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GRT - Growthpoint Properties - Audited results for the year ended 30 June 2009

Release Date: 26/08/2009 10:00
Code(s): GRT
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GRT - Growthpoint Properties - Audited results for the year ended 30 June 2009 Limited Growthpoint Properties Limited (Incorporated in the Republic of South Africa) (Registration number 1987/004988/06) Share code GRT ISIN ZAE 000037669 AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2009 LIMITED 7,6% DISTRIBUTION GROWTH TO 114,6 CENTS PER LINKED UNIT ACQUISITION OF CONTROLLING SHARE IN A LISTED AUSTRALIAN PROPERTY TRUST R1,7 BILLION CAPITAL RAISED THROUGH SUCCESSFUL RIGHTS OFFER INCLUSION IN THE JSE TOP 40 INDEX AND MSCI EMERGING MARKETS INDEX CONSOLIDATED INCOME STATEMENT 30 June 30 June 2009 2008 Note Rm Rm
Revenue excluding straight-line lease income adjustment 3 211 2 712 Straight-line lease income adjustment 219 208 Revenue 3 430 2 920 Property expenses (759) (675) Net property income 2 671 2 245 Other operating expenses (75) (62) Net property income after other operating expenses 2 596 2 183 Investment income 1 1 Operating profit 2 597 2 184 Fair value adjustments 1 (143) (139) Finance costs (921) (697) Non-cash charges 2.1 (140) (193) Capital items and trading profits (35) 22 Finance income 162 87 Profit before debenture interest interest (1 612) (1 363) Loss before taxation (92) (99) Taxation charge 23 1 - taxation on trading profits - (2) - normal taxation (5) (2) - deferred taxation 28 - - capital gains taxation - 5 Loss for the year 2.2 (69) (98) Note 1: Fair value adjustments (143) (139) Gross investment property fair value adjustment 189 1 823 Less: straight-line lease income adjustment (219) (208) Net investment property fair value adjustment (30) 1 615 Listed property investments 1 (1) Borrowings and derivatives (1 442) 1 197 Long-term loans granted to BEE consortia 35 (48) Debentures 1 293 (2 902) Debentures are adjusted to fair value which represents the net asset value attributable to debenture holders, excluding intangible assets. The debenture fair value adjustment consists of: Fair value adjustments on other assets and liabilities excluding fair value adjustment on debentures 1 436 (2 763) Straight-line lease income adjustment (219) (208) Capital gains taxation - (5) Non-cash financing charge 20 19 Increase in staff incentive scheme liability 21 75 Capital items and trading profits 35 (20) Debenture fair value adjustment 1 293 (2 902) Note 2: 2.1 Non-cash charges (140) (193) Non-cash financing charge (20) (19) Amortisation of intangible asset (99) (99) Increase in staff incentive scheme liability (21) (75) 2.2 Loss for the year The loss for the year is attributable to the amortisation of the intangible asset. This is a non-cash accounting entry and does not affect distributable earnings. Calculation of Distributable Earnings Net property income after operating expenses 2 596 2 183 Less: straight-line lease income adjustment (219) (208) Investment income 1 1 Finance costs (921) (697) Finance income 162 87 Taxation (excluding deferred taxation) (5) (2) Distributable earnings 1 614 1 364 Total distribution (1 614) (1 364) - Debenture interest (1 612) (1 363) - Ordinary dividend (2) (1) Linked Linked units units Linked units in issue at the end of the year 1 409 018 815 1 280 926 195 Weighted number of linked units in issue 1 409 018 815 1 238 460 442 cents cents
Distribution per linked unit 114,60 106,50 Six months ended 31 December 56,30 51,10 Six months ended 30 June 58,30 55,40 Basic loss per share 3 (4,90) (7,91) Headline earnings per linked unit 4 45,26 159,31 Rm Rm Basic loss is reconciled to headline earnings as follows: Loss after taxation (69) (98) Add back: net fair value adjustment - investment property 26 (1 381) - Fair value adjustment 30 (1 615) - Applicable taxation (4) 234 Headline loss attributable to shareholders (43) (1 479) Less: net fair value adjustment - debentures (931) 2 089 - Fair value adjustment (1 293) 2 902 - Applicable taxation 362 (813) Add back: debenture interest paid 1 612 1 363 Headline earnings attributable to linked unitholders 638 1 973 Note 3: The directors are of the view that the disclosure of earnings per share, while obligatory in terms of IAS 33, Earnings Per Share and the JSE listing requirements, is not meaningful to investors as the shares are traded as part of a linked unit and practically all of the revenue earnings are distributed in the form of debenture interest plus dividends in the ratio of 1 000 to 1. In addition, headline earnings include profit on the sale