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We’re not landlords. We’re people.

www.redefine.co.za

GROUP RESULTS AND STRATEGIC REVIEW

half year ended 28 February 2014 1

2

AGENDA

2

Andrew Konig

(FD)

INTERIM

RESULTS

David Rice

(COO)

PROPERTY

PORTFOLIO

STRATEGIC

OVERVIEW

Marc Wainer

(CEO)

CONCLUSION

& PROSPECTS

Marc Wainer

(CEO)

ANNEXURES


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STRATEGIC OVERVIEW Marc Wainer

3

FIRST HALF 2014: SALIENT FEATURES

Distribution ahead of market guidance

Sectoral and geographic diversification drove outcome

Corporate activity on the increase since conversion to REIT

R2 billion Annuity acquisition

Property acquisitions total R2 billion

New development pipeline of R2.8 billion covering 157 000 m2 in GLA

Fountainhead holding increased to 65,9%

International opportunities looking attractive relative to many local opportunities

R3.2 billion invested in Australia

Renewed focus on redevelopment as opposed to acquisitions – R700 million in progress

Redefine’s strategic and risk focus tweaked to meet changing environment

4

STRATEGIC PRIORITIES AND ACTION PLANS GROWTH AND CAPITAL APPRECIATION PROSPECTS

2014 Priorities STATUS

Dispose the government tenanted office portfolio On hold

Substantially complete the rationalisation of the property portfolio Ongoing

Continue to acquire good quality and dispose of non-core assets to recycle capital Continuous review

Ongoing restructure without diluting earnings Ongoing

Implementation of BEE strategy to improve BEE score Priority Project

Management Action

Focus on renewing government leases (62% of revenue now contractual), some properties may be sold

Maponya Mall transferred on 27 March 2014

Acquisitions totalling R1.1 billion in process of transfer

Establishment of BEE Trust to be approved by unitholders

5

STRATEGIC PRIORITIES AND ACTION PLANS FOCUSED PROPERTY MANAGEMENT


Take-on Fountainhead property management Done

Improve management information Continuous review

Focus on cost of services through leveraging economies of scale Continuous review

Introduce technology-based applications to improve communications with staff Ongoing

Introduce electronic communication platforms to serve shoppers/support tenants Ongoing

Management Action

Considerable progress made

Emphasis on maintaining margins despite continued above inflation escalation in utility costs

6

STRATEGIC PRIORITIES AND ACTION PLANS TRANSFORMATION INTO A PURE PROPERTY PLAY


Exit the remaining Hyprop holding Complete

Increase the holding in Fountainhead – investment currently at 65,9% Ongoing

Management Action

Engagement with Fountainhead and regulatory bodies underway to acquire assets

Acquisition of Annuity effective 1 March 2014, subject to regulatory approvals

7

STRATEGIC PRIORITIES AND ACTION PLANS PRUDENT MANAGEMENT OF DEBT


Improve the loan to value ratio Continuous review

Establish American Depository Receipts programme First SA REIT

Increase funding from debt capital markets Ongoing

Introduce a dividend re-investment programme Ongoing

Restructure expensive debt Continuous review

Capital conversion process underway Work in progress

Management Action

Vigilant approach adopted to upward interest rate cycle – fixed debt now minimum of 75%

Strong focus on broadening funding sources to face off possible downgrade of sovereign debt

8

STRATEGIC PRIORITIES AND ACTION PLANS REAL GROWTH IN INTERNATIONAL MARKETS


Set up SARB approved structure to invest in offshore property directly Done

Invest in listed offshore securities and direct property at attractive yields Continuous review

Gear up the Cromwell holding in Australia to fund offshore investments Complete

Management Action

Recent amendments by SARB to HoldCo provisions enable offshore expansion

Inward listing of RI PLC a success:

Share price fully fungible

High demand for units

Possible recycle opportunity

RIFM internalised as part of RI PLC conversion to UK REIT – 69.3 million RI PLC units received

50% investment in Northpoint (North Sydney) through Cromwell Partners Trust valued at A$279 million

Cromwell now directly held - potential to increase holding to 26% in time

9

STRATEGIC PRIORITIES AND ACTION PLANS EXPLOIT VALUE - ADD FOR EXISTING PROPERTIES


Redevelop existing properties to enhance ability to earn revenue Continuous review

Make significant progress on current development pipeline Ongoing

Pursue pre-let / tenant demand driven development opportunities Continuous review

Provide redevelopment services to Fountainhead Ongoing

Management Action

Current development pipeline totalling R3.5 billion

New developments of R2.8 billion in progress

Redevelopment projects for R700 million currently underway

10

Unique hands-on management approach

Good quality diversified portfolio

Development capability with substantial pipeline

Global diversification – Europe and Australia

Robust balance sheet

Capital recycle opportunities

Agility in the way we conduct our business

11

WHAT DIFFERENTIATES REDEFINE

International property assets

14.7% Local property assets

85.3%

International income

19.3%

Local income

80.7%

*Annualised

Average rental per employee R12.9 million*

Average rental per tenant R808 000*

Average value per property R92 million


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PROPERTY PORTFOLIO David Rice

