GROWTHPOINT PROPERTIES AUSTRALIA — Annual Report 2016

Apr 7, 2016

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Overview of Growthpoint Properties Australia

Growthpoint Properties Australia (also referred to in this document as “GOZ” or “the Group”) is an ASX listed real estate investment trust or A-REIT (ASX Code: GOZ), with a mandate to invest in Australian property in the industrial, office and retail sectors .

Our mission

The Group seeks to provide investors with a tradeable security producing consistently growing income returns and long-term capital appreciation .

Our investment philosophy

To be a pure landlord , with 100% of income derived from rent under leases to quality tenants for commercial real estate.

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Building B,
211 Wellington Rd,
Mulgrave, VIC
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Key statistics

Our strategy:

(as at 31 March 2016)

100% investment in Australia

• 20.5cps distribution forecast for the 12 months to 30 June 2016, 4.1% above FY15

All of the Group’s properties are located in Australia where our management understands the key markets. We have increased the diversification of the portfolio to cover every State in Australia and the Australian Capital Territory.

• 6.5% FY16

distribution yield based on 31 March 2016 closing price of $3.14

Not a developer

• 9.8%

The Group does not operate a property development business and does not intend to take on any significant development risk. It will likely continue to purchase properties to be developed, fund construction of developments, or enter a joint venture where the Group becomes the owner of the property on completion but only where material leases are in place.

total Securityholder

return for the 12 months to 31 March 2016

• 19.5% p.a.

total Securityholder return for the five years to 31 March 2016[1]

No funds management

• $2.6 billion

The Group does not have a funds management business nor does it intend to become a fund manager. The Group intends only to manage a portfolio of properties that it owns, and accordingly the Group’s income is, and will continue to be, derived solely from rental income.

portfolio value a 10.1% increase from 30 June 2015

• $1.8 billion

market capitalisation

• 115[th] largest entity on the ASX[2] as at 31 March 2016

Internalised management

The Group has internalised management via a stapled entity structure. Securityholders own both the property trust and the manager/ responsible entity. There are no fees payable to external managers for operating the business and no conflicts of interest between Securityholders and the manager/responsible entity.

• 14[th] largest A-REIT on the ASX[2] as at 31 March 2016

• Source: UBS Investment Research.

• By market capitalisation. Source: Goldman Sachs.

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SECURITYHOLDERS
OWN OWN
GROWTHPOINT GROWTHPOINT
PROPERTIES Manager PROPERTIES
AUSTRALIA LIMITED AUSTRALIA TRUST
PROPERTIES
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Stapled Group Structure

The Group has a stapled entity structure, with internalised management, comprising Growthpoint Properties Australia Limited (the Responsible Entity) and Growthpoint Properties Australia Trust.

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For more information, visit growthpoint.com.au or contact Chief Operating Officer - Aaron Hockly, aaron.hockly@growthpoint.com.au or 03 8681 2903 Growthpoint Properties Australia Trust ARSN 120 121 002 Growthpoint Properties Australia Limited ABN 33 124 093 901 AFSL 316409

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Property Portfolio Overview

As at 31 March 2016

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Industrial Office [1] Total
Number of properties no. 38 19 57
Total value $m 1,222.5 1,389.0 2,611.5
% of portfolio value % 47 53 100
Occupancy % 100 96 98
Like-for-like value change HY16 $m / % of asset value 15.5 / 1.3 61.5 / 5.1 77.0 / 3.2
Total lettable area sqm 874,156 211,611 1,085,767
Average property age years 9.6 7.8 8.7
Average valuation cap rate % 7.3 6.8 7.1
Over / (under) renting % 4.2 7.5 5.9
WALE years 6.0 6.8 6.4
WARR [2] % 2.8 3.3 3.1
Capital expenditure HY16 $m / % of asset value 2.0 / 0.16 1.5 / 0.11 3.5 / 0.13
HY16 net property income $m 46.3 41.1 87.4
Number of tenants [3] no. 39 70 108
Major tenants Woolworths, NSW Police, GE Capital
Linfox, Star Track Finance, Commonwealth of
Australia
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1. Includes Building C, 211 Wellington Road, Mulgrave, Victoria at its ‘on completion’ valuation. 2. Assumes Consumer Price Index change of 1.7% per annum as per Australian Bureau of Statistics release for CY15. 3.Fuji Xerox is both an office and an industrial tenant.