of listed property investments, fair value adjustments on listed property investments, fair value adjustments on interest-bearing and zero-coupon borrowings and debentures as well as non-cash charges, which do not affect distributable earnings. The calculation of distributable earnings as set out above is more meaningful to investors and is, in accordance with Growthpoint`s reporting policy. Note 4: In terms of Circular 8/2007, issued by SAICA, both the fair value adjustment on investment property and debentures are added back in the calculation of headline earnings per linked unit. The Circular does not make provision for the fair value adjustment on other non-current financial liabilities to be added back. CONSOLIDATED BALANCE SHEET 30 June 30 June 2009 2008 Note Rm Rm
ASSETS Non-current assets 30 991 30 231 Fair value of investment property for accounting purposes 27 582 26 409 Straight-line lease income adjustment 1 055 836 Fair value of long-term property assets 28 637 27 245 Intangible assets 1 733 1 832 Other long-term employee benefits 47 59 Equipment 2 2 Listed property investments 10 9 Long-term loans granted to BEE consortia 396 325 Derivative assets 166 759 Current assets 1 374 426 Investment property reclassified as held for sale 596 42 Trade and other receivables 281 357 Cash and cash equivalents 497 27 Total assets 32 365 30 657 EQUITY AND LIABILITIES Shareholders` interest 1 436 1 501 Ordinary share capital 70 64 Non-distributable reserve 1 366 1 437 Non-current liabilities - debentures 5 18 641 18 283 Linked unitholders` interest 20 077 19 784 Other non-current liabilities 9 174 9 519 Other non-current financial liabilities 8 815 9 132 Deferred tax liability 359 387 Current liabilities 3 114 1 354 Trade and other payables 615 638 Current portion of non-current financial liabilities 1 673 - Taxation payable 3 5 Linked unitholders for interest and dividends 823 711 Total equity and liabilities 32 365 30 657 Net asset value per linked unit (cents) 1 425 1 545 Tangible net asset value per linked unit (cents) 1 327 1 432 The decrease in the net asset value per linked unit was mainly due to the fair value adjustment to borrowings and derivatives, as a result of the reduction in long-term interest rates from 30 June 2008 to 30 June 2009. Note 5: Non-current liabilities - debentures Fair value at the beginning of the year 18 283 13 646 Issued during the year 1 651 1 735 Fair value adjustment (Note 1) (1 293) 2 902 Fair value at the end of the year 18 641 18 283 CONSOLIDATED CASH FLOW STATEMENT 30 June 30 June
2009 2008 Note Rm Rm Cash flow from operating activities 2 416 2 057 Investment income 1 1 Net finance costs (780) (523) Taxation (paid)/received (7) 1 Capital items and trading profits (35) 22 Distribution to unitholders (1 502) (1 174) Net cash inflow from operating activities 93 384 Net cash outflow from investing activities (1 767) (3 296) Net cash inflow from financing activities 2 144 2 920 Net increase in cash and cash equivalents 470 8 Cash and cash equivalents at beginning of the year 27 19 Cash and cash equivalents at end of the year 497 27 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Ordinary Non-
share capital distributable reserve Rm Rm 54 -
Balance at 30 June 2007 Shares issued 10 1 536 Loss for the year - - Transfer to non-distributable reserve - (99) Dividends - - Balance at 30 June 2008 64 1 437 Shares issued 6 - Loss for the period - - Transfer to non-distributable reserve - (71) Dividends - - Balance at 30 June 2009 70 1 366 Shareholders`
Reserves interest Rm Rm - 54 Balance at 30 June 2007 Shares issued - 1 546 Loss for the year (98) (98) Transfer to non-distributable reserve 99 - Dividends (1) (1) Balance at 30 June 2008 - 1 501 Shares issued - 6 Loss for the period (69) (69) Transfer to non-distributable reserve 71 - Dividends (2) (2) Balance at 30 June 2009 - 1 436 SEGMENTAL ANALYSIS INCOME STATEMENT EXTRACTS Retail Office Rm Rm Year ended 30 June 2009 Revenue excluding straight-line lease income adjustment 1 144 1 315 Straight-line lease income adjustment 31 152 Revenue 1 175 1 467 Property expenses (289) (304) Net property income 886 1 163 Fair value adjustment: - investment property 210 (73) Year ended 30 June 2008 Revenue excluding straight-line lease income adjustment 1 003 1 050 Straight-line lease income adjustment 57 99 Revenue 1 060 1 149 Property expenses (260) (263) Net property income 800 886 Fair value adjustment: - investment property 376 735 BALANCE SHEET EXTRACTS At 30 June 2009 Non-current assets - Investment property Opening balance - 30 June 2008 9 692 11 381 Acquisitions 10 195 Developments and capital