Africa Direct Property Development Fund

Property as an asset class provides excellent diversification from equities and other asset classes; and it remains a good inflation hedge.

07The Investment Strategy And Process 08

Investment Objective 08

Investment Philosophy 08

Return Objective 09

Risk Profile 09

Identification of Target Markets 09

Asset Acquisition 09

Project Choice 09

Deal and Project Process 09

Country Risk Mitigation 09

Investment Exit 09

08Fund Advisory Team 10

09The Fund 11

01Introduction 04

02Access the new frontier – Africa 04

03The STANLIB Africa Direct Property Development Fund 05

04Corporate Structure 05

05Nature of business and strategy of the Fund 05

06The Investment Case 06

Nigeria: A darling for investors 06

Kenya: Key moments ahead 07

Sub-Saharan Africa – Shortage of quality property 07

Unsatisfied Investment Demand for Property 08

4

IntroductionSTANLIB Limited, through its STANLIB Direct Property Investments Franchise has launched The STANLIB Africa Direct Property Development Fund Limited (the Fund). The Fund is primarily focussed on retail led developments which will make up between 60% and 80% of its portfolio. While STANLIB does have investments in listed property in Africa, this is its first direct property development fund to be launched on the continent. The Fund will invest in quality real estate developments in carefully chosen economically growing nodes in sub-Saharan Africa with a focus primarily on Nigeria and Ghana in West Africa and Kenya and Uganda in East Africa. Investments will exclude South Africa and the Common Monetary Area, The Fund’s objective is to achieve long-term capital appreciation by investing in diversified portfolio of quality property developments projects. The graph below depicts STANLIB activity and presence on the continent, including opportunities we are able to leverage from, a wider Standard Bank Group footprint.

South SudanFirst Asset Manager to manage money in South Sudan

UgandaSTANLIB was the fi rst asset manager to set up shop in 2002

KenyaStandard Bank made strategic acquisition of CfC Bank

TanzaniaStandard Bank current physical presence

SwazilandAUM of +E4.5 billion and biggest manager with local presence

LesothoSTANLIB launched the fi rst unit trust in Lesotho as part of the Lesotho Government’s privatisation initiative

South AfricaLargest Management Company in Africa

BotswanaCurrently has the biggest unit trust platform in the country and running the biggest Money Market Fund in Botswana

NamibiaLaunched the fi rst Property Unit Trust in Namibia in 2007

W

S

E

NigeriaStandard Bank made strategic acquisition of IBTC Chartered Bank

GhanaStandard Bank current physical presence

Property is on the rise in Africa. Africa is urbanising at a faster rate than India and China given the huge resource boom in various states propelling growth in an untapped middle class. The vibrant African continent has 54 countries, each with populations in excess of one million people. Increasing political and economic stability is making the continent an attractive investment prospect globally.

Particularly in the direct property asset class where there is a strong supply-demand imbalance across retail, commercial, industrial and residential markets. This is particularly true for a majority of African cities where there is a massive retail shortage, lack of high grade office space, deficiency of industrial space and an increasing need for warehousing and logistics centres as retailers start to enter these budding markets.

Furthermore the lack of good road and public transportation creates demand for housing near work locations. Property is both an enabler of, and a beneficiary of economic development. Wherever there is growth, investments in property tend to thrive. Property is also the world’s largest asset class, including attributes of both equities and bonds. The contractual nature of net income from quality property provides a stable, growing income stream and reduces risk.

Property as an asset class provides excellent diversification from equities and other asset classes; and it remains a good inflation hedge. Generally both rentals and property values keep pace with inflation, ensuring real returns and stable, long-term growth.

Access the new frontier – Africa

5

STANLIB Africa Direct Property Development Fund’s (“the Fund”) objective is to invest through a Mauritian investment vehicle catering for investment in core commercial real estate developments focused on Nigeria, Ghana, Kenya and Uganda, with an opportunistic approach to other economies in Sub Saharan Africa. This will satisfy African and international institutional investors who demand greater exposure and diversity to real estate on the continent given the global downturn in values in more mature property markets.

