Retail update November 2019

GROWTHPOINT RETAIL

UPDATEPresented by Neil Schloss

Head of Asset Management

Retail

28/29 November 2019

INDEX

1. RETAIL OVERVIEW AND THEMES/ TRENDS

2. GROWTHPOINT TRADING DENSITY GROWTH VS BENCHMARK

3. TRADING PERFORMANCE

4. RETAIL PORTOLIO KPI’S

5. ARREARS

6. OPERATING COSTS

7. IMPACT OF COMPETITION

8. PROJECTS / DEVELOPMENTS

9. DISPOSALS

10. EDCON EXPOSURE

RETAIL OVERVIEW

RETAIL OVERVIEW

GLA

No. Retail Properties

Vacancy

1,381,997m²

49

3.9%

Value R29.8bn

Top 10 Properties by Value Fair Value

Rm

GLA

m²

Top 10 Tenants by gross rental GLA

m²

Brooklyn Mall and Design Square (75%), Brooklyn, Pretoria 2 125 56 334 The Foschini Group Ltd 58 922

Festival Mall, Kempton Park, Johannesburg 1 754 82 754 Edcon Holdings Ltd 104 377

N1 City Mall (100%), Goodwood, Cape Town 1 741 63 397 Pepkor Holdings Ltd 72 001

Waterfall Mall, Rustenburg 1 628 49 883 Shoprite Holdings Ltd 135 297

Greenacres, Greenacres, Port Elizabeth 1 485 49 530 Pick n Pay Stores Ltd 112 897

Vaal Mall (66.6%), Vanderbijlpark, Johannesburg 1 386 44 029 Mr Price Group Ltd 56 647

Lakeside Mall, Benoni 1 346 65 355 Truworths International Ltd 32 070

La Lucia Mall, La Lucia, Durban 1 304 37 287 Woolworths Holdings Ltd 87 253

Kolonnade (50%), Montana Park, Pretoria 1 173 38 284 Massmart Holdings Ltd 65 715

The Constantia Village, Constantia, Cape Town 1 135 20 421 Clicks Group Ltd 27 344

Sub Total 15 077 507 274 Sub Total 752 523

Balance of the sector 14 768 874 723 Balance of the sector 576 242

Total for the sector 29 845 1 381 997 Total for the sector (excluding vacancies) 1 328 765

TOP 10 PROPERTIES TOP 10 TENANTS

8. Decision making slow

7. Runaway administrative costs

11. Sustainable initiatives

1. Weak Consumer

2. Low like for like

turnover growth

3. Historic lease

escalations outpacing

turnover growth

4. Aggressive lease/

renewal negotiations

5. Cost containment

• Reversions

• Downsizing

• Consolidation of stores

6. Op Costs growing

faster than rental income

9. Changing tenant mixes /alternative

uses

THEMES / TRENDS

10. Online

12. Technology

13. Exclusivities

GROWTHPOINT

TRADING DENSITY

GROWTH VS BENCHMARK

Bellows College

GROWTHPOINT TRADING DENSITY GROWTH VS BENCHMARK

1.9%

3.0%

3.3%

6.8%

0.6%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0%

Growthpoint

Redefine

Liberty two°Degrees

Attacq

Hyprop June 2019

June 2019

May 2019

August 2019

September 2019

Trading

Performance

Bellows College

TRADING PERFORMANCE

12 MONTH ROLLING TRADING DENSITY BY CENTRE CLASSIFICATION – SEPTEMBER 2019

2,616

2,442 2,497

3,467

2,733

2,537

3,602

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Total Large Regional Small Regional Community

Growthpoint MSCI

Bellows College

TRADING PERFORMANCE

12 MONTH ROLLING TRADING DENSITY BY LSM – SEPTEMBER 2019

2,616

2,241

2,453

3,434

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Total Portfolio Lower Income Middle Income Upper Income