Leasing since 31 December 2015

Address		Sector	Tenant	Start date	Term (years)	NLA (sqm)	Car Parks	Annual rent increases(%)
333 Ann Street Brisbane	QLD	Offce	MasterCard	Q3, FY16	5.6	1,300*	5	Fixed 3.50%
A4, 52 Merivale Street South Brisbane	QLD	Offce	Fuji Xerox	Q2, FY17	7.0	1,425	16	Fixed 3.75%
Total / Weighted Average					6.3	2,725	21	3.6%

• Final area subject to survey.

Sector diversity (%)

Geographic diversity (%) by property value as at 31 March 2016

by property value as at 31 March 2016

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Office 53% VIC 31%
Industrial 47% QLD 28%
NSW 21%
SA 7%
WA 6%
ACT 6%
TAS 1%
Portfolio lease expiry profile (%)
per financial year
100
80 68%
60
40
20 9% 8%
2% 0% 4% 3% 6%
0
Vacant FY16 FY17 FY18 FY19 FY20 FY21 FY22+
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Top ten Tenants

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By passing rent as at 31 March 2016
% WALE
(yrs)
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	Woolworths	22	6.4
	NSW Police	10	8.2
	Commonwealth of Australia	6	10.0
	GE Capital Finance Australasia	6	1.9
	Linfox	4	7.2
	Jacobs Engineering	3	7.7
	Energex	3	11.6
	Fox Sports	2	6.7
	Star Track Express	2	3.3
	Downer EDI Mining	2	6.2
	Total / weighted average	60	6.9
	Balance of portfolio	40	5.7
	Total portfolio	100	6.4

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For more information, visit growthpoint.com.au or contact Chief Operating Officer - Aaron Hockly, aaron.hockly@growthpoint.com.au or 03 8681 2903 Growthpoint Properties Australia Trust ARSN 120 121 002 Growthpoint Properties Australia Limited ABN 33 124 093 901 AFSL 316409

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Financial Management

Interest rate hedging

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60
50
40
30
20
10 Weighted
0 average
1
Time to maturity (yrs) 2.5 3.1 3.1 3.8 4.5 4.5 5.0 5.5 3.7yrs
Fixed Rate (%) 3.20 3.57 3.55 3.70 2.36 2.36 2.42 2.48 3.06%
Maturity date Jul 18 Jan 19 Jan 19 Nov 19 Jun 20 Jun 20 Dec 20 Jun 21
Value ($m)
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1. When the $450 million of fixed debt is included, the weighted average maturity of fixed debt increases to 6.0 years and the weighted average fixed rate reduces to 2.88%.

Operating expenses

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CY15 CY14 Change %Change
Total operating expenses $’000 9,672 8,677 995 11.5
Average gross asset value $’000 2,385,140 2,011,095 374,045 18.6
Operating expenses to
average gross assets % 0.41 0.43 N/A (0.02)
Capital expenditure
CY15 CY14 Change % Change
Total portfolio capital expenditure $’000 9,543 5,878 3,575 60.8
Average property portfolio value $’000 2,322,721 1,984,904 337,817 17.0
Capital expenditure to average
property portfolio value % 0.41 0.30 N/A 0.11
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• Based on its current portfolio, Growthpoint will seek to maintain operating expenses as a percentage of average gross assets at approximately 0.4% p.a.

• Growthpoint’s capital expenditure is relatively low due to its modern office portfolio and high percentage of industrial property.

Debt Facilities ($m)

Financial Management key statistics

(as at 31 March 2016)

• NTA of $2.60 per stapled security as at 31 December 2015

• Balance sheet gearing of 39.7%

• Target gearing range of 35%-45%

• All-in cost of debt 4.44%

• Total debt facilities of $1.38 billion

• $1.06 billion of drawn debt

• Debt headroom of $314.6 million

• 4.5 years average debt maturity

• 6.0 years average fixed rate debt maturity

• 76% debt fixed

• Target range of fixed debt 75%-100%

• Debt covenants LVR<60%; ICR>1.6 times

• 0.41% operating expenses/ average gross assets for CY15

• 0.41% Capital expenditure/ average portfolio value CY15

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350.0
300.0
250.0
200.0
150.0
100.0
50.0
0
2017 2018 2019 2020 2021 2022 2023 2024 2025
[Australian bank debt ] [Fixed rate debt from foreign lenders]
$315m
$255m $255m $250m
$200m
$100m
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Incremental cost of drawing headroom is 2.86% per annum at 31 March 2016.