The Fund will be US dollar denominated and will target a gross annual internal rate of return (IRR) of 25% before fees. The Fund will be close ended, with an investment period of four years, and a harvesting period of four years (with an option to extend by a further two years). The Fund will target gearing of between 50% and 60% for its underlying assets. It is mainly aimed at investors in Africa, Europe and the Middle East. The Liberty Group has made a commitment to the

Fund (including a funding facility and equity) amounting to US$50 million which demonstrates the confidence the Group has in the Fund. The Fund is the brainchild of STANLIB Direct Property Investments (‘SDPI’), a franchise within STANLIB Asset Management Limited and a subsidiary of STANLIB Limited. STANLIB manages assets in excess of USD 50 billion* assets for over 400 000 retail and institutional clients and has a presence in eight African countries.

SDPI’s investment philosophy of focusing on investors with a long term investment appetite in quality real estate in carefully selected economically growing nodes combines macro and micro views from specialist teams with deep local market experience and networks, providing their investors with a perspective advantage of the physical property world in Africa. They plan to build six to eight centres of 10 000 – 20 000 square metres in Africa over the next eight years.*as at 30 June 2013, at a ZAR/$ rate of 1$=R10

The STANLIB Africa Direct Property Development Fund

Corporate Structure

STANLIB AFRICA DIRECT PROPERTY DEVELOPMENT FUND LIMITED

(Fund, incorporated in Mauritius and holding a GBC1 licence)

INVESTORS

Portfolio of equity and debt instruments in entities which hold interests in greenfield and brownfield property development

projects in Sub-Saharan Africa (held directly and via subsidiaries).

Limited portfolio of listed property securities, cash and cash equivalents

The Fund is registered as a public company incorporated in Mauritius. It has been approved by the Mauritian Financial Services Commission under the Securities (Collective Investment Scheme and Closed-end Funds) Regulations 2008 in Mauritius.

6

Africa now has more of the world’s fastest-growing economies than any other continent. According to Jones Lang La Salle, a global real estate services firm, Sub-Saharan Africa (“SSA”) markets comprise 8.1% of the world’s population, generate 1.3% of the world Gross Domestic Product (“GDP”), and represent 0.9% of the total world market capitalization. Over 2000-2009, 11 African countries grew at an annual rate of 7% or more – a rate sufficient to double the continent’s combined GDP in 10 years. Africa’s collective GDP in 2008 was roughly equal to Brazil’s or Russia’s, and the continent is among the world’s most rapidly growing economic regions.

Africa is home to an estimated one billion people and has a land mass that is more than three times that of the United States. Africa’s population is growing rapidly and by 2050 it is anticipated that the continent will be home to almost two

The Investment Case

The Fund will issue three main classes of shares:

Љ Class A Shares will entitle the shareholder the right to vote on all matters except those solely affecting the rights of another class of Shares. Furthermore, they shall have a special right to dividends and distributions in accordance with the provisions of the Constitution of the Fund.

Љ Class B Shares shall have the right to vote on all matters except those solely affecting the rights of another Class of Shares. In relation to proceeds of each Investment, the Class B Shares, after the Class A Shares have been paid their invested capital and Preferred Return, shall have a right to be allocated their invested capital, a Preferred Return as well as “Carried Interest” i.e. the disproportionate share of the investment proceeds.

Each Class B Share shall confer on its holder one vote, except that the aggregate voting rights of the Class B Shares shall at all times be greater than or equal to 10% of the aggregate voting rights of all shareholders on matters which require the voting of both A and B share classes.

Љ Class C Shares (Non-Voting) shall be subscribed by InvestCo, as nominee of the Fund Advisor. The Non-Voting Class C Shares will not participate in any distributions and shall be non-voting. The Non-Voting Class C Shares shall be non-redeemable and shall be held by InvestCo or any successor of the Fund Advisor. The Non-Voting Class C Shares are created and held in order to meet the Mauritian legislative requirement that the Fund has a class of non-redeemable shares.

Nature of business and strategy of the Fund

The Fund has been established in Mauritius as a Global Business Category licence holder with the primary objective of achieving long-term capital appreciation by investing in a diversified portfolio of quality property developments projects in Nigeria, Ghana, Uganda, Kenya and opportunistically in Sub Saharan Africa. Its investments will comprise principally of equity and possibly quasi-equity instruments in limited liability entities which in turn hold interest in property development projects. Limited investments will be held in listed property securities and cash for liquidity. Given the nature of property development projects and typical funding structures employed, there will be limited or no distributions during the Investment Period, as surplus cash will traditionally be used to pay back debt funding. Net distributions from investments and investments realised will be aggregated and distributed to Investors on a semi-annual basis.

billion people. It is also estimated to have 60% of the world’s total amount of uncultivated, arable land. Recently there has been a huge restoration of trust in the domestic economic environment from locals themselves, and a recognition that returns on investment in Africa can far outweigh those now available in the West.

