SUMMARISED CONSOLIDATED RESULTS For the year ended 30 June 2016 STRATEGIC & OPERATIONAL OVERVIEW. Canal Walk (Cape Town, Western Cape)

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1 SUMMARISED CONSOLIDATED RESULTS For the year ended 30 June 2016 STRATEGIC & OPERATIONAL OVERVIEW Canal Walk (Cape Town, Western Cape) 1

2 STRATEGY & OVERVIEW South African REIT Focused on emerging markets (South Africa, sub-saharan Africa and South-Eastern Europe) Ownership of shopping centres, distinguished by: Quality, dominance and location Middle-to-higher income consumers Mix of flagship national and international retailers Preferred shopping destination in high-density metropolitan areas or key cities CapeGate (Cape Town, Western Cape) 3 CORPORATE HIGHLIGHTS Acquired 3 new shopping centres R3,8bn New development completed Achimota Retail Centre (Ghana) USD 54,5m New equity raised R700m* New corporate bonds issued R1,1bn* Disposed of two non-core assets R365m* * post year-end Canal Walk (Cape Town, Western Cape) 4 2

3 FINANCIAL HIGHLIGHTS June 2016 June 2015 % Change Distribution (cents) 619,9 543,0 14,2 Market capitalisation (Rbn) 31,6 29,4 7,3 Total assets (Rbn) 33,8 28,9 17,3 Loan to value (%) 30,8 22,9 34,5 NAV (R per share) 94,50 89,04 6,1 Total expense to income ratio (%) 36,0 36,0-5 DISTRIBUTION GROWTH Cents per share ,3% 6,0% 500 9,9% ,4% 9,4% 4,5% 7,5% 9,5% 13,1% ,0% ,7% 16,3% ,9% 13,4% ,2% st Half 2nd Half Total % growth 6 3

4 SHARE PRICE PERFORMANCE JULY 2015 TO 23 Aug SA Listed Property Hyprop Inv Ltd Post year-end June 2016 June 2015 % shares traded 71,8% 73,0% % offshore shareholders 26,3% 25,0% 20 Q1: 52,3 million* Q2: 46,0 million* Q3: 46,0 million* Q4: 30,4 million* 0 Jul Aug Sep Oct Nov Dec Jan * Number of shares traded per quarter Feb Mar Apr May Jun Jul Aug 7 INVESTMENT PROFILE Sub-Saharan Africa (excluding SA) R4,2bn Held for sale R864m South-Eastern Europe R2,0bn Investments 12% 6% 3% 1% Sold* R365m 78% Core South African portfolio R26,5bn Distributable income Held for sale R79m South-Eastern Europe R32m Sub-Saharan Africa (excluding SA) R84m 2% 6% 5% Sold* R33m 2% 85% Core Core South Core South African South African portfolio portfolio R1,3bn R1,6 R1,3bn * Post year-end 8 4

5 OPERATING PERFORMANCE Rosebank Mall (Johannesburg, Gauteng) SOUTH AFRICAN PORTFOLIO OPERATING PERFORMANCE Maintaining good rental growth and escalations Low vacancy Arrears improved to 0,5% (2015:0,6%) Renewals successfully completed Trading density growth slowing Edcon Canal Walk (Cape Town, Western Cape) 10 5

6 LEASING TERMS 12% 10% 8% 6% 4% 2% 6,3% Rental growth Contractual escalation 8,3% 8,2% 8,2% 8,1% 7,4% 7,6% 7,3% 0% LEASING ACTIVITY Leasing % of total portfolio Rentable area (m²) Rental growth (%) Contractual escalation (%) No. of leases Retail 19, ,4 8,0 504 Offices 21, ,2 8,3 64 Total 19, ,3 8,1 568 Lease renewal process Rentable area (m²) 4% Leases still outstanding Leases completed Total % 12 6

7 LEASE EXPIRY PROFILE 2016 / 2017 Retail Total rentable area (m²) Expiring area (m²) % Rentable area of centre The Glen , Canal Walk Cape Gate Mall Atterbury Value Centre Somerset Mall Willowbridge Hyde Park Corner Woodlands Boulevard Clearwater Mall Rosebank Mall Retail Offices Portfolio total VACANCIES Vacancies 30 Jun Jun Jun 2014 Retail (%) 0,8 1,3 1,2 Offices (%) 4,5 8,3 13,8 Total (%) 1,1 2,0 2,4 Tenant updates: First Starbucks in South Africa opened at Rosebank in April 2016 First H&M in Hyprop portfolio opened at Clearwater Mall in April 2016 Clearwater Mall (Johannesburg, Gauteng) 14 7