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For more information, visit growthpoint.com.au or contact Chief Operating Officer - Aaron Hockly, aaron.hockly@growthpoint.com.au or 03 8681 2903 Growthpoint Properties Australia Trust ARSN 120 121 002 Growthpoint Properties Australia Limited ABN 33 124 093 901 AFSL 316409

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Securityholders

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Growthpoint Securityholders Location of Growthpoint
As at 31 March 2016 Securityholders
As at 31 March 2016
GRT 65.0%
Institutional 27.3%
South Africa 75.0%
Retail 7.0%
Australia 15.5%
Directors and
employees 0.7% Rest of World 9.5%
Figures are approximate and based on beneficial ownership.
Relative forecast income yields (%)
to 30 June 2016
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0
GOZ distribution A-REIT A-REIT distribution Australian Shares Commonwealth Inflation [6]
yield [1] distribution yield [2] yield (ex WFD) [3] distribution yield [4] Government
10 year bond [5]
6.7 5.0 5.3 5.0 2.9 1.7
1. FY16 distribution guidance of 20.5 cents divided by 31 December 2015 closing price of $3.08. 2. S&P/ASX 300 Property
Index (Source: UBS Investment Research). 3. S&P/ASX 300 Property Index excluding Westfield Corporation (Source: UBS
Investment Research). 4. FY16 estimated dividend yield for S&P/ASX 300 (Source: Bloomberg). 5. As at 31 December 2015.
Source: Reserve Bank of Australia. 6. CPI All Groups (weighted average of eight capital cities) movement for the year ended 31
December 2015 as released by the Australian Bureau of Statistics on 27 January 2016.
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Distributions (¢)
per stapled security
20.0
18.0
16.0
14.0
12.0
10.0
FY12 FY13 FY14 FY15 FY16 [1]
17.6 18.3 19.0 19.7 20.5 [1]
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1. Distribution guidance only.

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Security price ($)
As at 31 December
3.20
3.00
2.80
2.60
2.40
2.20
2.00
1.80
2011 2012 2013 2014 2015
1.93 2.21 2.47 2.75 3.08
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About Growthpoint South Africa[1]

Growthpoint Properties Limited of South Africa (”GRT”) owns 65% of the securities of Growthpoint (at 31 December 2015) and is its major Securityholder.

Other information about GRT

• Well capitalised and conservatively geared

• The largest primary listed South African REIT

• Good corporate governance with transparent reporting

• Included in the JSE Top 40 Index

• Proven management track record

• Top ten constituent of FTSE EPRA / NAREIT Emerging Index

• Recipient of multiple sustainability, governance and reporting awards

• Included in the JSE Socially Responsible Investment (SRI) Index

• Baa2 global scale rating from Moody’s

• Underpinned by high-quality, physical property assets, diversified across sectors (Retail, Office and Industrial)

Growthpoint represents:

• 26.7% of GRT’s gross property assets

• Consistent record of growth and assets

• creating value for investors with 7.0% compound average annual growth in • 22.3% of GRT’s net property income distributions over the past 5 years • 14.8% of GRT’s total distributable

• • income

• 22.3% of GRT’s net property income

• Sustainable quality of earnings that can be projected with a high degree of accuracy

Key Facts

	Listing	GRT is listed on the Johannesburg Stock Exchange (JSE)
	Ranking on the JSE	32nd by market capitalisation as of 31 December 2015
	Closing exchange rate	AUD:ZAR=11.43
	used
	Market capitalisation	R63,5B / AUD5.5B
	Gross assets Net assets Gearing (SA only)	R110,0B / AUD9.6B R73.8B / AUD6.3B 30.5%
	Distributable Income	R2,4B / AUD446.8m
	ICR (SA only) No. of employees (SA only) Properties	3.3 times 673 474 properties in South Africa,
		including 50% ownership of the
		prestigious V&A Waterfront

1. All information supplied by GRT (figures as at 31 December 2015).

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For more information, visit growthpoint.com.au or contact Chief Operating Officer - Aaron Hockly, aaron.hockly@growthpoint.com.au or 03 8681 2903 Growthpoint Properties Australia Trust ARSN 120 121 002 Growthpoint Properties Australia Limited ABN 33 124 093 901 AFSL 316409