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Reviewed condensed consolidated interim financial results for the six months ending 28 February 2014
OCTODEC INVESTMENTS LIMITED
("Octodec" or "the group" or "the company")
(Incorporated in the Republic of South Africa)
(Registration number 1956/002868/06)
Share code: OCT ISIN: ZAE000005104
REIT status approved
REVIEWED CONDENSED CONSOLIDATED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDING 28 FEBRUARY 2014
- Distribution up by 12,6% to 88,60 cents per linked unit
- Weighted average increase in distributable income of 17,6%
- Total investments of R4,3 billion
- Weighted average cost of debt reduces to 8,4% per annum
- Obtained REIT status effective from 1 September 2013
DIRECTORS' COMMENTARY
Introduction
Octodec is a Real Estate Investment Trust ("REIT") listed in the "Industrial and Office REITS" subsector of the JSE Limited ("JSE"). Octodec's application for REIT
status was granted with effect from 1 September 2013. Octodec invests in the retail, industrial and office property sectors and has a growing residential component
in its portfolio. All rental income received by the group, less operating costs, administration costs and interest on debt, is distributed bi-annually. The group does
not distribute capital profits.
Review of results
Trading conditions and consumer confidence remained subdued during the financial period. The property portfolio continued to deliver strong growth in earnings with
rental income increasing following a number of successful upgrades of properties and a proactive approach to letting.
The total distribution per linked unit for the six months of 88,60 cents per linked unit (2013: 78,70 cents) represents an increase of 12,6% (2013: 10,5%) on that paid
in the comparative six-month period.
Rental income and net rental income increased by 8,2% (2013: 13,9%) and 12,2% (2013: 11,0%) respectively compared to the prior comparative six-month period. The
increase in revenue was mainly due to contractual escalations, improved letting and an increase in the recovery of utility and assessment rate charges. The six-month
period saw limited improvement in the office and industrial rental markets and a slight increase in vacancies. One of the primary objectives continued to be the
improvement of the quality of the properties in order to attract new tenants. The performance of Killarney Mall, the company's flagship shopping centre, was extremely
pleasing. The vacancies at Killarney Mall during the financial period were maintained at below 2% of gross lettable area ("GLA"). Despite rapidly escalating utility
charges, the percentage of cost recovery in respect of electricity charges improved during the period due to improved efficiencies and increased focus
on energy management initiatives. Bad debt write-offs and provisions during the period were at 1% (2013: 1%) of total tenant income. Arrears and doubtful debt
provisions remain at acceptable levels and no significant deterioration is anticipated.
Property and investment portfolio
Octodec completed three major projects during the period and two others are under construction. The total cost of these projects is approximately R189,4 million of
which an amount of R110,9 million had already been spent by 28 February 2014.
Details of these projects are:
- The upgrade of Time Place, a residential property which is situated in the Pretoria CBD, was completed in September 2013. The total cost of the project was R9,7 million.
- The redevelopment of Medical City, a residential property situated in the Johannesburg CBD. The total cost of the project was R42,9 million. The offices were converted
into a college with residential accommodation and were occupied in November 2013.
- The upgrade of the residential units at Castle Mansions and the construction of an additional 12 residential units. The property is situated in the Johannesburg CBD and
the project was completed in December 2013 at a cost of R14, 3 million.
- The upgrade of Essenby flats, situated in the Johannesburg CBD. The upgrade will be completed in May 2014 at a total cost of R16,1 million.
- Octodec is currently well advanced with the redevelopment of Bosman Place which is situated in the Johannesburg CBD and has an estimated completion date of March
2015. The property consists of a retail component and 9 779 m2 of vacant offices. The offices will be converted into 225 residential units at a cost of approximately
R106,4 million. The fully let initial yield is expected to be 8,4%.