12

Description Office Retail Industrial Total

Number of properties 98 88 66 252

GLA (m2) 1 048 597 1 024 243 1 130 298 3 203 138

Vacancy (m2) 77 645 45 752 33 106 156 557

Vacancy (%) 7 4 3 5

Total portfolio value (Rm)# 9 583 9 418 5 014 24 016

Value per m2 (excl bulk) 9 139 9 195 4 336 7 498

Average gross rental (R/m2/month) 98 113 43 89

Weighted average in force escalations (%)* 8,4 8,2 7,7 8,1

Weighted average lease period (years) 2.8 2.5 2.5 2.5

Average property value (Rm) 98 108 75 96

Top 10 properties as % of sector by value 39 48 50 45

PORTFOLIO OVERVIEW At 28 February 2014

13

Note: *Excludes Government leases

# Excludes Development Projects and Vacant Land

PORTFOLIO ACTIVITY To February 2014

14

Tenant renewal retention was 92%

Offices 96%

Retail 87%

Industrial 88%

Weighted average renewal growth of 6% and future escalations of 8.3% achieved

Total vacancy is 4.9%

Offices 7.4%

Retail 4.5%

Industrial 2.9%

Offices 1% 8.4%

Retail 7% 8.1%

Industrial 7% 8.4%

VACANCIES REMAIN STABLE

15

% of GLA Feb 2014 Aug 2013

Office 7.4 8.6

Retail 4.5 3.6

Industrial 2.9 3.7

4.9 5.3

50%

29%

21%

Sector

Office Retail Industrial

47%

2% 15%

10%

14%

12%

Location

Greater Johannesburg Sandton

Pretoria Other

Western Cape KwaZulu-Natal

LEASE EXPIRY PROFILE: GROSS MONTHLY RENTAL

16

0%

6%

11%

7% 5%

1%

5%

1%

3%

6%

6%

6%

5%

12%

1%

1%

4%

2%

2%

2%

7%

7%

0%

5%

10%

15%

20%

25%

Monthly 2014 2015 2016 2017 2018 Beyond 2018

Office Retail Industrial Government

10% 9%

21%

15%

13%

8%

24%

% of Rent

ACQUISITIONS AND DISPOSALS At 28 February 2014

17

Office

(Rm)

Retail

(Rm)

Industrial

(Rm)

Total

(Rm)

Yield

(%)

Portfolio value at 31 August 9 877 9 558 4 564 23 999 -

Capex and FVA 389 449 154 994 -

Acquisitions - - 527 527 7.6

Ellerines Cato Ridge, KwaZulu Natal 467 467 7.4

Halifax Road, KwaZulu Natal 60 60 9.0

Less Disposals (50) (7) (20) (79) 10.9

Rand Stadium Toyota, Gauteng (7) (7) 13.3

Fascor, KwaZulu Natal (20) (20) 9.3

Monitor House, Gauteng (29) (31) 10.9

CCMA House, Western Cape (21) (21) 11.6

Portfolio value at 28 February 2014 10 216 10 000 5 225 25 441 -

41%

40%

19%

31 August 2013

40%

39%

21%

28 February 2014

Office Retail IndustrialBy value

DEVELOPMENT HIGHLIGHTS

New development projects totalling R2 786 billion at an average yield of 8.2% are currently in progress in

addition to R671 million of redevelopment projects at an average yield of 6.9%

Major contractor order books not as filled as provisional statistics indicated last year

Although building costs are rising we continue to negotiate competitive contract terms

Notwithstanding this construction costs impacted by lack of skills across industry

As a result of this, close relationships are being developed with more competitive mid-range contractors and

we have maintained a core group of consultants utilised across the portfolio

18

DEVELOPMENT PROJECTS

To February 2014

19

Redevelopment Type Comment R’m

Initial

Yield (%) Start Date

Completion

Date

Essex Gardens (Phases 4-5) Office Additions and alterations to offices 23 8 Sept 2012 Sept 2015

Mall as Scottsville (Phase 2) Retail Additions and alterations to retail 37 9.9 Oct 2013 Nov 2014

Standard Bank Building Office Additions and alterations to offices 533 6.4 Feb 2013 June 2015

Ottery Hyper Retail Additions and alterations to retail 78 8.2 July 2013 July 2014

Sub Total 671 6.9

New Developments

90 Grayston Office 4 Star P grade offices 504 8.5 March 2012 Aug 2014

Matlosana Mall Retail Regional shopping centre 1 029 8.25 March 2013 October 2014

90 Rivonia Road Office Multi-tenanted offices 979 7.8 April 2013 October 2015

190 Barbara Road Industrial Warehouse distribution centre 94 8.5 April 2013 March 2014

Waltloo Industrial Warehouse distribution centre 180 8.75 Aug 2013 March 2015

Sub Total 2 786 8.2

Total 3 457 7.9

37%

47%

16%

Post 28 February 2014

ACQUISITIONS AND DISPOSALS POST FEBRUARY 2014

20

Office

(Rm)

Retail

(Rm)

Industrial

(Rm)

Total

(Rm)

