ABRIDGED PROSPECTUS OPENING OF OFFER TO INVITED INVESTORS TO SUBSCRIBE FOR SHARES AND LISTING OF LODESTONE ON THE ALTERNATIVE EXCHANGE OF THE JSE

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1 Lodestone REIT Limited (previously Lodestone Properties Limited) (Incorporated in the Republic of South Africa) (Registration number: 2010/017830/06) (JSE share code: LDO) (ISIN: ZAE ) ( Lodestone or the company ) ABRIDGED PROSPECTUS OPENING OF OFFER TO INVITED INVESTORS TO SUBSCRIBE FOR SHARES AND LISTING OF LODESTONE ON THE ALTERNATIVE EXCHANGE OF THE JSE Abridged prospectus relating to: - a private placement ( the private placement ) to raise up to R122.4 million by way of an offer for subscription to invited investors for up to 24 million ordinary shares in the share capital of Lodestone ( private placement shares ) at an issue price of R5.10 per private placement share; and - the subsequent listing of all of the issued shares of the company in the Diversified REIT s sector on the Alternative Exchange ( AltX ) of the JSE ( the listing ). This abridged prospectus is not an invitation to the public to subscribe for shares but is issued in compliance with the JSE Listings Requirements and the Companies Act (Act 71 of 2008) for the purpose of providing information to the public regarding Lodestone and to provide information to select investors with regards to the private placement. Invited investors will be contacted by and will receive application forms to participate in the private placement from the bookrunner. This announcement contains the salient information in respect of Lodestone, which is more fully described in the prospectus ( full prospectus ) which will be made available to invited investors from today. For a full appreciation and understanding of Lodestone, the private placement and the listing, the full prospectus should be read in its entirety. Terms defined in the full prospectus bear the same meaning in this abridged prospectus. 1. Introduction The JSE has granted Lodestone a listing of up to ordinary shares in the Diversified REIT s sector on the AltX of the JSE, in terms of the FTSE classification, under the abbreviated name: Lodestone, JSE share code: LDO and ISIN: ZAE , with effect from the commencement of trade on Wednesday, 25 February History and nature of business Lodestone REIT Limited (previously Lodestone Properties Limited) (Registration number: 2010/017830/06) was incorporated as a public company on 27 August Lodestone is an opportunistic property holding and investment company that was established to invest in property assets through the ownership or lease of immovable property in South Africa and abroad with a balanced strategy of investing in industrial, retail, residential and commercial properties directly and through the holding of property securities. The company undertakes asset management of its investment properties and property letting enterprises internally. The company has two subsidiaries, Lodestone Investments Proprietary Limited and Lodestone Investments 2 Proprietary Limited (collectively, the subsidiaries ). Each of the subsidiaries has been established to carry on business as an investment property holding and letting enterprise.

2 3. Investment and growth strategy The company s primary objective is to identify value-enhancing opportunities within the commercial, industrial, residential and retail sectors via direct property and listed equity investments, both locally and abroad, to create a stable and diverse portfolio of assets capable of generating secure and escalating free cash flows. This is achieved by its experienced and hands on management team focusing on proactive portfolio management and aggressive cost containment. 4. Prospects The board of Lodestone is confident that it will deliver growth in distribution of greater than 10% for the period ending 31 March 2016 as compared to the annualised dividend for the nine months ending 31 March 2015, further details of which are set out in the full prospectus and paragraph 8 below. With its opportunistic ability to invest in all real estate sectors both locally and internationally, the group will be able to add significantly to its property portfolio on a yield-enhancing basis for its investors. 5. Directors Name and age Jason Scott Cooper (45) National Diploma Marketing and Sales Managing director Name and age Inge Frances Pick (35) B.Com (Acc), B.Com (Hons)(Acc), CA(SA) Financial director Name and age Gidon Trope (34) B.Sc (Property) Executive director Name and age Herman Allan Zolty (34) B.Sc (Property) Executive director Name and age Craig Brabazon Hallowes (45) BA, LLB, ILPA-CPF, LLM (Taxation), MBA (with distinction)

3 Name and age Annalese Lucille Manickum (50) National Diploma Financial Accounting, South African Institute of Management (SAIM) Business Management/Property Development Programme (PDP) (Chairman) Name and age Ndhlabole Shongwe (50) B Admin and BA Hons (Public Management & Development) (Cum Laude) Name and age Michael Charles McNamara (51) National Higher Diploma Civil Engineering Name and age Jacques Johannes van Wyk (38) B Compt (Honours), CA(SA) All of the directors are South African nationals 6. Asset management The asset management function of the company and its subsidiaries is undertaken internally by its executive management, who are very experienced in this regard and who will implement the company s investment and growth strategy. Part of the asset management role of the executive management of Lodestone is to seek new investment opportunities for the company, to consider ways of optimising the performance of existing assets and, where necessary, to work on the disposal of assets which no longer contribute to the company s income growth strategy 7. Property management The property management function of the company and its subsidiaries, which relates to multi-tenanted properties, is outsourced on market-related terms to Broll Property Group Proprietary Limited, JHI Properties Proprietary Limited and RMS Property and Facilities Management Proprietary Limited. 8. Summarised forecast information Set out below are the summarised forecast statements of comprehensive income ( summarised forecasts ) for the period ending 31 March 2015 and the year ending 31 March 2016 ( forecast periods ). The forecast information is based on the assumption that R122.4 million is raised through the issue of 24 million private placement shares at an issue price of R5.10 per private placement share pursuant to the private placement. The summarised forecast for the period ending 31 March 2015 includes 3 months actual results to 30 September 2014 and forecast results from 1 October 2014 to 31 March 2015.