A number of African governments have begun adopting economic policies aimed at energizing markets. These include privatising state-owned enterprises, allowing more business competition, opening trade, lowering taxes, and strengthening regulatory and legal systems. The benefit of these activities can already be seen in the increased reinvestment of profits by African businesses.

There are a number of continent-wide trends that positively support investment in Africa.

7

Sub-Saharan Africa Savings as % of GDP

Source: STANLIB Research

% o

f GD

P

262524232221

201918171615141312 2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

Private Sector Financial Flows (net) to Sub-Saharan Africa

Source: STANLIB Research

$ bi

llion

25201510

50

-5-10-15

-20 2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

Sub-Saharan Africa- % of people living on less than $1.25 per day

Source: STANLIB Research

% o

f pop

ulat

ion,

PPP

adj

uste

d

60

55

50

45

40 2015

2010

2008

2005

2002

1999

1996

1993

1990

These include:

Љ Positive growth outlook;

Љ Rising patterns in trade and investment flows;

Љ Democratisation;

Љ Urbanisation;

Љ Financial system penetration; and

Љ Middle class growth with increasing disposable income.

GDP by Country: 2011

Source: Business Monitor International

US$

Bill

ion

450400350300250200150100

500

Namibia Ghana Kenya Angola Algeria Nigeria South Africa

Sub-Saharan Africa real GDP growth

Source: STANLIB Research

% y

/y

8

7

6

5

4

3

2

1

01980-2002

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

There is growing demand for commercial and retail space in many SSA countries, fuelled by the strong GDP growth and increased democratization. The Standard Bank Group and many multinational companies are viewing SSA as an integral part of their growth strategy but are finding it extremely difficult to secure adequate commercial property in these markets to house their expansion.

The supply of suitable property has, in the past, been severely hampered by lack of access to capital (both equity and debt), leading to a chronic shortage of investment grade properties. In particular the rapidly growing formal retail sector in the region (fuelled by the aggressive expansion plans of South African retailers, including Shoprite and Massmart) is being frustrated by the lack of development capital available.

The latest Knight Frank/Citibank Wealth Report makes it clear that Africa and other emerging economies are key places where private property investors should now be

looking for real growth in the next decade. The report highlights that 80% of the 6,000 high net worth individuals who participated in the Knight Frank survey are either satisfied with or optimistic about the future wealth creation prospects in Africa, although 75% listed local political instability as a potential worry.

Residential property values in Africa rose by 8% in 2011. Coming off very low initial bases, African property proved to be one of the strongest performing asset classes in 2011. Urbanisation, facilitated by improved infrastructure has made it easier for developers to optimise utilisation by concentrating on property investments where people live.

Even though construction costs and professional fees were relatively high, superior ungeared property income returns of over 10% for retail, residential and industrial properties have been observed. The Fund aims to capitalise on this demand-supply imbalance by developing a portfolio of quality property assets.

Sub-Saharan Africa – Shortage of quality property

Unsatisfied Investment Demand for Property

The case of retail property development is largely one of demand and supply dynamics. On the one hand, we see the rise in retail options in an attempt to meet the strong demand for consumer goods. Large city populations are currently serviced only by a few malls. Figure below illustrates the extent to which populations are underserviced when it comes to formalised retail/shopping malls. In stark contrast to the rest, South Africa has a significantly higher number of malls servicing urban areas, in which vacancy rates are low, averaging between 1% and 3% for a majority of the malls.

This further strengthens the case for the demand for retail centres in Sub-Saharan Africa. Not only is there a shortage of physical commercial space, it is believed that there is significant unsatisfied demand from local and regional financial institutions to invest in this asset classes. At present there is a distinct lack of diversifying investment alternatives and it is thought that the creation of quality investment products (including property investment vehicles) will attract premium pricing from local and regional financial institutions.