expenditure 241 960 Disposals - (88) Transfer to investment property reclassified as held for sale - (574) Fair value adjustment 210 (73) Fair value of property assets - 30 June 2009 10 153 11 801 At 30 June 2008 Non-current assets - Investment property Opening balance - 30 June 2007 8 573 8 499 Reclassification (73) 73 Acquisitions 654 1 555 Developments and capital expenditure 261 582 Disposals (99) (21) Transfer to investment property reclassified as held for sale - (42) Fair value adjustment 376 735 Fair value of property assets - 30 June 2008 9 692 11 381 Industrial Total Rm Rm Year ended 30 June 2009 Revenue excluding straight-line lease income adjustment 752 3 211 Straight-line lease income adjustment 36 219 Revenue 788 3 430 Property expenses (166) (759) Net property income 622 2 671 Fair value adjustment: - investment property 52 189 Year ended 30 June 2008 Revenue excluding straight-line lease income adjustment 659 2 712 Straight-line lease income adjustment 52 208 Revenue 711 2 920 Property expenses (152) (675) Net property income 559 2 245 Fair value adjustment: - investment property 712 1 823 BALANCE SHEET EXTRACTS At 30 June 2009 Non-current assets - Investment property Opening balance - 30 June 2008 6 172 27 245 Acquisitions 190 395 Developments and capital expenditure 303 1 504 Disposals (34) (122) Transfer to investment property reclassified as held for sale - (574) Fair value adjustment 52 189 Fair value of property assets - 30 June 2009 6 683 28 637 At 30 June 2008 Non-current assets - Investment property Opening balance - 30 June 2007 5 101 22 173 Reclassification - - Acquisitions 57 2 266 Developments and capital expenditure 302 1 145 Disposals - (120) Transfer to investment property reclassified as held for sale - (42) Fair value adjustment 712 1 823 Fair value of property assets - 30 June 2008 6 172 27 245 COMMENTARY INTRODUCTION Growthpoint is the largest South African listed property company with a quality portfolio of 438 properties valued at over R29 billion. The portfolio is well diversified in the three major sectors of commercial property, being office, retail and industrial, with the bulk of the value situated in the major metropolitan areas in strong economic nodes. SEE PRESS RELEASE FOR GRAPHS Growthpoint had a market capitalisation in excess of R18 billion at 30 June 2009. The linked units are highly liquid, with more than R800 million traded per month on average over the last two years. Over the last year, on average, more than 60 million linked units traded per month (2008: 57 million). The company`s mission is to provide investors with a highly liquid, tradable instrument delivering consistently growing income returns and real capital appreciation over the long-term. Effectively, all revenue profits earned by the company are distributed to unitholders semi-annually, so that the company is very similar to the Real Estate Investment Trust (REIT) models that are well established internationally. Growthpoint`s distributions are based on sustainable income generated from rentals. The company does not distribute capital profits. INCLUSION IN VARIOUS INDICES On 25 November 2008, Growthpoint was included in the Morgan Stanley Capital International (MSCI) emerging markets index. Furthermore, Growthpoint made its landmark debut on the JSE/Actuaries All Share 40 Top Companies Index (ALSI 40 Index) on 22 December 2008, ranked 31 of the top 40 companies. The inclusion in these indices has resulted in increased international exposure for Growthpoint and the foreign shareholding has increased to above 6% for the first time. FINANCIAL RESULTS In spite of difficult economic conditions that prevailed since the last quarter of 2008, Growthpoint has delivered growth in distributions for the year ended 30 June 2009 of 7.6%. Distribution growth was slower than it has been in the last two years, mainly due to the impact of the global economic recession that resulted in a slow-down in demand for new space. Although, in general, existing tenants have continued to renew their leases on expiry, there were a number of new developments that came on stream over the last nine months in the office and industrial sectors, which have proven difficult to let in the current economic environment. ACQUISITION OF CONTROLLING SHARE IN AUSTRALIAN PROPERTY TRUST After the year-end, on 30 July 2009, unitholders in Australia`s Stock Exchange-listed Orchard Industrial Property Fund (OIF) voted in favour of all the resolutions required to issue 50.1% of the units in OIF to Growthpoint for a cash consideration of AUD56 million and to internalise the management of the fund. OIF