IPS Investments Proprietary Limited ("IPS")
During the year Octodec's associate company IPS repurchased City Property Administration Proprietary Limited's ("City Property") shares and shareholders loan account
in IPS ("City Property's interest in IPS") for a cash consideration of R127,5 million and R48,1 million respectively. Prior to the repurchase Premium Properties Limited
("Premium") and Octodec each held 40% of the issued share capital of IPS and City Property held the remaining 20%. Following the repurchase, Octodec's and Premium's
shareholdings in IPS increased to 50% each. IPS also acquired the balance of the 50% shareholding in Vuselela Investments Proprietary Limited ("Vuselela") from its
co-shareholder.
Pursuant to the repurchase, Octodec issued 9 122 981 linked units to City Property in exchange for the equivalent cash consideration of R175,6 million equating to
R19,25 per Octodec linked unit.
Octodec's investment in IPS provided strong growth with profits earned from its associate company, excluding fair value gains, increasing to R19,2 million. This is an
increase of 62,3% on the prior period.
The performance of IPS was positively impacted by the improved occupancy levels achieved during the period at the mixed-use developments of Kempton Place and Tali's
Place. An increase in interest income was recorded as a result of increased funding to IPS to fund further investments including the purchase of the 50% interest from
its co-shareholder in Vuselela and City Property's interest in IPS. The construction of Jeff's Place, a greenfield residential development situated in the Pretoria CBD,
commenced in February 2012. The date of completion was March 2014. The total cost of the project was R141,4 million and it is anticipated that this will yield an
initial return of 9,2% once fully let.
Vacancies
Vacancies in the Octodec portfolio at 28 February 2014, including properties held for redevelopment, amounted to 15,4% (2013: 13,6%) of total lettable area. Details
of these vacancies are set out in the table below.
Properties
Total held for
lettable Total redevelop- Core
area vacancies ment vacancies
m2 % % %
28 February 2014
Offices 128 341 7,1 (4,9) 2,2
Retail - shops 139 488 1,2 (0,3) 0,9
Retail - shopping centres 84 111 0,3 - 0,3
Industrial 196 104 5,3 - 5,3
Residential 32 709 1,5 (1,4) 0,1
Total 580 753 15,4 (6,6) 8,8
31 August 2013
Offices 127 485 6,5 (3,3) 3,2
Retail - shops 141 355 0,7 (0,1) 0,6
Retail - shopping centres 85 168 0,6 - 0,6
Industrial 193 725 4,1 (0,1) 4,0
Residential 34 497 1,7 (1,7) -
Total 582 230 13,6 (5,2) 8,4
Most of the properties remained fully let. As anticipated, a number of properties under development or those which were recently upgraded, had vacancies. In
recent years certain properties, for example Bosman Building, were acquired by Octodec with large vacancies and where no or little consideration was
paid in respect of the vacant space which offered redevelopment opportunities. As the opportunities arise, the value of these vacancies is being realised.
Octodec was successful in letting a number of properties that had been vacant for a considerable period. The residential vacancies consist, as expected, of
vacant units at Essenby, Time Place and Castle Mansions which are currently undergoing upgrades.
Borrowings
Octodec's ratio of loans to value of its investment portfolio at period-end was 33,8% against 35,9% at 31 August 2013.
Interest rates in respect of 57,6% of borrowings at 28 February 2014 have been hedged, maturing at various dates in 2017 and 2018. The average weighted interest
rate of all borrowings is 8,4% per annum, with unutilised banking facilities in an amount in excess of R228 million. Details of borrowings are set out in the
table below:
Nominal Interest
amount rate
R'000 %
Fixed rate borrowings expiry
April 2018 100 000 12,06
October 2018 75 000 11,72
175 000 11,91
Swap maturity
February 2017 150 000 7,68
August 2017 200 000 8,96
September 2017 50 000 9,31
January 2018 50 000 9,43
April 2018 100 000 5,68
May 2018 50 000 10,13
August 2018 50 000 9,40
650 000 8,35
Total hedged borrowings 825 000 9,10
Variable rate borrowings 607 096 7,50
Total borrowings 1 432 096 8,40
Revaluation of property portfolio
It is the group's policy to perform directors' valuations of all the properties at the interim stage and at year-end.