City, Country Population (Million) Malls* Per CapitaJohannesburg, South Africa 3.8 77 1 mall per 49 400 peopleAbuja, Nigeria 1.9 4 1 mall per 475 000 peopleAccra, Ghana 2.3 2 1 mall per 1 150 000 peopleKigali, Rwanda 1.1 2 1 mall per 550 000 peopleLagos, Nigeria 10.2 6 1 mall per 1 700 000 peopleLilongwe, Malawi 0.8 2 1 mall per 400 000 peopleLuanda, Angola 4.5 1 1 mall per 4 500 000 peopleLusaka, Zambia 2.2 4 1 mall per 550 000 peopleNairobi, Kenya 3.4 12 1 mall per 283 000 peoplePort Louis, Mauritius 0.2 2 1 mall per 100 000 peopleWindhoek, Namibia 0.4 3 1 mall per 133 000 people

* Excludes shopping centres/complexes with less than 5000 square metres Gross Lettable Area Source: STANLIB

9

Nigeria has seen much economic and political progress over the past decade. The speed at which Africa’s most populous country has grown has seen it being touted by some analysts as having the potential to overtake the South African economy in terms of GDP by 2020. Nigeria’s GDP has increased five-fold since 2000, growing to US$244 billion by the end of 2011. Over the past five years, Nigeria has diversified its economic levers, thus decreasing its dependence on oil, and increasing agriculture and industry as a source of economic growth. Agriculture now constitutes 40% of the country’s growth, while the oil sector contributes about 14%, according to the latest data from the National Bureau of Statistics. As a result, non-oil growth in Nigeria has surpassed oil growth in the recent past. Since the first quarter of 2011, non-oil growth has been over 100 basis points higher than oil growth.

Following from the changing structure of the economy, the authorities are looking to “rebase” the country’s GDP, which is seen by many to mean that Nigeria’s GDP will rise. If the country’s GDP is revised upwards by 20%, it will move closer to the size of South Africa, with GDP at US$320 billion versus South Africa’s US$400 billion.

The global financial crisis presented a major opportunity for Nigeria to improve legislation and economic management. At the forefront of reform has been the consolidation and reform of the banking sector. Under the stewardship of the central bank, the Nigerian banking sector was consolidated, and the capital base increased from Naira 2 billion to a minimum of Naira 25 billion (US$138 million), while the number of banks significantly reduced from 89 to 24 at the end of 2012.

Nigeria continues to face significant infrastructure deficits, from roads to power infrastructure. The power generation deficit impacts negatively on the economy as it raises the cost of doing business as companies have to spend more on temporary or emergency power generation. However, the government has committed to meeting these deficits. In the 2013 budget of Naira 4.9 trillion, almost a third has been dedicated to capital expenditure.

As the population grows, and urbanization becomes a key feature, Nigeria needs increased social infrastructure such as housing, which is in deficit in major cities. According to the Minister of Finance, Lagos has a major housing deficit, which must be met immediately.

According to a Business Monitor International report, the value of residential and non-residential building industry will grow from US$1.1 billion in 2010 to US$2.2 billion in 2015, representing an average real growth rate of 10% per year.

The Nigerian consumer is also a major attraction to investors, firstly by the sheer number as Nigeria has a population of over 160 million people. Further, GDP per capita and income continue to grow, representing a real opportunity for investors. This is evident from the flows of Foreign Direct Investment (“FDI”) in Nigeria. In a recent report from the Central Bank of Nigeria, FDI flows into Nigeria amounted to US$4.3 billion to September 2012.

The Kenyan economy has made strong advances by way of developing modern day infrastructure, and now boasts one of the most sophisticated telecommunications and banking sectors on the African continent. However, road and rail infrastructure continue to lag behind, although the government, in partnership with the International Monetary Fund (“IMF”) and World Bank, are giving this area particular attention.

Despite challenges, Kenya has grown steadily in the last twelve years, from a GDP of US$12.6 billion in 2000 to US$32 billion in 2011. However, the economy continues to be largely tilted to agriculture, which employs over two thirds of the country’s workforce. In this context, seasonal rains, or lack of, have amplified effects on the economy through inflation and economic growth. A drought in the middle of 2011 saw inflation spike sharply and led to significant weakening of the currency, which further fuelled the inflation problem. Since then, the economy continues to stabilise gradually, although still vulnerable to internal and external shocks given the dependence on agriculture and significant exposure to Europe through exports.

Private Final Consumption as % of GDP

Source: Business Monitor International

% o

f GD

P

84

82

80

78

76

742005 2006 2007 2008 2009 2010 2011

Nigeria Kenya

10

As is the case in the rest of the continent, private final consumption as a percentage of GDP has risen over the past five years, proving the rising momentum of consumption and the growth of the consumer as articulated by many analysts.