unitholders also approved a 13 for 10 rights offer at 16 Australian cents per unit, which closes on 15 September 2009, and has been underwritten by Growthpoint. Depending on the number of unitholders who follow their rights, Growthpoint will have a maximum further commitment of AUD144 million and will own between 60% and 78% of OIF. OIF was renamed Growthpoint Properties Australia and trades on the Australian Stock Exchange under the share code GOZ. Rationale for investing in Australia As a result of the global recession and scarcity of funding, the Australian listed property market has suffered major write-downs over the last year and a half, with most counters trading at market values significantly lower than net asset values. Despite weakening against the US dollar and other developed world currencies in the latter half of 2008, the South African Rand has also remained relatively strong compared to the Australian dollar over the same period. The above factors presented a unique opportunity for Growthpoint to make an investment in a quality property portfolio in a developed economy at a yield that is at least as attractive as similar investments in South Africa. When economic conditions return to normal, it is anticipated that there will be a re-rating of the Australian listed property market, which will be to the benefit of Growthpoint. Exposure to a developed world currency will also provide Rand-hedge benefits. Reasons for investing in OIF OIF owns 23 industrial properties, which are well located in the major metropolitan areas of Australia, valued at AU$643 million at 30 June 2009. 68% of net income is earned from properties leased to Woolworths, Australia`s number one retailer. The weighted lease expiry period is 11 years. The forecast distribution (which was reviewed by PWC Australia) to 30 June 2010 is expected to be 1.4 Australian cents per linked unit. The investment is not expected to have a material effect on Growthpoint`s distributions for the year to 30 June 2010. A key aspect of the transaction was the internalisation of management and a number of key staff from the existing external fund manager have been recruited to run the company. As and when opportunities are available, it is the intention to grow GOZ and diversify it by acquiring office and retail properties that fit Growthpoint`s investment criteria. RIGHTS OFFER In light of the potential investment in Australia and knowing that there is a R1,6 billion refinancing of the Growthpoint Series 3 securitisation coming up in November 2009, Growthpoint decided to strengthen its balance sheet and accordingly raised R1,7 billion through a partially underwritten rights issue in January 2009, which was oversubscribed. COMMENTARY ON RESULTS BASIS OF PREPARATION The financial statements are considered preliminary based on the JSE listing requirements and are summarised from a complete set of the group annual financial statements on which the auditors, KPMG Inc ., have expressed an unmodified audit opinion which is available for inspection at the registered office. These financial statements have been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards (IFRS), the presentation and disclosure requirements of IAS 34, Interim Financial Reporting, and the Companies Act of South Africa. The company`s accounting policies as set out in the audited financial statements for the year ended 30 June 2008 have been consistently applied. Investment property comprises land and buildings held to generate rental income over the long term. Should any properties no longer meet the group`s investment criteria and be sold, any profits or losses will be of a capital nature and will be taxed at rates applicable to capital gains. Deferred taxation on the revaluation of investment property is off-set against the deferred taxation asset that arises on the revaluation of the company`s issued debentures (excluding deferred taxation on intangible assets). REVENUE Apart from contractual rental escalations, the increase in gross revenue (18,4%) and property expenses (12,4%) was mainly due to acquisitions and new developments that contributed an additional R400 million to net property income for the year ended 30 June 2009. FINANCING COSTS Finance costs increased by R224 million (32,1%) from R697 million to R921 million. R174 million was due to higher average loan balances as Growthpoint`s previously large pipeline of developments and acquisitions was paid for. Capitalised interest reduced by R16 million as certain developments were completed and the balance was due to slightly (0.4%) higher average interest rates. FAIR VALUE