Portfolio value at 28 February 10 216 10 000 5 225 25 441

Total Acquisitions after February 2014 5 263 10 143 1 066 16 472

Maponya Mall (51%) 700 700

Robor Land 93 93

Discovery House (50%) 207 207

Ericsson Woodmead 240 240

13 & 15 Bierman Avenue (42.5%) 32 32

Alexander Forbes (50%) 690 690

Annuity 882 847 278 2 007

Fountainhead 2 242 7 911 695 10 848

Developments (additional value)

90 Grayston 212 212

90 Rivonia 758 758

Matlosana Mall 685 685

Less Disposals after February 2014 (125) - (9) (134)

Sub Total 5 138 10 143 1 057 16 338

Total 15 352 20 143 6 282 41 777

40%

39%

21%

28 February 2014


TOP 10 PROPERTIES BY VALUE POST FEBRUARY 2014

Property Sector Region GLA m2

Value

(R’m)

Valuation

R/m²

Centurion Mall Retail Centurion, Gauteng 112 564 3 367 29 912

East Rand Mall (50%)* Retail Boksburg, Gauteng 62 514 1 079 34 520

Matlosana Mall Retail Klerksdorp, Northwest 59 281 1 100 19 200

90 Rivonia Road Office Sandton, Gauteng 35 844 1 100 30 689

Golden Walk Retail Germiston, Gauteng 45 123 806 17 862

Maponya Mall (51%) Retail Soweto, Gauteng 71 487 700 19 672

Pepkor Isando Industrial Isando, Gauteng 107 017 631 5 896

Standard Bank Centre Office Cape Town CBD, Western Cape 54 142 583 10 768

Blue Route Mall Retail Tokai, Western Cape 55 501 653 11 766

155 West Street Office Sandton, Gauteng 24 501 555 22 652

Total 627 974 10 574 18 825

21

* Redefine 50% share

RETAIL IN REVIEW

Further deterioration in consumer health predicted

Trading down within categories and trading out of other categories expected to become more pronounced

over the coming months

January showed 7% growth in line with Stats SA ; likely attributable to delayed spending on the post-

Christmas sales

Average annual density across centres in excess of 20,000m2 : R27,700

22

-2%

5%

9% 6%

25%

21%

8%

13%

1%

7% 8% 6%

-5%

0%

5%

10%

15%

20%

25%

30%

-

500

1 000

1 500

2 000

2 500

3 000

3 500

Cle

ary

Park

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Average Density (6m Ended Feb) Growth Rate (%)

RETAIL CONSIDERATIONS REVISITED

Nationals continue to take up space

Interest from international retailers remains healthy

Consumer pressures continue to grow

Cost of occupancy is increasing however healthy margins and returns are being maintained by retailers

Seeing evidence of Pick ‘n Pay “giving back” storage space – Landlord’s ability to capitalise on this is still

being tested

Retailer’s that are expanding very quickly are experiencing some growing pains – issues such as

Franchisees not having access to capital or self-cannibalisation creeping in

Banks are not the only “retailers” who appear to be reviewing their footprints

Content driven categories (Cinemas, Books and Music) continue to reduce their footprint

Clear that furniture stores can no longer occupy prime retail locations

23

SO WHAT ARE WE THINKING NOW?

Choice is going to drive where the customer shops – this means two things:

We need to be drivers of bringing choice/differentiators to our centres

Centres with no clear distinction in an over traded retail node could come under pressure in the

medium term

Working on building our relationship with well chosen global brands and facilitating an easier entrance to SA

Even the best performing retailers have a tail of stores that they would like to close / consolidate

- we’d rather be the consolidator

Traditional retail credit models being tested:

Challenge of stimulating credit sales growth to underpin margins

In Q4 CY13 Edcon saw cash sales grow 14% and credit sales decline 7%

For the same period, Mr Price reported cash sales growth of 17% and credit sales growth of 6%

Edcon has announced the use of a second credit provider (African Bank)

Imperative that we understand the opportunity not only for each store and each centre, but the greater

opportunities across the portfolio

To develop a retail specific app

24

OFFICES IN REVIEW

The market fundamentals have not changed

National vacancies have remained range bound at an average of 11% since 2011 and this trend is likely to

continue for at least the forthcoming year

Leasing of vacant space is real challenge

Even prime grade office vacancies in Sandton have increased to 54 00m2 placing further pressure

on rent levels

“Densification” and “hot-desking” exacerbating slow take-up of office space nationally. Previous average of

20m2 per person allocated to office workers has dropped to approximately 10m2 and in some businesses

even less. This will increase the parking requirement and the need for even higher rentals

Lease incentives are offered to tenants and brokers of up to 15% of the total lease rent

25

SO WHAT ARE WE DOING NOW?

26

Redefine has opened a Sandton office dedicated to the management, leasing and tenant relationships of its

Sandton portfolio

Employed an additional broker and canvasser for in-house office leasing team

Continue to cement relationships with broker community

Clear focus on keeping vacancies at a minimum

Negotiations are advanced to let 90 Grayston Drive

On a positive note leases over 130 000m2, with a monthly rent exceeding R10 million, have been concluded

with Government and further negotiations are in progress to renew a further 97 000m2

INDUSTRIAL IN REVIEW

Again no change to market fundamentals

Nationally industrial vacancies remain at low levels yet there is no generally expected growth in rentals

We are asked the question - is the industrial market robust?