“Real estate, renting and business services” was recorded at 32% higher in the first quarter of 2012 compared to the same quarter in 2005. Construction within economic activity in Kenya has risen over 50% in real terms. All this underlines the rising activity with respect to the services and property sector in an economy that is progressively growing.

More recently, we have seen economic activity in Kenya rebounding after slowing down in 2011/12. This was helped by improved macroeconomic stability, foreign investment in oil and natural gas exploitation, and favourable weather conditions which had previously negatively affected the economy.

Being the largest and most advanced economy in East Africa, Kenya’s regional location also presents good growth prospects as it is position to benefit from growing Uganda and a stabilising North and South Sudan. Authorities are working to improve the port on Kenya’s coast so as to service west and central Africa as a hub.

A positive sentiment has seen investors return to the market, and forging an equity market rally. On the back of this, the Kenyan Shilling strengthened 3% from its January low, ending March at 85.5 Shilling to the US dollar. A stronger and stable Kenyan Shilling is positive for inflation, as well as growth as lower inflation will open space for monetary easing, which would be good for growth as Kenya’s economic partners (such as Europe) struggle.

SSA: The most Attractive Private Equity DestinationThe Global Limited Partners Survey 2013 conducted by the Emerging Markets Private Equity Association (EMPEA) revealed that Private Equity investors view Sub-Saharan Africa as very attractive because of the increase in fund managers with a track record, significant investment opportunities, the dynamic of flow of entry valuations and fast-growing markets. Africa is viewed as the last frontier with positive demographic, economic and regulatory trends

Market Attractiveness Rankings 2009 - 2013

Source: EMPEA

% o

f GD

P

1

2

3

4

5

6

7

8

9

10

2009 2010 2011 2012 2013

Brazil Latin America (ex-Brazil)Sub-Saharan AfricaIndia Central and Eastern Europe

Most Attractive

Less Attractive

Nearly 54% of Surveyed Private Equity investors plan begin or expand investment in Sub-Saharan Africa over the next two years.

They survey also revealed that Regional funds are most likely to be preferred by investors seeking the Sub-Saharan markets that they have indicated to be of interest as illustrated in the diagram below.

Preferred Fund Vehicles for Accessing Opportunities in Sub-Saharan Africa

Source: EMPEA

Country-specific funds

Regional funds

Funds of funds

Pan-EM funds

Global funds with some EM exposure

26%

56%

6%

6%

8%

FUN

DS

PERCENTAGE

11

For the first time in the Survey’s nine-year history, Sub-Saharan Africa took the lead and none of the BRIC markets broke the top three most attractive markets for GP investment as viewed by LPs.

The Attractiveness of Emerging Markets for GP Investment Over the Next 12 Months – LP ViewsOverall Ranking

2013 2012 2011Sub-Saharan Africa 1 5 7Southeast Asia* 2 4 2Latin America (ex-Brazil) 3 1 4China 4 3 2Turkey 5 7 6Brazil 6 2 1Central and Eastern Europe 7 10 8Russia/CIS 8 8 10India 9 6 5Middle East and North Africa 10 9 9*Classified as “Other Emerging Asia” in 2011 and 2012

Net Return Expectations of 16% or more for select markets by Investors with Exposure, 2012 vs. 2013

Source: EMPEA

% o

f Res

pond

ents

100%

80%

60%

40%

20%

0%

China

90%

61%

Latin America

73%

63%

India

63%

38%

MENA

57%

38%

Russia/CIS

57%

38%

CEE

50%47%

2012 Survey 2013 Survey

Sub-Saharan Africa

57%

64%

LP’s planned changes to their EM PE Investment Strategy over the next two years

Source: EMPEA

Decrease or stop investing Begin investing Expand investing

Coun

trie

s

Sub-Saharan Africa

Southeast Asia

Latin America (ex-Brazil)

Brazil

China

Turkey

Middle East and North Africa

India

Central and Eastern Europe

Russia/CIS

United States

Western Europe

20% 10% 0% 10% 20% 30% 40% 50% 60%

Percentage of Respondents

2% 12% 37%

2% 9% 37%

2% 10% 30%

11% 4% 33%

14% 18%

9% 16%

16% 6% 18%

9% 8% 11%

4% 8% 11%

9% 16%

11% 11%

19% 35% Nearly 54% of all LPs surveyed plan to begin or expand investment in Sub-Saharan Africa, 49% in Southeast Asia and 46% in Latin America excluding Brazil. Sub-Saharan Africa is likely to see the greatest amount of new investor interest with 19% of LPs planning to begin investing in the region over the next two years, followed by Turkey and Southeast Asia.

