REGION GROUP — AGM Information 2016

Nov 22, 2016

Level 5, 50 Pitt Street Sydney NSW 2000 Tel: (02) 8243 4900 Fax: (02) 8243 4999 www.scaproperty.com.au

23 November 2016

The Manager ASX Market Announcements Office ASX Limited Level 4, Exchange Centre 20 Bridge Street SYDNEY NSW 2000

Dear Sir/Madam

2016 Annual General Meeting | SCA Property Group (ASX: SCP)

Attached are the following presentations which will be presented on Wednesday, 23 November 2016 at the 2016 Annual General Meeting;

• Chairman's address and presentation to the meeting; and
• CEO's address and presentation to the meeting.

SCA Property Group

Encl.

ENDS

Media, Institutional investor and analyst, contact:

Mark Fleming CFO SCA Property Group (02) 8243 4900

Unitholders should contact SCP Information Line on 1300 318 976 (or +61 1300 318 976 from outside Australia) with any queries.

Annual General Meeting

Wednesday 23 November 2016

Chairman's Address

WELCOME (Slide 1)

Good afternoon ladies and gentlemen, and welcome to SCA Property Group's 2016 Annual General Meeting.

My name is Philip Marcus Clark and I am the Chairman of the Group. I have been appointed as Chair of this meeting and I now table my letter of appointment.

This afternoon we are simultaneously holding the meetings of:

• Shopping Centres Australasia Property Management Trust; and
• Shopping Centres Australasia Property Retail Trust,

and for the rest of this meeting I will refer to the business of each Trust conducted as one meeting.

It is now just past 2.00pm, the nominated time for the meeting. I have been informed by our Company Secretary that a quorum is present and I am pleased to declare the meeting open.

Agenda (Slide 2)

There are three components to today's meeting.

First, I will give a brief address. Our CEO Anthony Mellowes will then give a detailed overview of the Group's performance for the 2016 financial year.

Then we will progress to the formal business of the meeting, where the resolutions provided in the Notice of Meeting will be put to the members.

We will allow time for questions and answers relating to each resolution before proceeding to vote on that resolution.

Lastly, I will open the floor to general questions. If you have a question that hasn't been covered

somewhere else in the meeting, you may ask it then.

Only unitholders and their duly appointed Proxies are able to participate in questions and discussion. Visitors are not able to ask questions or participate in discussion.

Following the conclusion of the meeting, I invite you to join the Directors and Management for afternoon tea in the guest lounge area towards the back of this room, or out on the balcony to my right.

INTRODUCTIONS

I would like to start by introducing you to the Independent Directors and Senior Management who are here today.

My fellow Independent Directors are:

• 1. Dr Ian Pollard: Chair of the Audit Risk Management & Compliance Committee;
• 1. Belinda Robson: member of the REM Committee and Investment Committee
• 1. James Hodgkinson OAM: Chair of the Nomination Committee
• 1. Dr Kirstin Ferguson, Chair of the REM Committee; and
• 1. Philip Redmond, Chair of the Investment Committee:

Our executive Directors are:

• Anthony Mellowes, our Chief Executive Officer; and
• Mark Fleming, our Chief Financial Officer.

Also present in the audience are:

• Mark Lamb, Company Secretary and General Counsel;
• Sid Sharma, General Manager Operations;
• Campbell Aitken, our Chief Investment Officer;
• Melissa Kingham, Fund Manager for SURF Funds; and
• Greg Inkson, General Manager Finance.

We also have present, from the Group's auditors Deloitte, Alex Collinson as well as representatives of the Group's Registry, Link Market Services.

Chairman's Introduction (Slide 4)

I am pleased to report that 2016 has been another successful year for SCA Property Group.

Anthony will overview the Group's performance in a moment, but I do want to highlight some important achievements.

Financial Performance Highlights FY16 (Slide 4)

• Distributable earnings for the Group were 13.75 cents per unit, exceeding the initial earnings forecast.
• The full year distribution was 12.2 cents per unit, up 7% from last year.
• Total unitholder returns (distributions plus unit price growth) over the three and a half years from our listing in December 2012 to 30 June 2016, exceeded 100%.

