 30 228 251 270 266 545...

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Transcript of FULL MANUFACTURED CAPITAL REVIEW 2015 · Industrial 5 601 764 69 48 105 19 30 228 251 270 266 545...