8 TRADING OVERVIEW Trading density growth Rent ratio (rental as % of turnover) 10% 10% 8% 6,8% 7,0% 7,4% 8% 6,9% 6,9% 7,1% 7,3% 6% 5,2% 6% 4% 4% 2% 2% 0% Jun 2013 Jun 2014 Jun 2015 Jun % Jun 2013 Jun 2014 Jun 2015 Jun DEVELOPMENTS Extensions and developments completed: Somerset Mall Woolworths & other R81m Clearwater Mall H&M extension R22m Under construction: Somerset Mall H&M R16m Atterbury Value Mart Checkers R31m Total spend on projects, new equipment and tenant installations R178m Under planning: Canal Walk Rosebank Mall extension R45m R122m 16 8

9 INVESTMENT IN SUB-SAHARAN AFRICA (excluding SA) Ikeja City Mall (Lagos, Nigeria) West Hills Mall, Accra, Ghana MARKET CONDITIONS Negatives Weakening of local currencies USD liquidity and availability Lower economic growth in 2016 Positives Defensive portfolio - able to withstand headwinds Located in key cities - economic growth higher than country average Portfolio largest and best quality in sub-saharan Africa 18 9

10 CURRENCIES EXCHANGE RATE VOLATILITY Indexed 2,5 Ghana Nigeria Zambia RSA 2,0 1,5 1,0 0,5 0,0 Sep 2013 Dec Mar Jun 2014 Sep Dec Mar Jun 2015 Sep Dec Mar Jun INCOME PRODUCING PROPERTIES INVESTMENT IN SUB-SAHARAN AFRICA (EXCL. SA) Centre City & country Hyprop % share Rentable area m² Vacancy % rentable area Foot count / m² Accra Mall Accra, Ghana 17, West Hills Mall Accra, Ghana 16, Achimota Retail Centre Accra, Ghana 28, ,0* 28 Manda Hill Lusaka, Zambia 68, ,7 22 Ikeja City Mall Lagos, Nigeria 75, ,3 30 Average 4,0 * 8 months of trading - opened in Nov

11 DEVELOPMENTS Achimota Retail Centre (Accra, Ghana) Accra Mall (Accra, Ghana) Kumasi City Mall (Kumasi, Ghana) Opened in October 2015 Redevelopment of food court and 1 000m² extension Cost USD 9,5m Completed in April 2016 Under construction - Opening April INVESTMENT IN SOUTH- EASTERN EUROPE Delta City (Belgrade, Serbia) West Hills Mall, Accra, Ghana 11

12 STRATEGY & STRUCTURE Strategy To acquire or develop high-quality shopping malls Size of EUR 1bn within 5-years (currently EUR 203m) Will partner with strong local developers/owners signed letters of intent Attractive income yields Low cost of bank funding Company structure Hystead established in the UK 60% shareholding Secured EUR funding 23 FOCUS ON EMERGING MARKETS Less competition / can acquire better quality centres Strong economic growth off a lower base Available skilled labour Better return on investment Lower taxes Delta City (Belgrade, Serbia) 24 12

13 INCOME PRODUCING PROPERTIES Centre City & country Hyprop % share Rentable area m² Vacancy % Rentable area Foot count / m² Delta City Belgrade, Serbia Delta City Podgorica, Montenegro Potential expansions: Belgrade (Serbia) Podgorica (Montenegro) Internal changes to improve tenant mix Increase rentable area by m² 25 FINANCIAL RESULTS Somerset Mall (Somerset West, Western Cape) 13

14 NET INCOME DRIVERS OF GROWTH Rbn 2,5 30 Jun Jun ,0 1,5 1,551 7,3% 1,665 10,8% 12,6% 8,7% 1,932 1,964 1,848 1,701 1,743 1,743 1,320 14,2% 1,506 1,0 0,5 0,0 Investment property income Add Rosebank Mall Add sub-saharan Africa (excl. SA) Add South-Eastern Europe Net interest and other 27 NET INCOME YEAR ON YEAR CHANGE R (51 085) (6 365) Jun 2015 Existing portfolio * Antecedent dividend excluded Rosebank Mall Sub-Saharan South-Eastern Africa Europe (Excl. SA) Net interest Properties sold Other 30 Jun 2016* 28 14