Capital Management and Asset Recycling (Slide 4)

Disciplined capital management and effective asset recycling have contributed to our strong FY16 result. They also enabled us to lift our FY17 earnings guidance from 14.0 cents per unit to 14.4 cents per unit.

We have maintained conservative gearing levels, towards the lower end of our 30% to 40% target range.

Historically low interest costs continue to have a material positive impact on our results. I am pleased to report that as at 30 June 2016, the Group's total average cost of debt was 3.7% per annum.

One of the Group's competitive advantages over the last three years has been the depth of knowledge and strong relationships which our senior management team have in the retail property sector. That has helped us to make a number of accretive off-market acquisitions which have contributed significantly to the Group's above-average performance.

The sale of our low growth New Zealand portfolio has also been a significant contributor to our results. We sold the New Zealand portfolio at a premium of 6.5% above our 31 December 2015 valuations and realised a profit of over \$60 million on our original purchase price.

Settlement of the \$255 million consideration occurred in two (2) equal tranches in July and September this year.

We were able to rapidly deploy approximately two thirds of the proceeds from the New Zealand sale into quality Australian neighbourhood centres and the remaining third into acquisition of an accretive 4.9% stake in Charter Hall Retail Fund which owns a quality portfolio of retail assets.

Funds Management Initiative (Slide 4)

Last year we launched our new funds management business through the unlisted closed end fund, SURF 1.

This new business is trading well. It provides benefit to SCA unitholders in the form of fee income.

We are committed to growing our funds management business. We expect to launch our second unlisted fund, SURF 2, shortly. Details of the SURF 2 offering will be mailed to all SCA unitholders to give our existing unitholders an early opportunity to participate in the offering.

Sustainability and Safety (Slide 4)

Sustainability is a priority for the Group.

Our sustainability strategy rests on 3 pillars:

• Building stronger communities;
• Reducing our environmental footprint; and
• Being a responsible investor.

Our performance is now being tracked and measured. We have provided details of our progress in our Annual Report.

I said last year that we have an absolute commitment to ensuring the safety of everyone who visits our centres and that we are proud of our good safety record.

The tragic events at Dreamworld have reinforced the critical role safety must play in everything we do. I want to reassure you that our commitment to safety remains undiminished and we continue to devote significant resources to ensuring that we live up to our responsibilities in relation to safety.

The Board (Slide 5)

The Board is responsible for working with Management to set the strategic direction for the Group.

We have developed and refined the Group's strategic plan at an offsite meeting held in May each year, which is attended by the Board and Senior Management.

The Board approves the Group's annual budget and business plan and closely monitors the Group's performance throughout the year.

The Board also reviews Management's proposals for major expenditure including proposals for the acquisition and further development of our shopping centres.

Last year we strengthened Board oversight of these important activities by establishing an Investment Committee to review acquisition and development opportunities and to oversight capital management.

The Investment Committee is chaired by Phil Redmond. The CEO, the CFO and NED Directors, Belinda Robson and James Hodgkinson are Committee members. They all have industry leading skills and significant experience in real estate investment.

A lot of the work done by the Board is done in the first instance by our Board Committees.

We now have four (4) Board Committees:

• The Audit, Risk Management and Compliance Committee, chaired by Dr Ian Pollard;
• The Remuneration Committee chaired by Dr Kirstin Ferguson;
• The Nomination Committee chaired by James Hodgkinson; and
• The Investment Committee chaired by Philip Redmond.

The Annual Report provides more detailed information about those Board Committees and their respective roles and responsibilities.

The Board held 15 formal meetings last year and there were 15 Board Committee meetings. In addition, our Directors attend to a lot of work out of session. Being a Director of SCA Property Group is quite a demanding role in terms of both time commitment and responsibilities.

Our Directors must have the skills and experience necessary to discharge those responsibilities.