There is an oversupply of new developments in popular nodes in Gauteng placing further pressure on

rentals. eg. 4 new developments in the vicinity of OR Tambo have vacancies totalling 45 000m2

The Cape Town market remains fairly buoyant in the popular nodes but with little rental growth

KZN industrial market continues to remain firm particularly in areas close to the Harbour, Pinetown and

Cornubia Industrial

Where eave heights are increasing to ≥ 13 meters with significantly increased yard space it is expected that

rent for this type of facility will in future be calculated by volume and not area

27

SO WHAT ARE WE DOING NOW?

Continue relationship building with broker community

Additional broker employed for in-house leasing team

Redefine’s 90 Barbara road is now complete with various lease negotiations in progress. There is a specific

focus on letting this property

Continue to examine opportunities to redevelop existing properties

Planning the development of Cornubia

28


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INTERIM RESULTS Andrew Konig

29

HALF YEAR 2014 FINANCIAL HIGHLIGHTS

Financial results ahead of market guidance

Distribution growth of 8% to 36.4 cents

Distributable income exceeds R1 billion

In Rand terms recurring distributable income has grown by 15.9%

Accelerated book build raised R1.3 billion at attractive forward yield

Active portfolio’s margin up 1.2% to 80.7%

Group assets now R51.3 billion (first time above R50 billion)

Total tangible asset growth of R2.5 billion to R46 billion

International property assets up R1.9 billion to R6.6 billion

Net Asset Value up 51.1 cents to 921.8 cents per linked unit

Election to re-invest distribution in return for Redefine shares introduced

Average cost of Redefine’s debt reduced by 20 basis points to 7.8%

Interest on 81.2% of debt is fixed

30

DISTRIBUTABLE INCOME

Half year ended 28 February 2014

Distributable

Income

R’million

Per Linked

Unit

cents

Y-O-Y Change

%

2013 Actual 987 33.7

Less 2013 non-recurring (26) (0.9)

Less dilution arising from new units (1.4)

2013 actual recurring 961 31.4

Organic growth 2014 155 5.0

2014 actual recurring 1 116 36.4 15.9%

Add 2014 non-recurring - -

2014 Actual 1 116 36.4 8.0%

31

FIRST HALF 2014 TRADING RESULTS IN SUMMARY

32

987

1 116 +70

+62

+69

+25

+61

+19

-21 -1 -14 -1 -5

-135

950

1 000

1 050

1 100

1 150

1 200

1 250

1 300

1 350

Tailwinds

+R306 million

Headwinds

- R177 million

As at 28 February 2014 As at 31 August 2013

RDF FPT Global Group RDF FPT Global Group

R'million R'million R'million R'million R'million R'million R'million R'million

Properties 25 404 10 848 675 36 927 21 708 11 105 32 813

Cromwell 2 048 2 048 2 050 2 050

Redefine International 3 318 3 318 1 654 1 654

Other listed securities

Loans receivable 733 527 1 260 898 53 951

Held for trade 21 21 24 24

Held for sale 16 945 961 4 180 908 5 088

Total property assets 26 174 11 793 6 568 44 535 26 810 11 105 4 665 42 580

Intangible assets 5 232 5 232 5 264 5 264

Other assets 926 569 57 1 552 544 494 1 038

Total assets 32 332 12 362 6 625 51 319 32 618 11 599 4 665 48 882

Equity 15 749 6 070 5 854 27 673 16 251 4 287 4 381 24 919

Non-controlling interests 2 966 2 966 4 241 4 241

Interest bearing debt 13 991 3 133 768 17 892 12 134 2 881 15 015

Debt held for sale 0 1 756 291 2 047

Total funding 29 740 12 169 6 622 48 531 30 141 11 409 4 672 46 222

Versus 31 August 2013 Versus 28 February 2013

Growth in property assets -636 +688 +1 903 +1 955 -1 542 +11 635 +4 449 +14 542

Changes in capital allocation -401 +760 +1 950 +2 309 +1 447 +12 011 +3 941 +17 399

SIMPLIFIED STATEMENT OF FINANCIAL POSITION At February 2014

33

GROWTH IN NET ASSET VALUE Half year ended 28 February 2014

34

870.7

921.8

-38.5 +48.7

+41.3

-0.4

800

820

840

860

880

900

920

940

31 August 2013NAV

Dilution arisingfrom additionalunits in issue

Revaluation ofassets

Capital raised Other netmovements

28 February 2014NAV

Net asset value has increased by 51.1 cents and unit price premium to NAV over 8%

31 August 2013

NAV

28 February 2014

NAV

22.5

6.9

4.0

2.6 0.4

Distribution Contributors (Cents)

Redefine FPT RI PLC Cromwell Northpoint, Bondi

532.5 185.2

121.4

68.5 14.2

Net Asset Value Composition (Cents)