15 DISTRIBUTABLE EARNINGS STATEMENT 30 June 2016 (R 000) 30 June 2015 (R 000) % Change South African property portfolio ,5 Investments in sub-saharan Africa (excl. SA) ,4 Investments in South-Eastern Europe Word4Word Marketing Fund management expenses (64 922) (62 001) 4,7 Net interest ( ) ( ) Antecedent dividend Total distributable earnings RECONCILIATION TO DIVIDEND DECLARED 30 June 2016 (R 000) 30 June 2015 (R 000) Total distributable earnings Total shares in issue at year-end Treasury shares in issue ( ) ( ) Shares issued, August Shares in issue for distributable earnings Dividend per share (cents) 619,9 543,0 Dividend per share growth (%) 14,2 15,

16 BALANCE SHEET EXTRACTS Hyprop s share 30 Jun 2016 (Rm) 30 Jun 2015 (Rm) % Change Investment property (South Africa) ,0% Investments in sub-saharan Africa (excluding South Africa) ,4% Held for sale Other assets Minority share 615 Total assets ,3% Total debt 9 926* ,3% Net asset value per share (R) 94,50 89,04 6,1% * Excludes EUR denominated debt 31 PROPERTY VALUATIONS SOUTH AFRICAN PORTFOLIO* Category Size (m²) Hyprop share (Rm) % change (from June 2015) Value (R/m 2 ) Average yield Shopping centres ,3% ,8% Value centres ,2% ,7% Stand-alone offices ,9% ,0% Total ,9% ,0% * Excludes properties sold post year-end 32 16

17 DEBT MANAGEMENT 30 June 2016 (Rm) 30 June 2015 (Rm) Bank debt South Africa USD (Rand equivalent) EUR (Rand equivalent) Debt capital market funding Corporate bonds Commercial paper Cash and cash equivalents (239) (138) Net borrowings Loan to value 30,8% 22,9% 33 SOURCES OF FUNDING R million Bank facilities (SA) DCM funding (SA) 15% 35% 32% 27% 30 Jun Jun 2015 % of total debt USD debt 33% 44% EUR debt 14%

18 DEBT AT FIXED RATES 30 Jun 2016 (%) 30 Jun 2015 (%) South African debt 89,6 96,7 USD debt 72,4 89,9 35 DEBT MATURITIES* 30 Jun 2016 (years) 30 Jun 2015 (years) Fixed rates and swaps South African debt 4,9 5,6 USD debt 3,7 4,1 Facilities South African debt 2,4 2,8 USD debt 3,6 4,2 * Excludes EUR denominated debt 36 18

19 COST OF FUNDING 30 Jun 2016 (%) 30 Jun 2015 (%) South African debt 8,9 8,4 USD debt 4,6 4,4 EUR debt 1,7-37 PROSPECTS Delta City (Belgrade, Serbia) 19

20 OUTLOOK & FOCUS SOUTH AFRICA OUTLOOK Low economic growth over medium term Interest rate further possible increases Credit rating possible downgrade FOCUS Improve tenant mix Maintain strong operational performance Refurbishments and extensions Disposal of non-core assets Clearwater Mall (Gauteng) 39 OUTLOOK & FOCUS SUB-SAHARAN AFRICA (Excl. SA) OUTLOOK Low economic growth Short-term currency volatility Possible economic recovery by end 2017/2018 FOCUS Bed-down new developments Improve operational performance Working towards future liquidity event Accra Mall (Ghana) 40 20

21 OUTLOOK & FOCUS SOUTH-EASTERN EUROPE OUTLOOK Good investment opportunities Strong economic growth International brands entering the market supports income growth FOCUS Unlock expansion opportunities More acquisitions Potential development opportunities Delta City (Belgrade, Serbia) 41 PROSPECTS FY 2017: Dividend growth of ± 10% Woodlands Boulevard (Pretoria, Gauteng) 42 21

22 APPENDICES Canal Walk (Cape Town, Western Cape) COMPANY STRUCTURE SOUTH AFRICAN PORTFOLIO Clearwater Mall Somerset Mall Hyde Park Corner SOUTH AFRICA 100% owned Co-owned Rosebank Mall Woodlands Boulevard CapeGate Atterbury Value Mart Offices Cradock Heights Canal Walk (80%) The Glen (75,15%) Held for sale Willowbridge Offices: Glenwood Lakefield Sold Somerset Value Mart Offices: Glenfield 44 22