Later today we will be asking you to re-elect two of our Directors to the Board, Belinda Robson and James Hodgkinson. Belinda and James both have outstanding credentials and have made significant contributions as Board members.

Before I ask you to vote, you will hear from Belinda and James and you will have an opportunity to ask them questions.

Australian Supermarkets - Competitive Environment (Slide 5)

Due to the Group's provenance, we currently lease to approximately 80% Woolworths Supermarkets and 20% Coles Supermarkets.

Whilst we enjoy security of earnings through supermarket base rent, rental growth from supermarkets is largely dependent upon the performance of those supermarkets.

Woolworths has had its well documented challenges in recent times. However I do see upside for us when Woolworths resolves its current issues. I am encouraged to see that Woolworth's commitment to focus on their supermarket business is showing some early results.

Investors (Slide 5)

The Board made a commitment to endeavour to provide appropriate opportunities to existing unitholders to increase their investment in SCP on favourable terms.

We have honoured that commitment and will continue to do so.

The distribution reinvestment plan has proved popular with unitholders and has been re-opened.

Conclusion (Slide 5)

2016 has been another busy and successful year for SCA Property Group.

I am proud to inform you that the Group has won East Coles Awards for:

• Best earnings quality;
• Best investor relations; and
• Best investment desirability (Real Estate ASX 101-200).

We have become a purely Australian fund by disposing of our portfolio in New Zealand. We have successfully redeployed the proceeds from the New Zealand sale into accretive acquisitions in Australia, which is a significant achievement in a very tight property market.

Our primary focus remains on neighbourhood shopping centres, where we now have the largest portfolio of neighbourhood centres in Australia.

The Board and Management remain steadfastly committed to our core objective of providing sustainable returns to unitholders, through superior management of a quality portfolio of shopping centres.

We will continue our defensive focus on non-discretionary retail tenants.

In closing I would like to again thank you for your support, welcome you to our AGM and to thank you again for taking the time to join us.

I will now hand over to Anthony.

Annual General Meeting Wednesday 23 November 2016 CEO's Address

Good afternoon Ladies and Gentlemen, my name is Anthony Mellowes and I am the Chief Executive Officer of the SCA Property Group.

I am very pleased to be presenting to you at the fourth Annual General Meeting of SCA Property Group.

It has again been an active year for the entire management team at SCA and myself, and I am very proud of what has been accomplished in our fourth year of reporting.

This afternoon I will run through some of our key achievements for FY16 and update our outlook for FY17.

High Quality Portfolio (Slide 8)

But first of all, for those of you not familiar with the SCA portfolio, it currently consists of:

• 74 operating Shopping Centres across Australia, plus 5 managed properties in our unlisted business, SCA Funds Management;
• The average age of the Australian assets is relatively young at 9.0 years;
• Approximately 55% of our income is derived from Wesfarmers and Woolworths with average lease tenure of 14 years; and
• As at 30 June 2016 the Australian portfolio was valued at \$1.9 billion, and we now have in excess of 1,000 Specialty Tenants, with a total occupancy across the portfolio of 98.6%.

FY16 Highlights (Slide 9)

I will now take you through some of the key highlights for the financial year ended 30 June 2016 and the outlook for SCA Property Group:

• We delivered Funds from Operations of \$100.1m, an increase of 25% on the prior financial year.
• This enabled us to pay distributions to unitholders of 12.2 cpu, which was up 7% on the prior year, this represented a payout ratio of around 89%.
• Our gearing as at 30 June 2016 was 34%, which is well within our stated policy range of 30-40%.
• Our NTA at 30 June 2016 increased to \$1.92 per unit, up from \$1.77 per unit at the same time in the prior year, due primarily to the valuation cap rate on our properties compressing from 7.49% to 7.13%.