1.9%↑

2.1%↑

1.0%↑

1.9%↑

City Mall

Village Square

Festival Mall

Golden Acre

The Bridge

Fourways Crossing

Kolonnade

Vaal Mall

Woodmead

Key West

N1 City Mall

Northgate

Greenacres

Lakeside Mall

14th Avenue

Helderberg Hyper

Hillcrest Corner

Howard Centre

Bayside Mall

Paarl Mall

River Square

Waterfall Mall

Longbeach Mall

Alberton City

City View

East Rand Value

Constantia Village

Gardens Centre

Brooklyn Mall

La Lucia Mall

Walmer Park

Watercrest Mall

Bellows College

TRADING DENSITY GROWTH ROLLING 12 MONTHS TO SEPTEMBER 2019 –

LARGE REGIONAL

-0.1

-0.7

3.1

3.8

-2.4

3.2

0.7

1.4

-2.8

7.1

-1.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

BROOKLYN MALL FOURWAYSCROSSING

KOLONNADE VAAL MALL WOODMEAD FESTIVAL MALL KEY WEST N1 CITY MALL NORTHGATE GREENACRES LAKESIDE MALL

Perc

enta

ge %

Bellows College

TRADING DENSITY GROWTH ROLLING 12 MONTHS TO SEPTEMBER 2019 –

SMALL REGIONAL

2.6

0.6

4.0

-3.1

3.93.8

-0.9

-2.2

-0.7

2.0

-0.2

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

LA LUCIA MALL WALMER PARK WATERCRESTMALL

BAYSIDE MALL PAARL MALL RIVER SQUARE WATERFALL MALL LONGBEACH MALL ALBERTON CITY CITY VIEW GOLDEN ACRE

Perc

enta

ge %

Bellows College

TRADING DENSITY GROWTH ROLLING 12 MONTHS TO SEPTEMBER 2019 –

COMMUNITY CENTRES

2.9

1.2

0.0

5.5

3.1

2.5

-0.1

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

CONSTANTIA VILLAGE GARDENS CENTRE HILLCREST CORNER HOWARD CENTRE CITY MALL THE BRIDGE VILLAGE SQUARE

Perc

enta

ge %

Bellows College

RETAIL PORTFOLIO

KPI’S

RETAIL PORTFOLIO KPI REVIEW3.3

2.6

3.6

3.6

3.9

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

FY15 FY16 FY17 FY18 FY19

7.3

7

7.2

6

7.2

7.0

3

6.9

3

6. 7

6. 8

6. 9

7

7.1

7.2

7.3

7.4

7.5

FY15 FY16 FY17 FY18 FY19

3.5

4.4

4.3

4.1

4.8

F Y15 FY16 FY17 FY18 FY19

VACANCY

%

AVERAGE IN FORCE ESCALATION

%

WEIGHTED AVERAGE

LEASE PERIOD

Years

RETAIL PORTFOLIO KPI REVIEW87.0

89.3

80.9

81.8

82.7

76.0

78.0

80.0

82.0

84.0

86.0

88.0

90.0

FY15 FY16 FY17 FY18 FY19

7.7

3

7.3

6

7.2

7

7.0

9

6.5

4

F Y15 FY16 FY17 FY18 FY19

RENEWAL SUCCESS RATE WEIGHTED AVERAGE RENEWAL GROWTH WEIGHTED AVERAGE FUTURE ESCALATIONS

ON RENEWAL% %

%

5.6

8

5.8

7

3.1

8

-3.1

2

-5.3

1

-6

-4

-2

0

2

4

6

8

F Y 1 5 F Y 1 6 F Y 1 7 F Y 1 8 F Y 1 9

ARREARS

ARREARS

8.84% 8.98%

10.33% 10.20%

9.15%

10.91%

13.42%

15.72%

17.17%

6.90%

8.14%8.52%

9.06%

35,240 37,349

42,623 41,461

38,497

44,225

55,377

66,722

74,623

30,822

37,331

34,455

37,267

9,757 10,62611,987

10,440 10,4278,693 8,463 8,780 8,623 8,489

11,387 11,60010,043

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%Sep'1

8

Oct'18

Nov'1

8

Dec'1

8

Jan'1

9

Feb'1

9

Mar'19

Apr'19

May'1

9

Jun'1

9

Jul'1

9

Aug'1

9

Sept'19

Tota

l Arr

ears

and P

rovis

ion f

or

Arr

ears

(R'0

00)

Arr

ears

as

% o

f Tota

l Collecta

ble

s

Arrears as % of Total Collectables Total Arrears (R'000) Provision for Bad Debt (R'000)