35

CAPITAL ALLOCATIONS AND RETURNS Half year ended 28 February 2014

Return on Equity

Yield

Redefine 8.3%

Fountainhead 8.4%

Global 8.1%

Cromwell 7.8%

Npt, Bondi 10.8%

RI PLC 8.1%

TOTAL 8.3%

Note: Return on Equity based on annualised H1 2014 and average NAV

61.8%

11.0%

1.0% 7.2%

20.1%

1.5% 7.4%

13.2%

19.0%

57.8%

36.4 cents 921.8 cents

2014

(R’m)

2013

(R’m)

Change

%

Net operating income from investment properties - Redefine 1 162 1 030 12.8

Fountainhead distributable income 212 3 100.0

Listed securities portfolio 18 158 -88.6

Fee income 38 59 -35.6

Property trading income 1 2 -50

Total revenue 1 431 1 252 14.3

Administration costs (72) (58) 24.1

Net operating profit 1 359 1 194 13.8

Net finance charges (457) (322) 41.9

Taxation (1) - 100.0

Local distributable income 901 872 3.3

International distributable income 215 115 87.0

Distributable income 1 116 987 13.1

SIMPLIFIED DISTRIBUTABLE INCOME STATEMENT Half year ended 28 February 2014

36

Note: The distributable income analysis included in the published Results Announcement splits the group figures

into Redefine, Fountainhead and International which do not tie back due to IFRS and consolidation adjustments

2014

(R’m)

2013

(R’m)

Change

%

Active property portfolio revenue 1 269 1 200 5.8

Active property portfolio costs (245) (246) -0.4

Property income from active property portfolio 1 024 954 7.3

Net operating income from acquired / development properties 104 42 147.6

Net operating income from disposed properties 34 34 -0.0

Net operating income from investment properties 1 162 1 030 12.8

Active portfolio margin % 80.7% 79.5%

ACTIVE PORTFOLIO INCOME ANALYSIS Half year ended 28 February 2014

37

Offices

(R’m)

Retail

(R’m)

Industrial

(R’m)

Other

(R’m)

Total

(R’m) Contribution

to Growth

H1 2013 property revenue 520 460 214 6 1 200

Add H1 2014 letting activity 34 29 8 - 71

Contractual lease escalations 33 28 15 76 6.3%

New lets 4 7 4 15 1.3%

Renewals 1 2 1 4 0.3%

Vacancies (4) (8) (12) (24) -1.9%

Movement in other (2) (2) -0.2%

H1 2014 property revenue 554 489 222 4 1 269

Growth on prior period 6.5% 6.3% 3.7% -33.3% 5.8%

38

ACTIVE PORTFOLIO REVENUE PERFORMANCE Half year ended 28 February 2014

Letting activity drives the period’s active property growth of 5.8% as follows:

2014

(R’m)

Change

%

2013 Property costs 246

Net municipal charges driven by rates and taxes 15 53.5

Net electricity recoveries through internalisation (34) -161.5

Operating costs flat through cost containment 0 0

Property Management higher due to electricity recovery infrastructure 8 15.4

Repairs & maintenance across the portfolio 5 21.7

TI costs are deal driven (1) -5.6

Letting commission is a function of the market (2) -18.2

Management fees up through outsourcing facilities management 3 37.5

Bad debts up due to turn in interest cycle 5 166.7

2014 Property costs 245 -0.4

ACTIVE PORTFOLIO EXPENDITURE ANALYSIS Half year ended 28 February 2014

39

2014 %

2013%

2012 %

2011 %

2010 %

Operating costs as a % of active property income 17.3 18.1 21.5 21.9 20.0

Property management costs as a % of collections 3.3 3.4 3.7 3.4 3.6

Municipal recoveries as a % municipal charges 74.4 78.0 65.1 67.3 67.8

Electricity recoveries as a % electricity charges 110.2 76.3 53.9 51.4 43.8

2014

%

2013

%

2012

%

2011

%

2010

%

Property revenue 100.0 100.0 100.0 100.0 100.0

Less property costs 19.3 20.5 24.3 24.9 26.8

Municipal charges net of recoveries 3.4 2.3 3.7 3.4 3.1

Electricity charges net of recoveries -1.6 1.1 1.6 1.6 1.4

Operating Costs 7.1 7.5 7.8 7.6 7.8

Property Management 4.8 4.3 4.5 4.2 4.5

Repairs & Maintenance 2.2 1.9 2.3 2.0 2.7

Tenant Installation 1.3 1.5 1.9 1.8 1.2

Letting commission 0.7 0.9 1.0 1.3 1.2

Management fees 0.9 0.7 0.7 2.5 4.5

Bad debts 0.5 0.3 0.8 0.5 0.4

Property margin 80.7 79.5 75.7 75.1 73.2

40

ACTIVE PORTFOLIO TRADING EFFICIENCY Half year ended 28 February 2014

Every R100 of property revenue converts into property income as follows:

Funding snapshot

Redefine

(R’m)

Fountainhead

(R’m)

International

(R’m)

Group

(R’m)