23 COMPANY STRUCTURE SUB SAHARA AFRICAN PORTFOLIO Hyprop Investments Mauritius 37,5% 50% 75% SUB- SAHARAN AFRICA 100% owned AttAfrica (Mauritius) 50% Manda Hill (Zambia) Ikeja City Mall (Nigeria) 47% 45% 75% 75% Accra Mall (Ghana) West Hills Mall (Ghana) Achimota Retail Centre (Ghana) Kumasi City Mall (Ghana)* * Under development 45 COMPANY STRUCTURE SOUTH-EASTERN EUROPE PORTFOLIO Hystead Limited (established in the UK ) SOUTH- EASTERN EUROPE 60% owned* 100% Delta City Belgrade (Serbia) 100% Delta City Podgorica (Montenegro) * Secured EUR funding 46 23

24 TRACK RECORD Rbn LTV % Investment property 33,4 29,4 31,6 Market cap 28,6 26,4 LTV % 20,2 18,7 19,0 19,3 17,4 17,7 26,2% 30,8% 12,9 26,6% 23,1% 22,9% 23,1% Jun 2011 Jun 2012 Jun 2013 Jun 2014 Jun 2015 Jun % 45% 30% 15% 0% 47 DEBT MATURITY PROFILE FIXED RATES AND SWAPS* Rm Average maturity: South African debt 4,9 years USD debt 3,7 years Bank facilities USD Funding June 17 June 18 June 19 June 20 June 21 June 22 June 23 June 24 * Excludes EUR denominated debt 48 24

25 DEBT MATURITY PROFILE BANK FACILITIES AND DCM Rm Average maturity: South African debt 2,4 years USD debt 3,6 years Bank facilities Bonds / Commercial paper USD Funding June 17 June 18 June 19 June 20 June 21 June 22 June 23 June % GROSS RENT TO TURNOVER 11% 10% 9% 8% 7% 6% 5% % Gross rent to turnover 14% 1% 2% 1% 9,7% 9,1% 8,9% 8,9% 5% 8,3% 12% 7,9% 7,3% 7,1% 6,7% 5,4% Deterioration Improvement Portfolio average: +7,3% (2015: +7,1%) 3% 1% 3% 0% 1% 4% 4,4% 3% 2% 1% 0% The Glen Shopping Centre Canal Walk Hyde Park Corner Atterbury Value Mart Clearwater Mall Rosebank Mall Woodlands Boulevard Somerset Mall CapeGate Mall Somerset Value Mart Willowbridge Mall 50 25

26 TRADING DENSITY Per month (R/m²) % Average portfolio growth: +5,2% (2015: +7,4%) % % % % % % 3% % 9% % Hyde Park Corner Canal Walk Somerset Mall Clearwater Mall Willowbridge Mall Rosebank Mall Somerset Value Mart Woodlands Boulevard Cape Gate Mall The Glen Shopping Centre Atterbury Value Mart 51 REVENUE SPREAD 12 MONTHS June 2016 June % 2% Retail rental 4% 2% 5% 7% 3% Municipal cost recovery Operating cost recovery 5% 6% 3% Customer parking 20% 59% Storerooms & other 21% 59% Office rental Turnover rental 52 26

27 TOP 8 SA PROPERTIES Canal Walk (80% undivided share) Clearwater Mall Rosebank Mall Woodlands Boulevard Region Cape Town Region Johannesburg Region Pretoria Region Pretoria Total rentable area (m²) Total rentable area (m²) Total rentable area (m²) Total rentable area (m²) Vacancy levels 1,2% Vacancy levels 0,5% Vacancy levels 0,9% Vacancy levels 0% Foot count/m² 12 Foot count/m² 10 Foot count/m² 16 Foot count/m² TOP 8 SA PROPERTIES (cont.) Somerset Mall The Glen (75,15% undivided share) Hyde Park Corner CapeGate Regional Region Cape Town Region Johannesburg Region Johannesburg Region Cape Town Total rentable area (m²) Total rentable area (m²) Total rentable area (m²) Total rentable area (m²) Vacancy levels 0% Vacancy levels 2,0% Vacancy levels 0,5% Vacancy levels 0,2% Foot count/m² 13 Foot count/m² 14 Foot count/m² 15 Foot count/m²

28 DISCLAIMER FORWARD-LOOKING STATEMENTS This document contains forward-looking statements that, unless otherwise indicated, reflect the group s expectations as at 30 June 2016 Actual results may differ materially from the group s expectations if known and unknown risks or uncertainties affect its business, or if estimates or assumptions prove inaccurate The group cannot guarantee that any forward-looking statement will materialise and, accordingly, readers are cautioned not to place undue reliance on any forward-looking statements The group disclaims any intention and assumes no obligation to update or revise any forward-looking statement even if new information becomes available as a result of future events or for any other reason, other than as required by the JSE Listings Requirements 55 28