• Our portfolio occupancy has stabilized at 98.6% which represents a specialty vacancy rate of 4.3% at 30 June 2016.
• SCP continued to recycle its assets during the year. SCP acquired 6 neighbourhood centres for \$145.3m which is in line with our strategy to continue to consolidate a fragmented market. We also announced that we had sold our entire New Zealand portfolio for \$255m which settled in FY17, making SCP an entirely Australian fund.
• During the year we also launched SURF1, our initial foray into Funds Management. The Fund comprises non-core SCP assets which were sold to the Fund for \$60.9m in accordance with independent valuations.

SCP Has Delivered Strong Returns (Slide 10)

This strong performance has resulted in good returns for unitholders.

• We achieved a cumulative total return in excess of 100% since listing in December 2012 to June 2016.
• This total return out-performed the ASX200 A-REIT index over that period by approximately 15%.
• Our Funds from Operations or FFO per unit for FY16 of 13.75 cpu exceeded FY15 by 7.4% on the back of initiatives to reduce group operating cost, additional income sources and the accretive acquisition of investment properties.
• Our distributions per unit for FY16 of 12.2 cpu exceeded FY15 by 7%.

Key Achievements (Slide 11)

Our key achievements in FY16 have been due to the continued delivery of our strategy, or as I like to say, "doing what we say we're going to do".

• 1. We continued to optimise our core business, our specialty tenants performed strongly during the year with sales growth in excess of 5%pa, this assisted us in generating 7.5% average rental increases across 69 renewals, our specialty occupancy cost ratio is now down at 9% which is at the lower end of our range. While our specialty tenants' sales growth has been strong, our anchor tenants' sales growth has been subdued due to SCP's heavy weighting to Woolworths and the discounting that both Woolworths and Coles are currently engaged in. Despite some of the headwinds that we are experiencing with our anchor tenants, SCP was still able to generate 3.4% comparable Net Operating Income growth for FY16.
• 1. SCP has three growth initiatives being, Acquisitions, Developments and Funds Management

Acquisitions: We continue to consolidate the fragmented market of Neighbourhood Centres, during the year we acquired six centres for \$145.3m, however since 1 July 2016 we acquired a further five centres for \$144.3m and a 4.9% stake in CQR for \$83.4m which completes the redeployment of our NZ proceeds of \$255m.

Developments: Both the developments at Lismore and Chancellor Park have been completed and we have also commenced the redevelopment of our largest asset, Kwinana with the introduction of a new Coles supermarket and associated specialty stores.

Funds Management: We completed SURF1 in October 2015 and we will be launching SURF2 in February 2017.

• 1. Our balance sheet is in a strong position with gearing at 34% which is comfortably within our range of 30-40%. Our weighted average cost of debt has reduced to 3.7% and our weighted average term to maturity of our debt is 5.7 years with 68% of drawn debt either fixed or hedged. During the year our Distribution Reinvestment Plan raised \$24.3m of new equity and as the Chairman Phil Clark has pointed out we have now re-instated the Distribution Reinvestment Plan for the January distribution.
• 1. Finally for FY16, we grew our Funds from Operations strongly by 25% and distributions by 7.0% over FY15.

Core Strategy Unchanged (Slide 12)

SCP will continue to seek out defensive, resilient cashflows to support secure distributions for our unitholders. We will continue to focus on convenience-based retail centres that are weighted to the nondiscretionary retail sectors, that have long leases to quality anchor tenants such as Woolworths and Wesfarmers. We will continue to have an appropriate capital structure that allows us to continue to focus on growth opportunities in our sector.

Potential Earnings Growth Trends (Slide 13)

We believe that that there is continued solid earnings growth to be expected over time from SCP.

We believe that 1-3% pa growth is achievable from our core business. Due to the moderate sales growth performance of our key anchor tenant Woolworths, we do not expect strong rental growth from our anchors, approximately 40% of our anchor tenants have a fixed 5% rental increase during FY18. Of course, if the trading performance of our anchor tenants improves, there is earnings upside for SCP.

Our specialty tenants now account for 45% of our gross income and these leases generally have 3-4% fixed rental increases every year, together with the strong rental reversions of 7.5% being achieved as tenants renew their leases we believe that overall our specialty rental growth is between 4-5% pa. The culmination of these factors should generate Comparable Net Operating Income growth of 1-3% from our core business.