Bank borrowings 11 362 3 133 768 15 263

Debt capital market 2 629 - - 2 629

Total borrowings 13 991 3 133 768 17 892

Key debt statistics

Loan to value (Management target 35%) – including held for sale 37.6%

Debt capital market funding (Management target 30% of debt) 18.8%

Average term of debt 2.7 years

% of debt secured 70.0%

% of assets secured 66.0%

Equity headroom on total assets 24 300

Weighted average cost of borrowings 7.8%

% of debt fixed (Management target 75%) 81.2%

Average term of SWAP’s 3.9 years

Undrawn debt facilities – available on demand 2 366

FUNDING PROFILE At 28 February 2014

41

Moody’s credit rating was refreshed on

5 August 2013 and remains unchanged

Source: Reuters, RMB Global Markets

0

2500000

5000000

2014 2015 2016 2017 2018 2019 2020

Ra

nd

s

Year

Maturity Profile Of Debt And Hedges

Maturity of debt

Maturity of hedges

COST OF CAPITAL Half year ended 28 February 2014

42

Redefine’s cost of capital is beholden to bond yields

Cost of Debt – Average for 2014 half year

JIBAR 5.3%

Bank Margin 1.6%

Cost of Fixing 0.9%

Cost of Debt 7.8%

Yield on equity raised 7.7%

Weighted average cost of funding 7.7%

85

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105

115

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135

145

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5 Yr Swap Rate

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Redefine

Top 10 beneficial unitholders at end March 2014 Number of units %

Government Employees Pension Fund 189 040 788 6.2

Stanlib 182 798 749 6.0

Investment Solutions 142 105 654 4.6

Investec 139 066 188 4.5

Clearwater Property Holdings 98 984 125 3.2

Old Mutual Group 89 680 749 2.9

Eskom Pension & Provident Fund 87 483 687 2.8

Sanlam Group 81 577 781 2.7

Allan Gray 78 740 994 2.6

Coronation Fund Managers 73 349 745 2.4

Total 1 162 828 460 37.9

UNITHOLDER PROFILE

43

COUNTRY CLASSIFICATION Beneficial unitholders at end March 2014

44

South Africa

84.0%

Balance

5.9%

Singapore

1.6%

Switzerland

1.6%

United States

6.9%

International Ownership

2008 2009 2010 2011 2012 2013 2014

1.4% 6.0% 10.1% 12.2% 14.9% 15.9% 16.0%

REDEFINE AND ASSET CLASS RETURNS To end April 2014

45

80

85

90

95

100

105

110

115

120

1250

1 F

ebru

ary

201

3

01 A

pri

l 2

01

3

01 J

une

20

13

01 A

ug

ust 2

01

3

01 O

cto

be

r 20

13

01 D

ece

mbe

r 201

3

01 F

ebru

ary

201

4

01 A

pri

l 2

01

4

RDF

Property Sector

All Share

ALBI

Cash

Daily trade in Redefine is up 36.8%

For the six months to February 2014 Redefine’s average daily volume was

5.2 million (2013: 3.8 million). The average daily volume for 2014 is 6 million.

THE VALUE CREATED BY REDEFINE Half year ended 28 February 2014

46

Municipalities

1,8%

Minorities

2,8%

Employees

4,5%

Providers of debt (interest)

39,5%

Unitholders

51,0%

The cash value created

R’million

Revenue 2 164

Interest received 61

Equity accounted result

of associates 140

Profit from discontinued

operations 18

Property and other

operating expenses -372

Cash value created 2 011

The cash value distributed

Taxation

0.4%


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CONCLUSION & PROSPECTS Marc Wainer

47

CONCLUSION

Key take-outs:

Trading environment anticipated to get tougher

Local portfolio restructure was well timed

– now largely defensive

Proactive property management approach adopted

to remain cost effective

International strategy to be taken to the next level

Containing the rise in debt costs a priority

Caution is demanded by conditions

Opportunities will not be ignored

An agile approach underpins everything

Prospects:

Redefine is well positioned to weather and emerge for the better from the perfect storm

2014 second half is anticipated to be in line with the first half's growth

These prospects have not been reviewed or reported on by the group’s independent auditors 48

Corporate actions underway

R’billion

Property acquisitions 2.0

Development projects 3.5

Fountainhead 3.0

Annuity 2.1

TOTAL 10.6


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QUESTIONS?