ADJUSTMENTS The year-end revaluation of properties resulted in an upward revaluation of R189 million (0,6%) to R29,2 billion. From 30 June 2008 to 30 June 2009, there has been a reduction in long-term interest rates, resulting in a R1,4 billion increase in the fair value of borrowings and interest rate swaps for the current year. NON-CASH CHARGES Non-cash charges include amortisation of the intangible asset that arose in 2008 on the acquisition of the Property Services Businesses as well as adjustments to the carrying value of the Staff Incentive Scheme plan asset and plan liability. These are book entries that do not affect cash flow or distributable income. CAPITAL ITEMS AND TRADING PROFITS An underwriting commission of R40 million was paid to Investec Bank Ltd, together with other costs amounting to R4 million relating to the rights issue made in January 2009. Furthermore, expenses incurred to 30 June 2009 in respect of the acquisition of OIF amounted to R4 million which are also included in capital costs. During the year Growthpoint disposed of 44 residential units, situated in the Montclare Place building in Claremont, realising a trading profit of R13 million. The above costs and residential trading profit are disclosed as capital items and trading profits and are not included in distributable earnings. VACANCY LEVELS At 30 June 2009 Growthpoint`s vacancy levels, as a percentage of gross lettable area (GLA) were: Retail 3,2% (2008:2,8%) Office 8,9% (2008:4,9%) Industrial 4,4% (2008:2,1%) Total 5,4% (2008:2,9%) New developments acquired, where Growthpoint took on the letting risk, have contributed 1,2% of the 5,4% total vacancy. Since the last quarter of 2008, there has been a marked slow-down in economic activity and it is taking longer than anticipated to let vacant space. ACQUISITIONS AND DEVELOPMENTS During the year ended 30 June 2009, three properties in the office portfolio were acquired for an amount of R158,6 million at a weighted average initial yield of 8,9% (once fully let). A further three properties in the industrial portfolio were also acquired for R168,5 million at an average initial yield of 10,5% (once fully let). Various other smaller acquisitions totalling R68,2 million were made in the year. Expenditure on developments during the year ended 30 June 2009: Property Approved Spent to Spent to 30 June 30 June 2008 2009 Rm Rm Rm
100 Grayston Drive (Investec) extension 475,0 - 475,0 Montclare Place, Claremont 361,9 259,4 102,5 Constantia Office Park 172,4 148,5 23,9 11 Adderley 150,7 76,1 65,0 Growthpoint Industrial Estate (mini-units) 126,0 - 86,2 Lincoln on the Lake, Umhlanga 109,5 7,9 51,9 City Mall, Klerksdorp 76,4 22,7 53,7 Barloworld (Growthpoint Industrial Estate) 74,3 32,4 41,9 N1 City Hospital 73,4 16,6 56,8 Alberton City (35,7% share) 70,8 14,3 56,5 Grand Parade 68,4 32,0 30,4 Lakeside Mall (87,2% share) 55,8 5,3 40,7 Ebony Place 55,4 42,7 12,7 Knightsgate mini-units 34,0 19,9 14,1 Northgate (50% share) 32,5 15,7 16,8 Various other 476,4 41,4 376,3 Total 2 412,9 734,9 1 504,4 Sector Expected initial
yield % 100 Grayston Drive (Investec) extension Office 8,1 Montclare Place, Claremont Office 8,9 Constantia Office Park Office 10,0 11 Adderley Office 9,5 Growthpoint Industrial Estate (mini-units) Industrial 10,9 Lincoln on the Lake, Umhlanga Office 9,5 City Mall, Klerksdorp Retail 8,5 Barloworld (Growthpoint Industrial Estate) Industrial 9,8 N1 City Hospital Office 10,5 Alberton City (35,7% share) Retail 9,3 Grand Parade Retail 10,1 Lakeside Mall (87,2% share) Retail 11,2 Ebony Place Industrial 11,4 Knightsgate mini-units Industrial 10,8 Northgate (50% share) Retail 10,0 Various other Total The yield percentages mentioned above have not been reviewed or reported on by Growthpoint`s auditors. ACQUISITIONS AND DEVELOPMENTS IN PROGRESS At 30 June 2009 Growthpoint had entered into an agreement to acquire one industrial property in Stormill for a total cost of R50 million with a one year rental guarantee at an initial yield of 11,3%. Transfer of this property is expected by October 2009. The outstanding expenditure in respect of developments in progress reflected above, amounts to R173,6 million. DISPOSALS Five properties were disposed of in the current period for R122 million. Sale agreements have been entered into for the sale of a further six properties valued at R573,7 million which no longer meet Growthpoint`s investment criteria. BORROWINGS At 30 June 2009, the loan to value ratio (LTV) measured by dividing the nominal value of interest-bearing borrowings (net of cash) by the fair value of property assets including investment property