As I mentioned, on top of the core business growth, we have identified we are focused on three growth Initiatives being: Acquisitions, Developments and Funds Management, which I will go into a further detail in the following slides. We believe that these three growth initiatives combined can contribute a further 1% pa of earnings growth delivering a total of 2-4%+ pa earnings growth for the medium to long term.

Acquisitions (Slide 14)

Fragmented ownership of the neighborhood centres in Australia provides consolidation opportunities for SCP. There are over 850 Coles and Woolworths anchored neighbourhood centres in Australia and SCP is the largest owner by number in this sector. SCP has an opportunity to continue to consolidate this fragmented segment by utilising its funding capability, management capability and industry knowledge to source and execute acquisition opportunities. Since listing in December 2012 SCP has acquired 32 neighborhood centres for nearly \$800m in aggregate.

This sector is also fairly liquid. During the 12 months to June 2016 there were 54 Coles and Woolworths anchored neighborhood centres that transacted for approximately \$1.2bn. SCP and ISPT (an Industry Superannuation Property Fund) were the largest individual acquirers of neighborhood centres in this period.

Development Pipeline (Slide 15)

In addition to our acquisitions and disposals we have started to execute on the development opportunities within the portfolio. We have identified over \$150m of potential development opportunities at 20 of our centres over the next 5 years.

These developments are all Brownfield opportunities that are relatively low risk and should be incremental to the earnings of SCP.

Lismore NSW refurbishment and Chancellor Park in Queensland expansion were completed during FY16. We have also commenced construction on our largest asset at Kwinana in WA where we are constructing a new Coles Supermarket and associated specialty stores. We have also commenced construction on a new development at Bushland Beach in Townsville Queensland. Both of these developments are scheduled to be concluded by August 2017.

Funds Management (Slide 16)

On 1 September 2015, SCA successfully launched its initial unlisted retail fund called "SURF1". This new funds management business has the potential to deliver additional earnings growth in the future for SCP. SCP will be launching "SURF 2" in February 2017, the assets for SURF2 are both from NSW being Katoomba Woolworths / Big W and the Mittagong Dan Murphy's. This new funds management business will allow SCA to utilise its expertise and platform to earn capital light management fees in the future. I am pleased to announce that we have employed Melissa Kingham to be the SURF Fund manager.

Sustainability (Slide 17)

Sustainability has become a particular focus in the Australian commercial real estate sector, particularly with regards to the identification and management of environmental, social and governance risks to investment value. Throughout 2016 SCP has developed and launched a new sustainability policy and strategy, tailored to our particular asset type and business. Our strategy has three core objectives.

Firstly, Strong Communities strengthen the relationships between our shopping centres and their local communities and also to help improve the wellbeing of those communities.

Secondly, Environmentally Efficient Assets will reduce the environmental footprint of our shopping centres, particularly greenhouse gas emissions through energy consumption. We have already piloted both LED lighting and Solar Panel Electricity generation that is used in the centres for both Centre and tenant electricity usage, both of these pilots have performed to expectations and we will continue to roll out these initiatives in our centres.

Finally, Responsible Investment will see us manage the environmental, social and governance (ESG) risks that are material to investment values and communicate our performance on this.

SCA is pleased with our progress to date and will continue to invest in and be a socially responsible entity.

Key Priorities and Outlook (Slide 18)

SCP will continue to deliver on its stated strategy in FY17. We continue to focus on optimising our core business by:

• increasing specialty rent per sqm by optimising the tenancy mix and achieving rental uplifts on renewals; and;
• Managing our expenses (both at a centre and corporate level) to grow at a level that is no greater in percentage terms than our income growth; and
• Minimise the potential impact of a sale or closure of the Masters store in Mt Gambier.