At 28 February 2014 the entire portfolio was valued by independent external registered valuers in anticipation of the proposed merger of Octodec and Premium. The
internal and external valuations are based on the income capitalisation method which is consistent with the basis used in prior years.
The internal valuation of the portfolio of R3,4 billion represents an increase in the valuation amounting to R57,5 million or 1,8% for the six-month period ended
28 February 2014. The valuation of the portfolio by the external valuers amounts to R3,3 billion, which is 2,0% less than the directors' valuation.
Net asset value ("NAV")
NAV increased by 1,9% to 2 275 cents per linked unit.
Changes to the directorate
Mr Gerard Kemp (58) was appointed as an independent non-executive director, on 1 October 2013. Gerard will also serve on the audit, risk, social, ethics & remuneration
and nominations committees. Gerard brings to the board a wealth of knowledge and experience in the areas of corporate finance, black economic empowerment
and labour relations.
Cautionary
Linked unitholders are referred to the joint announcement released on SENS on 7 April 2014 by Octodec and Premium and are reminded that the company is still trading
under cautionary in respect of the proposed merger with Premium.
Prospects
Octodec is considering a number of redevelopment opportunities for certain existing properties which will enhance the quality of the property portfolio and result in
sustainable growing distributions in the future. Growth in the local economy is expected to remain subdued. Barring unforeseen events, current indications are that
the distribution for the next six-month period should be in line with the distribution for the first six-month period. This represents growth in distributions per
linked unit of approximately 14% for the full financial year.
The abovementioned information has not been reviewed nor reported on by the company's auditors.
DECLARATION OF DIVIDEND 48 ("the distribution")
Notice is hereby given that dividend number 48 of 88,60 cents (2013: 78,70 cents) per linked unit (out of income reserves) has been declared for the period
1 September 2013 to 28 February 2014, payable to linked unitholders recorded in the register on Friday, 30 May 2014.
Salient dates relating to the dividend:
Last date to trade "CUM" distribution Friday, 23 May 2014
Commence trading "EX" distribution Monday, 26 May 2014
Record date Friday, 30 May 2014
Payment date Monday, 2 June 2014
No dematerialisation or rematerialisation of linked unit certificates may take place between Monday, 26 May 2014 and Friday, 30 May 2014, both days inclusive.
As Octodec has REIT status, linked unitholders are advised that the distribution meets the requirements of a "qualifying distribution" for the purposes of section
25BB of the Income Tax Act, No 58 of 1962 ("Income Tax Act"). The distribution to Octodec linked units will be deemed to be dividends, for South African tax purposes,
in terms of section 25BB of the Income Tax Act.
Tax implications for South African tax residents
Distributions received by or accrued to South African tax residents must be included in the gross income of such linked unitholders and are not exempt from income tax
in terms of the exclusion to the general dividend exemption contained in section 10(1)(k)(i)(aa) of the Income Tax Act, because they are dividends distributed by a
REIT. These distributions are however exempt from dividend withholding tax ("dividend tax") in the hands of South African tax resident linked unitholders provided
that the South African tax resident linked unitholders have provided the following forms to the Central Securities Depository Participant ("CSDP") or broker, as the
case may be, in respect of uncertificated linked units, or the transfer secretaries, in respect of certificated linked units:
- a declaration that the distribution is exempt from dividend tax; and
- a written undertaking to inform the CSDP, broker or transfer secretaries, as the case may be, should the circumstances affecting the exemption change or the
beneficial owner cease to be the beneficial owner,
both in the form prescribed by the Commissioner for the South African Revenue Service.
Octodec linked unitholders are advised to contact their CSDP or broker, as the case may be, to arrange for the abovementioned documents to be submitted prior to the
payment of the distribution.