reclassified as held for sale, was 32,2% (2008: 34,4%). It is expected that the LTV will increase to 37,8% once the OIF transaction has been finalised. Growthpoint held cash on short-term deposit at 30 June 2009 of R497 million (2008: R27 million). At 30 June 2009 108,4% of interest-bearing debt was fixed at a weighted average rate, including a margin, of 10,1% for a weighted average of 9,7 years. At the end of August 2009 after paying an estimated R1,2 billion for the investment in OIF, the percentage of fixed rate debt will reduce to 96,6%. SHARE AND DEBENTURE CAPITAL The authorised share capital is R100 000 000 divided into two billion ordinary shares of five cents each. Each ordinary share is linked to ten variable rate debentures of 250 cents each. In terms of the rights issue, 128 million new linked units were issued in January 2009. The ordinary shares and debentures trade as linked units on the JSE. In terms of the debenture trust deed, the interest payable on the debenture component of the linked unit is always 1 000 times greater than the dividend payable per ordinary share. AFTER BALANCE SHEET EVENT - ACQUISITION OF CONTROLLING INTEREST IN OIF As mentioned in the commentary above, Growthpoint acquired a controlling share in OIF after year-end. The estimated value of the assets and liabilities of OIF acquired (based on audited results, at 30 June 2009) are as follows: AU$`000 R million
Investment property 643 4 180 Trade and other receivables 22 143 Cash and cash equivalents 7 46 Interest-bearing borrowings (506) (3 289) Derivatives (7) (46) Trade and other payables (43) (280) 116 754 50,1% of net asset value obtained (refer assumptions below) 58 377 Consideration - financed by interest-bearing borrowings 56 364 Net asset value exceeding consideration 2 13 Assumptions used: The exchange rate used in the translation of the assets and liabilities acquired as well as the consideration to be paid was R6,50: AU$1. The purchase price allocation to determine the fair value of the assets and liabilities acquired must still be performed. PROSPECTS Growthpoint has a large, diversified, quality property portfolio and solid tenant base combined with conservative gearing policies and prudent financial management that should enable the company to continue achieving its mission of providing sustainable, growing income streams and long-term capital appreciation. Since the latter half of 2008, the impact of the global economic recession and financial crisis began to be felt quite markedly in South Africa and Growthpoint was not immune to this. However, it was mostly the impact of new developments that came on stream in the last nine months in weak economic conditions that has caused Growthpoint`s distributions to grow at a slower rate than what would otherwise have been the case. Growthpoint`s view is that economic activity will continue to be subdued for the next year until the effects of lower short-term interest rates and stable and slowly improving global economic conditions bring some relief. This, together with the impact of anticipated higher margins on the refinancing of debt and certain non-interest-bearing liabilities becoming repayable, could result in distributions for the year to 30 June 2010 not growing at the same rate as in 2009. However, provided that no major unforeseen events occur, we expect to continue showing positive growth in distributions in the next financial year. This profit forecast has not been reviewed or reported on by Growthpoint`s auditors. CASH DISTRIBUTION WITH THE ELECTION TO RE-INVEST THE CASH DISTRIBUTION IN RETURN FOR GROWTHPOINT LINKED UNITS Notice is hereby given of final dividend declaration number 46 of 0,058 cents and debenture interest payment number 46 of 58,242 cents per linked unit totalling 58,3 cents per linked unit for the SIX months ended 30 June 2009, bringing the total distribution for the year ended 30 June 2009 to 114,6 cents per linked unit. Linked unitholders will be entitled, to elect to re-invest the Cash Distribution in return for linked units ("Linked Unit Alternative"), failing which they will receive the Cash Distribution in respect of all or part of their linked unitholding. The number of linked units to which linked unitholders wishing to participate in the Linked Unit Alternative will become entitled, will be included in the circular to be posted to unit holders referred to below. The last day to trade to participate in the Cash Distribution or the Linked Unit Alternative will be Friday, 11 September 2009. Growthpoint linked units will trade "ex" the entitlement with effect from the commencement of business