Focusing on our three growth initiatives by:

• seeking accretive acquisition opportunities consistent with SCA's strategy and investment criteria;
• continuing to progress the identified development pipeline; and
• following on from the successful first retail fund (SURF1), launch SURF2 in February 2017 and conclude SURF3 and SURF4 within 2 years.

Continue to actively manage our balance sheet to maintain diversified funding sources with long weighted average debt expiry and a low cost of capital consistent with our risk profile and as mentioned previously we have turned the Distribution Reinvestment Plan back on for the January 2017 distribution.

With respect to valuations our process is underway and we will be announcing the results in mid-December 2016 however, we note that capitalization rates in our sector continue to compress and as a result we expect to see an uplift in valuations for our portfolio in December 2016.

Finally, I am pleased to re-affirm that SCP recently upgraded its guidance:

• Our guidance for FY17 Funds from Operations of FFO per unit increased from 14.0 cpu to 14.4 cpu representing a 4.7% increase on FY16; and
• Our guidance for FY17 Distribution increases from 12.6 cpu to 13.0 cpu representing a 6.5% increase on FY16.

Thank you for your time this afternoon.

SCA PROPERTY GROUP ANNUAL GENERAL MEETING

23 November 2016 The Barnet Long Room, Level 1, Customs House, 31 Alfred Street, Sydney NSW 2000

Chairman's Address

CEO's Address

Formal Business

General Questions

CHAIRMAN'S ADDRESS

Philip Marcus Clark AM

Welcome

Financial Performance Highlights FY16

Capital Management and Asset Recycling

Funds Management Initiative

Sustainability and Safety

The Board

Australian Supermarkets - Competitive Environment

Investors

Conclusion

CEO'S ADDRESS

Anthony Mellowes

FY16 HIGHLIGHTS

Financial	Capital	Active Portfolio
Performance	Management	Management
\$100.1m, up by 25.0% Funds from operations1	34.0% Gearing3, within 30 – 40% target range	98.6% 4.3% Portfolio occupancy6 Specialty vacancy6
\$92.3m, up by 25.2%	\$1.92, up by 8.5%	7.13%
Adjusted Funds From Operations1	NTA per unit4	Portfolio weighted average cap rate6
12.2 cpu, up by 7.0% Distribution paid to unitholders1,2	3.7% 5.7 yrs Weighted average Weighted Average cost of debt5 debt maturity5	\$145.3m \$60.9m Acquisitions7 Divestments7

1 FY 16 vs FY 15

2 Final distribution of 6.2 cpu in respect of the six months ended 30 June 2016 is expected to be paid on 31 August 2016. "cpu" stands for Cents Per Unit

3 As at 30 June 2016. Gearing is calculated as Finance debt (including NZ denominated debt) net of cash, with USD denominated debt recorded as the hedged AUD amount, divided by total tangible assets (net of cash and derivatives)

• 4 Compared to 30 June 2015
• 5 As at 30 June 2016

6 As at 30 June 2016. Includes acquisitions during 12 months ended 30 June 2016. Excludes New Zealand

7 During the 12 month period we acquired 6 neighbourhood shopping centres for \$145.3m (excluding transaction costs of \$10.0 million), and we sold 5 assets to the "SURF 1" fund for \$60.9m. We contracted to sell the NZ properties in June 2016 however this sale will not complete until the FY17 financial year

STRONG RETURNS TO UNITHOLDERS

SCP has delivered superior returns to Unitholders

• SCP has provided stable and secure distributions that have been supplemented by strong unit price performance during the FY16 financial year, and since IPO.
• SCP has delivered a total unitholder return (unit price appreciation plus distributions) of 100.9% since IPO in November 2012, representing 15.3% outperformance relative to the S&P / ASX 200 A-REIT Index over the same period.