With regard to return expectations, Africa is the exception to all other markets where expectations of returns of 16%+ are higher in 2013 than 2012. In all other markets fewer investors in 2013 than 2012 are expecting returns 16%+.

12

Investment Objective

The Fund seeks to invest primarily in the commercial property markets of Sub-Saharan Africa with a specific focus on Nigeria and Ghana in West Africa and Kenya and Uganda in East Africa, by identifying investment-grade retail, office, industrial and hospitality property development projects with the potential for long term capital appreciation.

An Investment may take the form of equity or quasi-equity, structured via a single asset holding vehicle. It is intended that majority or controlling stakes will typically be acquired in these single asset holding vehicles, depending on the circumstances.

The Investments may be held via incorporated entities in the various jurisdictions. The Fund has established an Investment Charter in terms of which the existing and prospective Investments will be assessed. The Investment Charter is one of the Founding Documents and each of which will be made available upon request and each of which should be read before investing in the Fund.

Fund Investment Philosophy

The Fund will seek to achieve superior returns for investors through building a diversified portfolio of “opportunity” and “sustainable” property development investments in SSA.

Property transaction opportunities are those in which value creation is achieved primarily through developments, use of high levels of leverage and active asset management and will deliver returns primarily in the form of capital appreciation.The Fund has identified five sustainability themes which it will pursue in development projects: water conservation, climate change management, smart energy management, smart materials and community engagement.

The Fund will adopt an Environmental and Social Governance (ESG) programme in alignment with world class benchmarks, including the Equator Principles. The Fund will seek to partner with progressive local landowners and property developers, who have long-term investment horizons, are sensitive to sustainability considerations and are able to secure community buy-in and planning permissions in a timely manner.

THE INVESTMENT STRATEGY AND PROCESS

Return Objective

The Company will target a gross compound annual internal rate of return on its aggregate portfolio of 25% per annum. Gross return is the absolute return of the fund over a stated period before any fund-level fees (incl. Advisory Fee and Carried Interest) and expenses are deducted.

Risk Profile

Taking into account the property development nature of the Fund, it will be classified as an “opportunity” / ”development” fund, with higher risk than a “core” or “income” property funds.

Identification of Target Markets

Target markets of the Fund will be located in sub-Saharan Africa, excluding the Common Monetary Area (CMA) in Southern Africa, which is comprised of South Africa, Swaziland, Namibia and Lesotho. The Fund’s primary focus will be cities and other large city centres principally in Nigeria, Ghana, Kenya and Uganda, where strong imbalances in the supply and demand for property exist.

Asset Acquisition

The Fund Advisor in conjunction with strategic partners will source suitable development projects which will be presented to the Board for consideration. In addition, the Fund Advisor will use its relationship within the Liberty Group and the Standard Bank Group to gain access to off market opportunities. Lastly, the Fund Advisor has access to a large number of South Africa retailers and other corporates with significant African expansion plans.

Project Choice

The Fund will have a predisposition toward retail shopping centres as it has the experience and track record of developing and managing large-scale retail shopping centres. The focus will be primarily on commercial property developments, with residential projects only as part of a mixed-use precinct. SDPI make use of internal and external research to provide a comprehensive macro and micro study for each investment and the surrounding environment. Research data is compiled and analysed, which is then intelligently applied to support and steer strategy and design, therefore enhancing profitability of investment returns.

13

Country Risk Mitigation

The Fund Advisor has received approval from the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, for a Master Contract for the Fund to provide cover for each investment in the Fund. MIGA provides investment guarantees to the private sector (i.e., the Fund) - against certain non-commercial risks (i.e. political risk insurance) to eligible foreign investors for qualified investments in developing member countries for various risk, including:

Љ Currency Transfer Restriction (including inconvertibility); Љ War and Civil Disturbance (including sabotage and

terrorism); Љ Expropriation (including creeping expropriation); and Љ Breach of Contract (for contracts between the project

and the Host Government)

Investment Exit

The Fund may follow a number of exit strategies, including: trade sale, portfolio sale, sale to joint venture partner/s, sale to existing land owner or sale to a Fund pursuing an income or “core” strategy. An exit through initial public offering (IPO) is also a possible exit option. Further to this, STANLIB and its parents, Liberty Group Limited and, ultimately, The Standard Bank of South Africa Limited are developing several property investment products, such as Real Estate Investment Trusts (REITs) in the Fund’s target countries. These investment products and vehicles are considered to facilitate in creating exit opportunities for the Fund.