4 The summarised forecasts, including the assumptions on which they are based and the financial information from which they are prepared, are the responsibility of the directors of Lodestone. The summarised forecasts have been prepared in compliance with IFRS and in accordance with Lodestone s accounting policies. Forecast for the 9 months ending 31 March 2015 R 000 Forecast for the year ending 31 March 2016 R 000 Weighted average ordinary shares in issue and to be issued Basic earnings per ordinary share (cents) Headline earnings per ordinary share (cents) Dividend per ordinary share pre-listing (cents) Dividend per ordinary share post listing (cents) Annualised yield on ordinary shares based on R5.00 issue price per ordinary share 7.5% 8.3% The figures set out above are extracted from detailed forecasts for the period ending 31 March 2015 and the year ending 31 March 2016 and have been reported on by the independent reporting accountant, Deloitte & Touche. The detailed forecasts, the independent reporting accountants report on the detailed forecast and the assumptions on which the detailed forecasts are based, are set out in the full prospectus. 9. Purposes of the private placement and the listing The main purposes of the private placement and the listing are to: - provide investors, both institutional and private, with an opportunity to participate over the long-term in the income streams and future capital growth of the group; - enhance the liquidity and tradability of the shares; - provide the group with a platform to raise equity funding to pursue growth and investment opportunities in the future; and - enhance the public profile and general public awareness of Lodestone. 10. Details of the private placement The private placement will comprise the issue of up to 24 million ordinary shares in the company at an issue price of R5.10 per private placement share. There are no convertibility or redemption provisions relating to the private placement shares being offered in terms of the private placement. Private placement shares will be issued in dematerialised form only. No fractions of private placement shares will be issued. The private placement will not be underwritten. The listing is not conditional on raising a minimum amount in terms of the private placement. Shareholders are advised that applications in terms of the private placement must be for a minimum of private placement shares. The private placement shares issued in terms of the full prospectus will be allotted subject to the provisions of the MOI and will rank pari passu in all respects, including distributions, with all existing issued shares in the company. The private placement is open to invited investors only. The following parties may not participate in the private placement: - any person who may not lawfully participate in the private placement; and/or - any investor who has not been invited to participate; and/or - any person acting on behalf of a minor or deceased estate.

5 11. Salient dates and times Opening date of the private placement (09:00) on Closing date of the private placement (12:00) on Results of the private placement released on SENS on Notification of allotments to successful invited investors from Listing of shares and the commencement of trading on the JSE (09:00) on Accounts at CSDP or broker updated and debited in respect of dematerialised shareholders on 2015 Wednesday, 11 February Friday, 13 February Monday, 16 February Monday, 16 February Wednesday, 25 February Wednesday, 25 February Notes: 1. All references to dates and times are to local dates and times in South Africa. These dates and times are subject to amendment. Any such amendment will be released on SENS. 2. Invited investors must advise their CSDP or broker of their acceptance of the private placement in the manner and cut-off time stipulated by their CSDP or broker. 3. CSDPs effect payment on a delivery-versus-payment basis. 12. Application of proceeds The proceeds of the private placement will be used by Lodestone to settle interest-bearing debt and strengthen the balance sheet for ongoing investment activities. 13. Condition to which the private placement and the listing are subject The private placement and the listing are subject to the company maintaining a spread of public shareholders acceptable to the JSE at the point of listing on the AltX, being public shareholders holding not less than 10% of the issued share capital of the company to ensure reasonable liquidity. If the condition precedent fails, the private placement and any acceptance thereof shall not be of any force or effect and no person shall have claim whatsoever against Lodestone or any other person as a result of the failure of any condition. 14. Availability of the full prospectus and the investor presentation Copies of the full prospectus may be obtained between 08:30 and 17:00 on business days from Wednesday, 11 February 2015 to Wednesday, 25 February 2015 at the following addresses and on the company s website at Lodestone REIT Limited 3 rd Floor, Rivonia Village, Rivonia Boulevard, Rivonia, 2191 Java Capital Trustees and Sponsors Proprietary Limited 2 Arnold Road, Rosebank, Johannesburg, 2196 Link Market Services South Africa Proprietary Limited 13 th Floor Rennie House, 19 Ameshoff Street, Braamfontein, 2001

6 11 February 2015 Corporate advisor, bookrunner and designated advisor Independent reporting accountants and auditors Attorneys