KEY ACHIEVEMENTS – DELIVERING ON STRATEGY

Optimising the Core Business	• Specialty tenants are performing strongly for FY16 – Sales growth of over 5% pa continuing – 7.5% average rental increase across 69 renewals completed during FY16 – Occupancy cost down to 9.3% • Anchor tenant sales growth remains subdued • Comparable NOI growth of 3.4% above the same period last year
Growth Opportunities	Continued consolidation in fragmented market: we acquired 6 centres for \$145.3m during FY16. • – Wesfarmers-owned retailers now represent 20% of our anchor tenants (by number) • Since 1 July 2016 we acquired a further 5 centres for \$144.3m and a 4.9% stake in CQR for \$83.4m which completes the redevelopment of our NZ proceeds Acquisitions primarily funded by capital recycling, with the divestment of five non-core assets to • "SURF 1" for \$60.9m, and agreed to divest 14 New Zealand assets for NZ\$267.4m • Refurbishment of Lismore and supermarket expansion at Chancellor Park completed. Kwinana Development has commenced (Coles third anchor) and Bushland Beach (new Coles-anchored centre) Completed first unlisted retail fund "SURF 1" in October 2015, planning well advanced for "SURF 2" •
Capital Management	Balance sheet in a strong position • – Gearing of 34.0% comfortably within our 30% to 40% target range – Weighted average cost of debt reduced to 3.7%, weighted average term to maturity of debt is 5.7 years, with 68% of drawn debt either fixed or hedged – First debt maturity extended to November 2018 • Distribution Reinvestment Plan raised \$24.3m of new equity during FY16
Earnings Growth Delivered	FY16 Funds From Operations continues to grow strongly, up 25.0% on the same period last year • FY16 FFO of 13.75 cpu represents growth of 7.3% on the same period last year • • FY16 Distribution of 12.2 cpu represents growth of 7.0% on the same period last year

CORE STRATEGY UNCHANGED

Defensive, resilient cashflows to support secure distributions

Focus on convenience based retail centres	Weighted to non-discretionary retail segments	Long leases to quality anchor tenants

Appropriate capital structure Growth opportunities

POTENTIAL EARNINGS GROWTH TRENDS

Continued solid earnings growth expected over time

		Description and Assumptions	Indicative Contribution to FFO Growth Rate (% pa) (medium to longer term from FY18 onwards)
ess	Anchor Rental Growth	• Anchor rental income represents about 55% of overall gross property income Once turnover thresholds are met, rent will grow in proportion to Anchors' sales growth • • Around 39% of Anchor tenancy leases have a minimum 5% increase in base rent in FY18/FY19	0 - 1%
n usi ore B C	Specialty and Other Rental Growth	Specialty rental income represents about 45% of overall gross property income • • Specialty leases generally have contracted growth of 3-4% pa Positive specialty rent reversions expected on expiry due to relatively low rent / sqm at present •	1 - 2%
	Expenses	• After investment in FY15 and FY16, Property Expenses and Corporate Costs expected to grow at same rate as rental income • Interest expense is continuing to be actively managed	0%
		Indicative Comparable NOI Growth (%)	1 – 3%
	Property Development	Selective extensions and refurbishments of our existing centres are intended to be undertaken • in the future • We have identified around \$150m of development opportunities so far
wth Initiatives	Acquisitions	• Selective acquisitions will continue to be made in the fragmented neighbourhood shopping centre segment New Zealand divestment proceeds of \$253.1m to be reinvested at a higher yield •	1% +
ro G	Other Opportunities	• New funds management business, with "SURF 2" to be launched in 1H FY17

2 - 4% +

NEIGHBOURHOOD CENTRES IN AUSTRALIA

Fragmented ownership provides acquisition opportunities

Neighbourhood centre landscape in Australia

• There are over 850 Coles and Woolworths anchored neighbourhood centres in Australia
• SCP is the largest owner (by number) of neighbourhood centres in Australia. SCP has an opportunity to continue to consolidate this fragmented segment by utilising its funding capability, management capability and industry knowledge to source and execute acquisition opportunities from private and corporate owners. Since listing SCP has completed the acquisition of 32 neighbourhood centres for \$794.2m in aggregate

Recent transactions

• During the twelve months ended 30 June 2016, 54 Woolworths / Coles anchored neighbourhood centres changed hands for aggregate consideration of \$1,243m
• SCP and ISPT were the largest individual buyers of neighbourhood centres during that period