Tax implications for non-resident linked unitholders
Distributions received by non-resident linked unitholders will not be taxable as income and instead will be treated as ordinary dividends which are exempt from income
tax in terms of the general dividend exemption section 10(1)(k)(i) of the Income Tax Act. It should be noted that up to 31 December 2013 distributions received by
non-residents from a REIT were not subject to dividend tax. With effect from 1 January 2014, any distribution received by a non-resident from a REIT will be subject
to dividend tax at 15%, unless the rate is reduced in terms of any applicable agreement for the avoidance of double taxation ("DTA") between South Africa and the
country of residence of the non-resident linked unitholder. Assuming dividend tax will be withheld at a rate of 15%, the net amount due to non-resident linked
unitholders is 75,31 cents per share. A reduced dividend withholding rate in terms of the applicable DTA may only be relied on if the non-resident linked unitholder
has provided the following forms to their CSDP or broker, as the case may be, in respect of uncertificated linked units, or the transfer secretaries, in respect of
certificated linked units:
- a declaration that the dividend is subject to a reduced rate as a result of the application of the DTA; and
- a written undertaking to inform the CSDP, broker or the transfer secretaries, as the case may be, should the circumstances affecting the reduced rate change or the
beneficial owner cease to be the beneficial owner,
both in the form prescribed by the Commissioner of the South African Revenue Services.
If applicable, Non-resident linked unitholders are advised to contact the CSDP, broker or the transfer secretaries, as the case may be, to arrange for the
abovementioned documents to be submitted prior to payment of the distribution if such documents have not already been submitted.
Shareholders are encouraged to consult with their professional advisors should they be in any doubt as to the appropriate action to take.
The number of linked units in issue at the date of this declaration is 117 347 898 and the company's tax reference number is 9925/033/71/5.
By order of the board
S WAPNICK JP WAPNICK
Chairman Managing director
6 May 2014
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Reviewed Unaudited Audited
Six months Six months Year to
% 28 February 28 February 31 August
R'000 Change 2014 2013 2013
Revenue 269 256 245 975 506 670
Earned on contractual basis 8,2 267 391 247 059 505 732
Straight-line lease adjustment 1 865 (1 084) 938
Operating costs (128 316) (123 150) (254 820)
Net property income 140 940 122 825 251 850
Earned on contractual basis 12,2 139 075 123 909 250 912
Straight-line lease adjustment 1 865 (1 084) 938
Administrative costs (14 196) (12 872) (25 290)
Profit from operations 15,3 126 744 109 953 226 560
Amortisation of deemed debenture premium 11 632 10 311 21 054
Fair value adjustments of investment properties 57 530 92 490 131 501
Fair value adjustments of interest rate derivatives 6 740 4 081 35 214
Profit from ordinary activities before finance costs 202 646 216 835 14 329
Profit on sale of investment property 111 15 15
Investment income 58 657 36 396 77 781
Interest received 1 101 785 1 584
Listed investment 18 919 15 114 29 670
Associate 38 637 20 497 46 527
Profit from ordinary activities before finance costs 261 414 253 246 492 125
Finance costs 12,8 (60 189) (53 380) (110 638)
Interest on borrowings (60 787) (54 701) (112 461)
Interest capitalised 598 1 321 1 823
Profit before debenture interest 0,7 201 225 199 866 381 487
Debenture interest 22,1 (103 454) (84 751) (169 718)
Profit before taxation 97 771 115 115 211 769