Top Down Economic

Ƭ In-house Group research

Ƭ Sell-side research

Nodal Analysis

Individual Property Search

Financial Modeling / Feasibility

Invest/Dispose Redevelop

On-going Performance Review

Ƭ Socio-Economic Profile

Ƭ Consumer behaviour and needs

Ƭ Industry interviews

Ƭ Local and international tenant preferences

Ƭ Commercial activity heat map

Ƭ Infrastructure status

Ƭ Demand potential

Ƭ Local partner identification

Ƭ Site overview Ƭ Land due-

diligence Ƭ Partner due-

diligence

Ƭ Leasing strategy

Ƭ Expense projection

Ƭ Value engineering

Ƭ Funding: Equity & Debt

Ƭ Return criteria Ƭ Engineer an

exit strategy

Ƭ Property valuations

Ƭ Capital expenditure reports

Ƭ Leasing reports Ƭ Budgets and

variances Ƭ Building reports

Our investment process typically tracks the following steps:

SDPI are members of the South African Property Owners Association (SAPOA) and of the MSCI Investment Property Databank (IPD). IPD is the leader in performance benchmarking and in country research across all direct property sectors. SDPI subscribes to a range of IPD services which include:

Љ Quarterly retail benchmarking services Љ Nodal analysis

Љ Income and costs reports Љ Valuation reports

These memberships (amongst others) benchmark SDPI’s investments to the industry and therefore provide a gauge for SDPI to actively manage its portfolios in order to provide the best risk adjusted returns.

14

FUND ADVISORY TEAMThe Fund Advisor will reside in the SDPI Franchise and will comprise a core team of investment professionals and two executive members of SDPI in supporting roles, all with significant experience in property development, private equity, and property finance and investment. The SDPI Franchise team, through InvestCo, will invest up to U$5 million (Five million United States dollars) in the Fund and will also participate in the Advisory Fee and Carried Interest. The team’s remuneration will be performance-based and paid out of the Advisory Fee and Carried Interest.

The details of the core team involved are provided below:

Roberto Nunes Ferreira

Fund ManagerBA (Hons), M.Phil, MBA

Roberto has an M.Phil from the University of Johannesburg. He received his MBA in Banking and

Finance from the Manchester Business School, University of Manchester. He has 19 years of project finance, acquisition finance and private equity experience, all of which has been primarily focused on Africa. He Joined STANLIB in April 2013 as the Fund Manager of the STANLIB Africa Direct Property Development Fund. Previously he was at Harith General Partners, the manager of the Pan African Infrastructure Development Fund (PAIDF) and Managing Director of Aldwych. At Harith he was responsible for the PAIDF focus on energy, which included an investment in Aldwych Holdings Limited, an independent power developer focused solely on Africa.

Kgaogelo Mamabolo

Asset ManagerB.Sc (Hons)

Kgaogelo joined the Group in 2007 and has held several positions within the Direct Property Franchise. She

is currently Asset Manager for the STANLIB Africa Direct Property Development Fund; she worked as an Asset Manager for the Liberty Direct Portfolio and headed up Unlisted Properties at Liberty Properties. She is Past President of the South African Institute of Black Property Practitioners (SAIBPP), Past Chair of the Research Committee and National Councillor for SAPOA and the South African Council of Shopping Centres, and served on the board of the Property Charter Council.

Clinton Minnaar

Senior Portfolio AnalystB.Com (Hons)

Clinton holds a B.Com (Hons) degree from the University of Johannesburg with field of specialisation in

Investment Management. He is responsible for carrying out detailed research, financial modelling and feasibilities on the Fund’s investments. Clinton joined STANLIB in March of 2007 and has seven years industry experience including roles as a Performance and Quantitative Analyst, Assistant Fund Manager and co-founder of the Portfolio Analytics and Implementation Team.