Source: Management estimates

INDICATIVE DEVELOPMENT PIPELINE

We have identified around \$150m of development opportunities at 20 of our centres over the next 5 years1

• We invested \$9.1m on developments during FY16, including \$2.8m on the Lismore refurbishment, \$3.9m on the Chancellor Park supermarket expansion, \$0.5m on Kwinana preliminaries, and the balance on preliminaries for other projects

• In FY17, the major projects will be building a new Coles-anchored centre at Bushland Beach near Townsville (expected to open in May 2017), and adding Coles as a third anchor at Kwinana (expected to open in July 2017)

1 The exact timing of future developments is subject to prevailing market conditions and regulatory approvals

FUNDS MANAGEMENT BUSINESS

Potential to deliver additional earnings growth in the future

• First fund "SURF 1" successfully completed
• Five SCP non-core assets acquired for \$60.9m, a 12% premium to book value
• Fund commenced on 1 October 2015
• SCP retains a 24.4% equity interest in the fund
• We intend to launch "SURF 2" during 2H FY17
• To comprise Katoomba Woolworths / Big W, and Dan Murphy's at Mittagong NSW another SCP non-core asset
• SCP will continue to launch additional retail funds
• Assets may include either other SCP non-core assets, or acquired assets
• Utilise SCP's large unitholder base and retail expertise
• The funds management business will allow SCP to recycle non-core assets, and utilise its expertise and platform to earn capital-light management fees in the future

SUSTAINABILITY

We continue to focus on long-term sustainable performance

SCP has established a sustainability strategy (environment, social and governance) that aims to reduce risks, improve operations and enhance stakeholder relationships for the long-term. In FY16, SCP:

• Launched a Sustainability Strategy and a Sustainability Policy
• Piloted a "Stronger Communities" approach to engage and support the communities local to our centres
• Developed an energy improvement plan for all subregional and neighbourhood centres and benchmarked the environmental performance of our centres
• Piloted LED lighting and solar panel installations to reduce greenhouse gas emissions and operating costs
• Published a Sustainability Report outlining our approach, commitments and performance
• Participated in the Global Real Estate Sustainability Benchmark (GRESB), an international sustainability risk management survey and standard for real estate investment managers run by leading investors
• Achieved 5.5 stars NABERS Energy rating (out of six) for SCP's office
• Launched our inaugural Annual Sustainability Report available on our website

Our sustainability objectives

1	STRONGER COMMUNITIES	Strengthen the relationships between our shopping centres and their local communities and help improve the wellbeing and prosperity of those communities
2	ENVIRONMENTALLY EFFICIENT CENTRES	Reduce the environmental footprint of our shopping centres, particularly greenhouse gas emissions through energy consumption
3	RESPONSIBLE INVESTMENT	Manage environmental, social and governance (ESG) risks that are material to investment value and communicate our performance on this

KEY PRIORITIES AND OUTLOOK

Continue to deliver on strategy in FY17

Optimising the Core Business	Increase specialty rent per sqm by optimising tenancy mix and achieving rental uplifts • on renewals Manage potential sale or closure of Masters store at Mount Gambier •
Growth Opportunities	• Redeployment of NZ sale proceeds of \$255m into value-accretive acquisition opportunities consistent with our strategy and investment criteria now complete  Includes \$83m for a 4.9% interest in CQR • Progress our identified development pipeline Launch our second retail fund ("SURF 2") in 2H FY17 •
Capital Management	Continue to actively manage our balance sheet to maintain diversified funding sources with • long weighted average debt expiry and a low cost of capital consistent with our risk profile • Distribution Reinvestment Plan ("DRP") turned back on
Earnings Guidance	• FY17 EPU guidance increased to 14.4 cpu and FY17 DPU guidance increased to 13.0 cpu (takes into account the sale of the New Zealand assets, the five post-balance date acquisitions and the investment into CQR)