Taxation charge 7 926 (15 808) 171 690
Deferred taxation 7 834 (15 696) 172 004
Normal taxation 92 (112) (314)
Profit for the period 105 697 99 307 383 459
Other comprehensive income for the period
Fair value adjustment of listed investment (16 094) 25 168 18 792
Total comprehensive income for the period attributable to
equity holders 89 603 124 475 402 251
Weighted linked units in issue ('000) 112 207 108 225 108 225
Linked units in issue ('000) 117 348 108 225 108 225
Basic earnings per share (cents) 2,7 94,2 91,8 354,3
Fully diluted earnings per share (cents) (1,8) 90,1 91,8 354,3
Basic earnings per linked unit (cents) 9,6 186,4 170,1 511,1
Fully diluted earnings per linked unit (cents) 4,8 178,2 170,1 511,1
Distribution per linked unit (cents)
Dividends 0,44 0,39 0,78
Interest 88,16 78,31 156,82
Total 12,6 88,60 78,70 157,60
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Reviewed Unaudited Audited
Six months Six months Year to
28 February 28 February 31 August
R'000 2014 2013 2013
CASH FLOW FROM OPERATING ACTIVITIES
Net rental income from properties 124 879 111 037 225 622
Adjustment for:
Depreciation and amortisation 6 210 6 859 12 059
Working capital change 14 451 (1 810) (5 373)
Cash generated from operations 145 540 116 086 232 308
Investment income 36 961 18 650 57 217
Finance costs (60 189) (53 380) (110 638)
Taxation paid 124 (423) (99)
Distribution to linked unitholders paid (85 389) (71 537) (156 710)
Net cash inflow from operating activities 37 047 9 396 22 078
CASH FLOW FROM INVESTING ACTIVITIES
Investing activities (221 324) (57 126) (279 863)
Proceeds from disposal of investment properties 2 200 6 650 6 650
Net cash outflow used in investing activities (219 124) (50 476) (273 213)
CASH FLOW FROM FINANCING ACTIVITIES
Issue of new units 174 528 - -
Increase in interest-bearing borrowings 12 979 57 989 270 463
Net cash generated from financing activities 187 507 57 989 270 463
NET INCREASE IN CASH AND CASH EQUIVALENTS 5 430 16 909 19 328
Cash and cash equivalents at beginning of year (12 763) (32 091) (32 091)
Cash and cash equivalents at end of period (7 333) (15 182) (12 763)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Non-dis-
Share tributable Retained
R'000 capital reserves earnings Total
Balances at 31 August 2012 102 645 1 236 372 56 268 1 395 285
Total comprehensive income for the year - - 402 251 402 251
Transfer to capital - deemed debenture premium 21 054 - (21 054) -
Dividends paid - - (779) (779)
Adjustment to valuation of listed investment,
net of deferred tax - 18 792 (18 792) -
Profit on sale of investment properties - 15 (15) -
Fair value adjustments
Investment properties, net of deferred tax - 333 171 (333 171) -
Associate, net of deferred tax - 21 797 (21 797) -
Interest rate derivatives, net of deferred tax - 25 354 (25 354) -
Balances at 31 August 2013 123 699 1 635 501 37 557 1 796 757
Total comprehensive income for the year - - 89 603 89 603
Issue of new units 862 - 862
Transfer to capital - deemed debenture premium 11 632 - (11 632) -
Dividends paid - - (422) (422)
Adjustment to valuation of listed investment,
net of deferred tax - (16 094) 16 094 -
Profit on sale of investment properties - 111 (111) -
Fair value adjustments
Investment properties - 57 530 (57 530) -
Associate - 19 447 (19 447) -
Interest rate derivatives - 6 740 (6 740) -
Balances at 28 February 2014 136 193 1 703 235 47 372 1 886 800
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Reviewed Audited
Six months Year to
28 February 31 August
R'000 2014 2013
ASSETS
Non-current assets 4 256 624 3 971 862
Investment properties 3 285 153 3 168 970
Plant and equipment 4 860 6 525
Operating lease assets 47 591 45 726
Lease costs capitalised 32 352 35 565
Listed investment 349 725 365 819