49


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ANNEXURES

50

CONTENT

51

Annexure 1: Strategic Initiatives: Goals

Annexure 2: Portfolio Geographical Split

Annexure 3: Portfolio Sectoral Split

Annexure 2: Portfolio Split by Value

Annexure 3: Portfolio Split by GLA

Annexure 4: Portfolio Split by Gross Monthly Rental/m2

Annexure 5: Tenant Grade by Gross Monthly Rental

Annexure 6: Lease Expiry Profile by GLA

Annexure 7: Top 10 Properties by Value

Annexure 8: Top 10 Tenants

Annexure 9: IFRS Distributable Income Reconciliation

Annexure 10: Active Portfolio Expenses for the half year ended 28 February 2014

Annexure 11: Abridged Statement of Financial Position as at 28 February 2014

Annexure 12: Summarised Cashflow for the half year ended 28 February 2014

ANNEXURE 1: STRATEGIC INITIATIVES: GOALS

Growth and Capital Appreciation Prospects

Continuous improvement in the quality of the core property portfolio

Improve our property sector BBEE rating

Strengthen cashflows from property assets

Lower the age profile of the property portfolio to reduce maintenance

Focused Property Management

Further enhance service to tenants

Improve operating efficiencies and information flows

Invest in staff

Expand technology infrastructure to enhance communication

Extend the lease expiry profile

Continue to enhance the quality of the tenant profile

Improve tenant retention rate

Transformation into a pure property play

Transformation of local investments from a hybrid into a pure property play

But invest in local listed securities if potential for control

52

ANNEXURE 1: STRATEGIC INITIATIVES: GOALS

Prudent Management of Debt

Secure the lowest cost of fixed and variable finance costs

Optimise funding maturity profiles

Broaden funding sources

Maintain conservative loan to value ratios

Real Growth in International Markets

Continue to diversify risk geographically

Take advantage of investing in higher-yielding environments

Exploit income and capital growth opportunities at low risk

Exploit value add to existing properties

Redevelop existing properties to enhance their ability to grow revenue

Cater for tenant demands

Maximise opportunities from existing well located properties

Uplift value

Develop or partner with developers to create new investment opportunities

53

ANNEXURE 2: PORTFOLIO SECTORAL SPLIT

54

33%

32%

35%

GLA


42%

39%

19%

Gross Monthly Rent

40%

39%

21%

Value

45%

6% 13%

8%

18%

10%

Gross Monthly Rent

Greater Johannesburg Sandton Pretoria Other Cape KwaZulu-Natal

ANNEXURE 3: PORTFOLIO GEOGRAPHICAL SPLIT

46%

7% 11%

7%

19%

10%

Value

55

48%

3% 12%

8%

18%

11%

GLA

ANNEXURE 4: PORTFOLIO SPLIT BY VALUE

56

13%

21%

24%

42%

Office

Premium Grade

A Grade

Government

Secondary

10%

31%

22%

20%

4%

2%

11%

Retail

Neighbourhood Centre

Community Centre

Small Regional

Regional Centre

High Street

Speciality Centre

Other

31%

7%

18%

44%

Industrial

High Grade/High Tech

Industrial Units

Light Manufacturing

Warehousing

ANNEXURE 5: PORTFOLIO SPLIT BY GLA

57

6%

14%

34%

46%

Office

Premium Grade

A Grade

Government

Secondary

11%

40% 18%

11%

4%

2%

14%

Retail


Community Centre

Small Regional

Regional Centre

High Street

Speciality Centre

Other

25%

7%

28%

48%

Industrial

High Grade / High Tech

Industrial Units

Light Manufacturing

Warehousing

ANNEXURE 6: PORTFOLIO SPLIT BY GROSS MONTHLY

RENTAL/M2

58

24%

31% 21%

24%

Office

Premium Grade

A Grade

Government

Secondary

10%

10%

12%

21%

28%

10%

9%

Retail


Community Centre

Small Regional

Regional Centre

High Street

Speciality Centre

Other

28%

22% 21%

29%

Industrial

High Grade / High Tech

Industrial Units

Light Manufacturing

Warehousing

ANNEXURE 7: TENANT GRADE BY GROSS MONTHLY

RENTAL

59

59% 38%

3%

Industrial

58% 15%

27%

Retail

75%

15%

10%

Office

A Grade Nationals, Large Public Companies and Government

B Grade Large Private Companies, Professional Partnerships and other Public Companies

C Grade Close Corporations and smaller Private Companies

ANNEXURE 8: LEASE EXPIRY PROFILE BY GLA

60

1% 3%

7%

4% 4% 2%

3% 2% 1%

1%

5%

5% 4%

4%

9%

1% 0%

2%

8%

4%

4%

3%

12%

1% 6%

0%

5%

10%

15%

20%

25%

30%

Monthly 2014 2015 2016 2017 2018 Beyond 2018 Vacancy

Office Retail Industrial Government

9%

6%

20%

14%

9%

25%

12%

5%

% of GLA

ANNEXURE 9: TOP 10 PROPERTIES BY VALUE AT 28 FEBRUARY 2014

61

Redefine 50% share

Sector Location

GLA

m²

Value

(R'm)

1 East Rand Mall Retail Boksburg, Gauteng 62 514 1 079

2 Golden Walk Retail Germiston, Gauteng 45 123 806

3 Pepkor Isando Industrial Isando, Gauteng 107 017 631

4 Standard Bank Centre Office Cape Town CBD, Western Cape 54 142 583

5 155 West Street Office Sandton, Gauteng 24 501 555

6 Sammy Marks Square Retail Pretoria CBD, Gauteng 34 124 553

7 Ellerines Cato Ridge Industrial Riet Vallei, KwaZulu Natal 50 333 446

8 Park Meadows Retail Kensington, Gauteng 27 376 440

9 Cleary Park Shopping Centre Retail Port Elizabeth, Eastern Cape 36 290 437

10 Convention Tower Office Cape Town CBD, Western Cape 17 854 376

Sub total 459 274 5 906

Portfolio Total 3 203 138 24 016

As a percentage 14 25

ANNEXURE 10: TOP 10 TENANTS AT 28 FEBRUARY 2014

62

GMR (Rm) GLA (m²)