Natasha Mutai

Asset Manager (East Africa)BA.BldgEcon (Hons), M.Const.Mgt

Natasha is a registered Quantity Surveyor in Kenya and holds a BA Building Economics (Upper Second

Honours) degree from the University of Nairobi, Kenya and a Masters of Construction Management from the University of New South Wales (NSW), Sydney, Australia. She has over 15 years’ experience in the real estate industry in East Africa. Prior to joining STANLIB Direct Property Investments, Natasha was Regional Head of Real Estate, East Africa at Stanbic Bank where she was responsible for developing the bank’s property finance business in the growing East African market with the intention of making it a leader in the Property Finance sector in the region.

Ruth Okal

Property Investment Manager: East AfricaBA LandEcon (Honors), MA Val & Prop. Mgt

Ruth joined STANLIB in 2013 as a Property Investment Manager, responsible for performance analysis of properties under STANLIB from Knight Frank Kenya Limited, where she gained experience within Commercial Agency, Property Management, Valuation, Market Research, Feasibility Studies and Development Advisory. Ruth obtained a BA in Land Economics and a Masters in Valuation and Property Management at the University of Nairobi. She is also a member of the ICT committee of the Institution of Surveyors of Kenya and is part of its team charged with initiating and implementing the multi-listing system.

The two executive members of SDPI in supporting roles are:

Amelia Beattie

Chief Investment OfficerSTANLIB Direct Property InvestmentsB.Com

Dimitri Kokinos

Portfolio Manager: Third Party MandatesB.Acc (Hons), CA (SA)

THE FUND1. SCOPE

Stage of development Greenfield, brownfield, land acquisition, early development phase

Geographic focus Sub Sahara Africa (excluding CMA), with a key focus on East and West Africa

Property segment Retail (60% - 80%) and other commercial assets (20% - 40%)

Project involvement Land acquisition, concept design/management, project management (construction)

2. ROLE OF NATURE OF INVESTMENTS

Size range of investment $15 - $30 million

Where in capital structure Land owner (10 - 25%) / Fund equity (25-40%) / quasi equity (10-15%) / Senior debt (50 - 65%)

Targeted return profile 22 - 25% IRR (nominal gross)

Preferred return and carry 10% IRR (Investors and Fund Mgr share returns above the Preferred Return on 80/20 cash out basis)

Level of control Varied, but select reserved matters for Fund at shareholder level

Maximum deal size No more than 33% of the total Fund capital ($50 million)

Partnerships Local institutions (land access), SA retailers, private equity funds (e.g. Actis)

3. FUND SCALE AND STRUCTURE

Size range of investment $150 million (4 - 6 projects)

Duration 4 year investment period, 4 year harvesting period (with a two year extension option)

Domicile Mauritius

Co-investment allowed Allowed for select investors

Minimum ticket size $5 million

Fees charged 1.5% (25% discount to usual rate)

CONTACT DETAILSShould you have any questions about the detail provided in this document of if you would like to meet with the Fund Manager to discuss his management style in greater depth, please contact us using the following details:

Roberto Nunes FerreiraFund Manager

+27 11 448 6000roberto.ferreira@stanlib.com

Legal Notices

Information and ContentThe information and content (collectively ‘information’) provided herein are provided by STANLIB Asset Management (“STANLIBAM”) as general information for information purposes only. STANLIB does not guarantee the suitability or potential value of any information or particular investment source. Any information herein is not intended nor does it constitute financial, tax, legal, investment, or other advice. Before making any decision or taking any action regarding your finances, you should consult a qualified Financial Adviser. Nothing contained herein constitutes a solicitation, recommendation, endorsement or offer by STANLIBAM.

CopyrightThe information provided herein is the possession of STANLIBAM and are protected by copyright and intellectual property laws. The information may not be reproduced or distributed without the explicit consent of STANLIBAM.

DisclaimerSTANLIB has taken care to ensure that all information provided herein is true and accurate. STANLIB will therefore not be held responsible for any inaccuracies in the information herein. STANLIBAM shall not be responsible and disclaims all loss, liability or expense of any nature whatsoever which may be attributable (directly, indirectly or consequentially) to the use of the information provided.

STANLIB Asset Management LimitedRegistration No: 1969/002753/06. A Financial Services Provider licensed under the Financial Advisory and Intermediary Services Act, 37 of 2002. FSP license No: 719.

Document relevant as of 25 November 2013 12:22 PM

Compliance number: D8R476

15

17 Melrose Boulevard Melrose Arch 2196 PO Box 203 Melrose Arch 2076T 0860 123 003 (SA only) T +27 (0)11 448 6000 E contact@stanlib.com W stanlib.comGPS coordinates S 26.13433°, E 028.06800° W