Investment in associate 528 210 347 264
Derivative financial instruments 8 733 1 993
Current assets 53 825 50 982
Total assets 4 310 449 4 022 844
EQUITY AND LIABILITIES
Share capital and reserves 1 886 800 1 796 757
Share capital and premium 136 193 123 699
Non-distributable reserves 1 703 235 1 635 501
Distributable reserves 47 372 37 557
Non-current liabilities 1 921 718 1 590 905
Debenture capital and premium 782 285 620 251
Interest-bearing borrowings 1 132 330 955 717
Deferred taxation 7 103 14 937
Current liabilities 501 931 635 182
Interest-bearing borrowings 307 992 471 626
Non-interest-bearing 90 485 78 589
Linked unitholders for distribution 103 454 84 967
Total equity and liabilities 4 310 449 4 022 844
Linked units in issue ('000) 117 348 108 225
Net asset value per linked unit (cents) 2 275 2 233
Loan to investment value ratio (%) 33,8 35,9
DISTRIBUTABLE EARNINGS
Reviewed Unaudited Audited
Six months Six months Year to
% 28 February 28 February 31 August
R'000 Change 2014 2013 2013
Revenue
Earned on contractual basis 8,2 267 391 247 059 505 732
Operating costs (128 316) (123 150) (254 820)
Net rental income from properties 12,2 139 075 123 909 250 912
Administrative costs (14 196) (12 872) (25 290)
Operating profit 12,5 124 879 111 037 225 622
Investment income
Interest received 1 101 786 1 584
Listed investment 18 919 15 114 29 670
Associate 19 190 11 821 24 730
Distributable profit before finance costs 18,3 164 089 138 758 281 606
Finance costs 12,8 (60 189) (53 380) (110 638)
Distributable income before taxation 21,7 103 900 85 378 170 968
Taxation charge 92 (112) (314)
Unitholders' distributable earnings 22,0 103 992 85 266 170 654
Linked units in issue ('000) 117 348 108 225 108 225
Distributable earnings per linked unit - weighted (cents) 17,6 92,7 78,8 157,7
Distribution per linked unit (cents) 12,6 88,6 78,7 157,6
RECONCILIATION - EARNINGS TO DISTRIBUTABLE EARNINGS
Reviewed Unaudited Audited
Six months Six months Year to
28 February 28 February 31 August
R'000 2014 2013 2013
Total comprehensive income attributable to equity holders 89 603 124 475 402 251
Amortisation of deemed debenture premium (11 632) (10 311) (21 054)
Profit on sale of investment properties (111) (15) (15)
Equity reserves
Associate (19 447) (8 676) (21 797)
Fair value adjustments
Listed investment 16 094 (25 168) (18 792)
Investment properties (57 530) (92 490) (131 501)
Deferred tax - 17 204 (201 670)
Headline earnings before debenture interest 16 978 5 019 7 422
Debenture interest 103 454 84 751 169 718
Headline earnings attributable to linked unitholders 120 432 89 770 177 140
Straight-line lease adjustment (1 865) 780 (675)
Fair value adjustments of interest rate derivatives (6 740) (2 937) (25 354)
Deferred taxation adjustments (7 834) (2 347) 19 543
Distributable earnings attributable to linked unitholders 103 992 85 266 170 654
Headline earnings per linked unit (cents) 107,3 82,9 163,7
SEGMENTAL INFORMATION
The group earns revenue in the form of property rentals. On a primary basis the group is organised into five major operating segments:
Six months Six months
28 February 28 February
2014 2013
Rental income by segment: R'000 % R'000 %
Offices 36 619 18,8 30 522 17,0
Retail 45 878 23,5 42 769 23,8
Shopping centres 63 356 32,5 55 653 30,9
Industrial 36 865 18,9 35 874 19,9
Residential 12 438 6,4 15 077 8,4
Total rental income 195 156 100,0 179 895 100,0
Recoveries 74 100 67 164
Revenue 269 256 247 059
Further segment results cannot be allocated on a reasonable basis due to the "mixed use" of certain of the properties. It is the company's philosophy to invest
predominantly in properties situated in the Gauteng area, therefore the company has not reported on a geographical basis.