on Monday, 14 September 2009. Subject to the approval of the JSE, a listing of the maximum number of new linked units to be issued pursuant to the Linked Unit Alternative will commence on Monday, 14 September 2009. Trading in the Strate environment does not permit fractions and fractional entitlements. Accordingly, where a linked unitholder`s entitlement to new linked units calculated in accordance with the above ratio gives rise to a fraction of a new linked unit, such fraction will be rounded up to the nearest whole number, where the fraction is greater than or equal to 0,5 and rounded down to the nearest whole number, where the fraction is smaller than 0,5. A circular and form of election dealing with the Cash Distribution and Linked Unit Alternative, including the basis for calculating the linked unit ratio, which ratio will be announced on Friday, 4 September 2009, will be posted to linked unitholders who have not dematerialised their linked units ("certificated linked unitholders") on Friday, 28 August 2009. Forms of election in respect of certificated linked unitholders who wish to elect to participate in the Linked Unit Alternative must be received by the transfer secretaries by no later than 12h00 on Friday, 18 September 2009. Linked unitholders who have dematerialised their linked units are required to notify their duly appointed Central Securities Depository Participant ("CSDP") or broker of their election in the manner and time stipulated in the custody agreement governing the relationship between the linked unitholder and their CSDP or broker. In respect of dematerialised linked unitholders, safe custody accounts with the CSDP or broker will be updated with the entitlement in respect of the new linked units and/or payments will be credited to their CSDP or broker accounts on Monday, 21 September 2009. Certificated linked units or cheques will be posted to certificated linked unitholders at their risk on Monday, 21 September 2009. A further announcement will be published on SENS and in the press on or about Tuesday, 22 September 2009, detailing the results of the Cash Distribution and Linked Unit Alternative. Summary of the salient dates relating to the Cash Distribution and Linked Unit Alternative are as follows: 2009 Circular and form of election posted to linked unitholders Friday, 28 August Announcement of linked unit ratio Friday, 4 September Last day to trade in order to participate in the Cash Distribution and Linked Unit Alternative Friday, 11 September Linked units to trade ex distribution Monday, 14 September Listing of maximum number of Linked Unit Alternative linked units commences on the JSE Monday, 14 September Last day to elect to receive a Linked Unit Alternative and/or to receive the Cash Distribution Friday, 18 September Record date Friday, 18 September Announcement of results of Cash Distribution and Linked Unit Alternative on SENS Monday, 21 September Linked unit certificates and Cash Distribution posted to certificated linked unitholders Monday, 21 September Accounts credited by CSDP or broker to dematerialised linked unitholders Monday, 21 September Announcement of results of election of Cash Distribution or Linked Unit Alternative in the press Tuesday, 22 September Adjustment to linked units listed on or about Wednesday, 23 September Linked units may not be dematerialised or rematerialised between Monday, 14 September 2009 and Friday, 18 September 2009, both days inclusive. The above dates and times are subject to amendment. Any such amendment will be released on SENS and published in the press. By order of the Board Growthpoint Properties Limited 25 August 2009 Directors: JF Marais (Chairman), HSP Mashaba (Deputy Chairman), LN Sasse* (Chief Executive Officer), EK de Klerk, MG Diliza, PH Fechter, JC Hayward, HS Herman, R Moonsamy, SM Snowball, CG Steyn, JHN Strydom, FJ Visser * Executive Executive, appointed to the board on 26 August 2008. Growthpoint Properties Limited: (Incorporated in the Republic of South Africa) (Registration number 1987/004988/06) Share code GRT ISIN ZAE 000037669 Transfer secretary: Computershare Investor Services (Pty) Limited (Registration number 2004/003647/07) Ground Floor, 70 Marshall Street, Johannesburg, 2001 PO Box 61051, Marshalltown, 2107 Registered office: The Place, 1 Sandton Drive , Sandton, 2196 PO Box 78949, Sandton, 2146 Sponsor: Investec Bank Limited 100 Grayston Drive, Sandown, Sandton, 2196 PO Box 78949, Sandton, 2146 Auditors: KPMG Inc. www.growthpoint.co.za Date: 26/08/2009 10:00:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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