1 Government 36 200 405 393

2 Edcon 8 855 112 279

3 Pepkor 7 641 133 799

4 Shoprite 7 000 103 660

5 Discovery Health 5 573 31 767

6 Standard Bank 5 026 42 765

7 ABSA 4 469 32 220

8 Pick 'n Pay 4 423 72 724

9 Ellerines 4 202 66 709

10 Zenprop (Head lease - Thibault Square) 3 778 30 434

Subtotal 87 168 1 031 750

Total 233 005 3 203 138

As a percentage 37% 32%

ANNEXURE 11: IFRS DISTRIBUTABLE INCOME RECONCILIATION Half year ended 28 February 2014

63

Statutory

IFRS

(R'm)

Income

Adjustments

(R'm)

Distributable

Income

(R'm) Notes

Revenue

Property portfolio 2 116 (61) 2 055

Contractual rental income 2 055 2 055

Straight-line rental accrual 61 (61) Non cash entry

Listed securities income 100 (10) 90 Alignment of earnings to actual distribution

Fee income 8 8

Trading income 1 1

Total revenue 2 225 (71) 2 154

Operating costs (403) (403)

Administration costs (94) (94) Refer to Fee income

Net operating income 1 728 (71) 1 657

Changes in fair values 1 704 (1 704) Preservation of capital

Amortisation of intangibles (31) 31 Non cash entry

Equity accounted profits (64) 199 135 Alignment of earnings to actual distribution

Income from operations 3 337 (1 545) 1 792

Net interest (707) 136 (571)

Interest paid (794) 136 (658) Debt restructure

Interest received 87 87

Foreign exchange loss 44 (39) 5 Unrealised gain

Income before debenture interest 2 674 (1 448) 1 226

Debenture interest (1 116) 1 116 Reversed for reconciliation purposes

Profit before taxation 1 558 (332) 1 226

Taxation (2) (15) (17) UK REIT and deferred atx

Profit for the period from continuing operations

1 556 (347) 1 209

Profit from discontinued operations 369 (347) 22 Consolidation entry reversed

Profit for the period 1 925 (694) 1 231

Redefine shareholders 1 601 (485) 1 116 Distributable income

Non-controlling interests 324 (209) 115 Net adjustments attributed to NCI

ANNEXURE 12: ACTIVE PORTFOLIO EXPENSES Half year ended 28 February 2014

64

2014

(R’m)

2013

(R’m)

Change

%

Net municipal charges 43 28 53.5

Net electricity recoveries (21) 13 -161.5

Operating costs 90 90 0

Property Management 60 52 15.4

Repairs & maintenance 28 23 21.7

TI costs 17 18 -5.6

Letting commission 9 11 -18.2

Management fees 11 8 37.5

Bad debts 8 3 166.7

Property costs 245 246 -0.4

ANNEXURE 13: ABRIDGED STATEMENT OF FINANCIAL POSITION

At 28 February 2014

65

ASSETS

2014

Group

(R’m)

2014

Redefine

(R’m)

2013

Redefine

(R’m)

2013

Group

(R’m)

Investment properties 36 252 25 404 21 707 32 812

Listed securities 2 048 2 2 052 2 050

Goodwill and intangible assets 5 232 4 339 4 371 5 264

Interest in associates 3 993 4 005 1 526 1 654

Interest in subsidiaries - 7 177 5 361 -

Other non-current assets 1 757 2 147 1 103 1 129

Current assets 1 076 734 608 885

Non-current assets held for sale 961 16 4 180 5 092

Total Assets 51 319 43 824 40 908 48 886

EQUITY AND LIABILITIES

Shareholders’ interest 27 673 27 372 24 703 24 948

Non-controlling interests 2 966 - 6 4 241

Interest bearing borrowings 14 853 11 970 10 742 12 873

Deferred taxation 581 578 575 568

Other non-current liabilities 46 46 79 79

Interest bearing borrowings – current 3 039 2 021 1 392 2 142

Trade and other payables 1 045 721 630 959

Distribution payable 1 116 1 116 1 025 1 025

Non-current liabilities held for sale - - 1 756 2 051

Total equity and liabilities 51 319 43 824 40 908 48 886

Redefine

(R’m)

Fountainhead

(R’m)

International

(R’m)

2014

(R’m)

2013

(R’m)

Opening cash 40 319 - 359 351

Arising from Redefine

International - - - - (293)

Arising from Fountainhead - - - - 342

Adjusted opening cash 40 319 - 359 400

Generated by operations 1 405 240 178 1 823 2 840

Net interest paid (617) (101) (15) (733) (779)

Linked unit distributions paid (1025) (56) - (1 081) (2 188)

Surplus cash (197) 402 163 368 273

Investments (1 207) (231) (827) (2 265) (5 420)

Funding raised 1 427 252 768 2 447 5 500

Translation effects 27 - (47) (20) 6

Closing cash 50 423 57 530 359

ANNEXURE 14: SUMMARISED CASH FLOW Half year ended 28 February 2014

66

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