NOTES TO THE FINANCIAL STATEMENTS
Basis of preparation: These reviewed condensed consolidated interim financial statements for the six months ended 28 February 2014 are prepared in accordance with
International Financial Reporting Standard, (IAS) 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee
and Financial Pronouncements as issued by Financial Reporting Standards Council and the requirements of the Companies Act of South Africa.
The accounting policies applied in the preparation of these interim financial statements are in terms of IFRS and are consistent with those applied in the previous annual
financial statements. The group adopted the new, revised or amended accounting pronouncements as issued by the International Accounting Standards Board which were
effective and applicable to the group from 1 September 2013, none of which had any material impact on the group's financial results.
These interim results have been prepared under the historical cost convention except for investment properties which are measured at fair value and certain financial
instruments which are measured at either fair value or amortised cost. The fair value of investment properties is determined by directors with reference to
market-related information while investment in associates and other financial liabilities are valued with reference to market-related information and valuations as
appropriate. Financial instruments measured at fair value include the listed investment (level 1 measurement using the quoted market price) and derivatives
(level 2 measurement using information based indirectly on quoted prices). There have been no material changes in judgements or estimates of amounts reported in
previous reporting periods.
These condensed consolidated interim financial statements were prepared under the supervision of Mr AK Stein (CA)SA, in his capacity as group financial director.
Related party: City Property Administration Proprietary Limited is responsible for the property and asset management of the group.
Subsequent events: There have been no subsequent events that require reporting.
Commitments: Octodec has capital commitments in an amount of R145,9 million relating to various redevelopments of properties.
Contingent liability: The company has issued guarantees of R8,0 million and R0,6 million to the Tshwane Metropolitan Municipality and City Power - Johannesburg
respectively, for the provision of services to its subsidiaries. The company has provided a suretyship to Nedbank Property Finance in favour of its 50% held associate
company, IPS Investments Proprietary Limited ("IPS"). At 28 February 2014, the suretyship amounted to R224,2 million.
Auditor's review: The financial information has been reviewed by the company's auditors, Deloitte & Touche, in terms of ISRE 2410: Review of Interim Financial
Information Performed by the Independent Auditor of the Entity. ISRE 2410 requires the auditor to conclude whether anything has come to their attention that causes
them to believe that the interim financial statements are not prepared in all material respects in accordance with the applicable financial reporting framework. The
auditor's unmodified review report is available for inspection at the company's registered office. The auditor's review report does not necessarily report on all of
the information contained in this announcement. Shareholders are therefore advised that in order to obtain a full understanding of the nature of the auditor's
engagement they should obtain a copy of that report together with the accompanying financial information from the issuer's registered office.
OCTODEC INVESTMENTS LIMITED ("Octodec" or "the group" or "the company")
(Incorporated in the Republic of South Africa) (Registration number 1956/002868/06), Share code: OCT, ISIN: ZAE000005104, REIT status approved
Directors: S Wapnick# (Chairman), JP Wapnick* (Managing), AK Stein** (Financial), MZ Pollack#, DP Cohen+, PJ Strydom^, GH Kemp^
* Executive director ^ Independent non-executive director # Non-executive director + Lead independent non-executive director
Registered office: CPA House, 101 Du Toit Street, Pretoria, 0002, PO Box 15, Pretoria, 0001, Tel: (012) 319 8781 Fax: (012) 319 8812
Sponsor: Nedbank Capital
Transfer secretaries: Computershare Investor Services Proprietary Limited (Reg. No: 2004/003647/07), 70 Marshall Street, Johannesburg, 2001, PO Box 61051,
Marshalltown, 2107, Tel: (011) 370 7700 Fax: (011) 688 7712
Property administrator, asset manager and company secretary: City Property Administration Proprietary Limited, email: octodec@cityprop.co.za
www.octodec.co.za
Date: 06/05/2014 01:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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