Bellows College 20

OPERATING COSTS

Bellows College

TOTAL MUNICIPAL CHARGES CONTRIBUTED 62% OF TOTAL

OPERATING COSTS

Source: SAPOA, MSCI

Bellows College

MUNICIPAL CHARGES NOW A LARGER SLICE OF A LARGER PIE

Source: SAPOA, MSCI

Bellows College

RATES & TAXES THE FASTEST GROWING COST SINCE 2009

Source: SAPOA, MSCI

IMPACT OF

COMPETITION

IMPACT OF COMPETITION

1. Bayside Mall

▪ Competition – Table Bay Mall – Opened September 2017

▪ Full Competition in Primary Catchment Area

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

Apr-

17

May-1

7

Jun-1

7

Jul-

17

Aug-1

7

Sep-1

7

Oct-

17

Nov-1

7

Dec-1

7

Jan-1

8

Feb-1

8

Mar-

18

Apr-

18

May-1

8

Jun-1

8

Jul-

18

Aug-1

8

Sep-1

8

Oct-

18

Nov-1

8

Dec-1

8

Jan-1

9

Feb-1

9

Mar-

19

Apr-

19

May-1

9

Jun-1

9

Jul-

19

Aug-1

9

Sep-1

9

Month-on-Month Trading Density Growth Month-on-Month Growth in Footcount

Opened Sep 2017

PROJECTS /

DEVELOPMENTS

PROJECTS / DEVELOPMENTS

Development/ Redevelopment Tenancy Estimated

Completion Date

Capex Approval

(Rmil)

CO

MPLETED

PAST

4 Y

EARS

Vaal Mall Extension 12/2016 294.00

Greenacres Extension 07/2017 290.00

Fourways Crossing Refurbishment and Extension 06/2017 57.50

Northgate (50%)

Downsizing of the 22 000m2 Pick n Pay

Hypermarket to accommodate a new flagship

Pick n Pay

10/2017 43.5

Kolonnade (50%)Development of outdoor piazza accommodating

casual dining12/2017 16.00

APPRO

VED

River Square Refurbishment and relocation of Tenants 12/2018 65.00

Festival Mall Refurbishment 04/2019 58.15

Lakeside Mall Refurbishment 04/2019 55.00

Walmer Park Redevelopment 06/2019 148.64

La Lucia Refurbishment 11/2019 65.5

Longbeach Mall Refurbishment 10/2019 34.00

Middestad Mall Redevelopment of upper level 03/2020 23.7

Lakeside Mall Cinema Redevelopment 06/2020 74.00

Waterfall Mall Dischem Development 04/2020 72.00

PLAN

NED

Paarl Mall Extension

Longbeach Mall Extension

DISPOSALS

DISPOSALS

DISPOSALS – PAST 4 YEARS

No BUILDING AREA DATE OF DISPOSAL GLA m²SELLING PRICE

Rm

1 Picbel Parkade KZN 02/03/2017 13,818 271.3

2 Vaal Mall – 11.19% Vanderbijl Park 11/04/2017 7,387 209.3

3 Grayston Shopping Centre Sandton, JHB 22/05/2017 4,346 138.0

4 OK Bazaars Empangeni Empangeni, KZN 18/07/2017 13,660 172.5

5 Jet Bloemfontein Bloemfontein 26/09/2017 5,516 38.3

6 Hatfield Plaza Hatfield, PTA 19/03/2018 19,332 285.3

7 Hatfield Mall Hatfield, PTA 19/03/2018 6,332 61.4

8 Campus Building Hatfield, PTA 19/03/2018 3,179 39.0

9 Standard Plaza Hatfield, PTA 19/03/2018 2,733 32.0

10 Norkem Mall Kempton Park, JHB 20/12/2018 9,591 109.5

11 Longbeach vacant land Noordhoek, WC 04/10/2018 8.5

12 Sunward Park Shopping Centre Boksburg, JHB 19/07/2019 15,015 147.0

13 Stanger KZN 08/10/2019 3,045 16.8

EDCON EXPOSURE

EDCON EXPOSURE – BY BRAND

BRAND

EXPOSURE AS AT

30 JUNE 2019

GLA (m²)

Accessorize 18

Active 1,511

Boardmans 1,266

CNA 7,759

Edgars 72,436

Jet 14,478

Jetmart 5,837

MAC 66

Red Square 645

River Island 361

104,377

30 June 2018 116,636

EDCON EXPOSURE – EDGARS BY SIZE

EDGARS EXPOSURE AS AT 30 JUNE 2019

GLA (m²) NUMBER OF STORES

< 3,000m² 14,212 8

3,000m² - 5,000m² 30,328 9

> 5,000m² 27,896 4

72,436 21

BY GLA NUMBER OF STORES

THANK YOU