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INVESTEC AUSTRALIA PROPERTY FUND - Reviewed preliminary condensed consolidated financial results for the year ended 31 March 2015

Release Date: 21/05/2015 07:51
Code(s): IAP     PDF:  
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Reviewed preliminary condensed consolidated financial results for the year ended 31 March 2015

Investec Australia Property Fund                                   
Registered in Australia in terms of ASIC (ARSN 162 067 736)
Registered in terms of the Collective Investment Schemes           
Control Act No. 45 of 2003                                         
Share code: IAP                                                    
ISIN: AU60INL00018 

Investec Australia Property Fund 2015

Reviewed preliminary condensed consolidated financial results
for the year ended 31 March 2015

Successful execution of strategy outlined on listing

Highlights

Final distribution of
4.15cpu pre WHT
9.1% annualised growth

Full year distribution of
8.18cpu pre WHT
7.6% annualised growth

Portfolio growth of 178%
2.8x growth since listing

AUD156mn (77%)
of rights offer capital
deployed in six months –
strongly acquisitive in
very competitive market

Fund geared at 27%*
Geared growth effect
materialised

Strong underlying
property fundamentals
6.4 years WALE
1.3% vacancy

Quality tenant base supports
sustainable earnings
98.7% leased

9.7%** NAV growth
since listing – driven
by underlying property
performance

Historically low funding
rates locked in
4.15% all in funding rate
and 100% hedged

FY16 guidance
10% to 12%
growth pre WHT

*  Post Glendenning acquisition (valued at AUD19.2mm).
** Pre-transaction costs.

Operational KPIs*

Number of properties
2015             2014
17               9

Property portfolio
2015             2014
AUD361mn         AUD154mn

Gross lettable area
2015             2014
125 118m(2)      54 249m(2)

Weighted average lease expiry
(by income)
2015             2014
6.4 years        7.3 years

Weighted average escalations
2015             2014
3.4%             3.5%

Occupancy rate
2015             2014
98.7%            99.5%

Units in issue
2015             2014
246 581 298      134 685 000

Financial KPIs

Distribution per unit pre WHT
2015             2014
8.18             7.60

Distribution per unit post WHT
2015             2014
7.88             7.10**

Cost to income ratio
2015             2014
13.2%            14.8%

Gearing
2015             2014
27%^             14%

Funding costs
2015             2014
4.15%            4.69%

Weighted average debt expiry
2015             2014
4.8 years        2.0 years

Weighted average swap expiry
2015             2014
5.5 years        1.9 years

Hedged position
2015             2014
100%             100%

*    Post Glendenning acquisition (valued at AUD19.2 mn)
**   Annualised
^    Gearing post the distribution in June will be approximately 30%

Condensed consolidated statement of profit or loss and other comprehensive income

                                                                                                    Audited   
                                                                                                period from   
                                                                                   Reviewed     12 December   
                                                                                 year ended         2012 to   
AUD'000                                                               Notes   31 March 2015   31 March 2014   
Revenue, excluding straight-line rental revenue adjustment                           22 180          10 129   
Straight-line rental revenue adjustment                                               2 040           1 051   
Revenue                                                                              24 220          11 180   
Property expenses                                                                   (2 867)         (1 498)   
Net property income                                                                  21 353           9 682   
Fair value adjustments – investment property                              2           2 051            (18)   
Other operating expenses                                                            (2 500)           (941)   
Operating profit                                                                     20 904           8 723   
Finance costs                                                                       (4 803)         (1 388)   
Finance income                                                                          195             152   
Other income                                                                             46               6   
Total comprehensive income and profit for the period                                 16 342           7 493   
Number of units                                                                                               
Units in issue at the end of the period                                             246 581         134 685   
Weighted average number of units in issue for the period                            190 633          57 214   
Basic and diluted earnings per unit (cents)                               3            8.84           13.10   

Condensed consolidated statement of financial position

                                                                                   Reviewed         Audited   
AUD'000                                                                Note   31 March 2015   31 March 2014   
ASSETS                                                                                                        
Non-current assets                                                                  342 130         154 381   
Investment property                                                                 342 130         154 364   
Financial instruments held at fair value                                                  –              17   
Current assets                                                                        3 609           6 657   
Cash and cash equivalents                                                             2 361           6 370   
Trade and other receivables                                                           1 248             287   
Total assets                                                                        345 739         161 038   
EQUITY AND LIABILITIES                                                                                        
Unitholders' interest                                                               248 704         132 058   
Contributed equity                                                                  246 496         131 025   
Retained earnings                                                                     2 208           1 033   
Total unitholders' interest                                                         248 704         132 058   
Non-current liabilities                                                              81 652          22 185   
Long-term borrowings                                                                 78 752          22 185   
Financial instruments held at fair value                                  4           2 900               –   
Current liabilities                                                                  15 383           6 795   
Trade and other payables                                                              5 157           2 193   
Distributions payable                                                                10 226           4 602   
Total equity and liabilities                                                        345 739         161 038   
Units in issue                                                                      246 581         134 685   
Net asset value per unit (cents)                                                     100.86           98.05   

Condensed consolidated statement of cash flows

                                                                                                    Audited   
                                                                                                period from   
                                                                                   Reviewed     12 December   
                                                                                 year ended         2012 to   
AUD'000                                                                       31 March 2015   31 March 2014   
Cash generated from operations                                                       18 832           9 543   
Finance income received                                                                 195             135   
Finance costs paid                                                                  (1 856)         (1 329)   
Distribution paid to unitholders                                                   (14 533)         (1 858)   
Net cash inflow from operating activities                                             2 638           6 491   
Net cash outflow used in investing activities                                     (183 675)       (153 331)   
Net cash inflow from financing activities                                           177 028         153 210   
Net (decrease)/increase in cash and cash equivalents                                (4 009)           6 370   
Cash and cash equivalents to beginning of the period                                  6 370               –   
Cash and cash equivalents at the end of the period                                    2 361           6 370   

Condensed consolidated statement of changes in equity

                                                                                                      Total   
                                                                      Contributed   Retained   unitholders'   
AUD'000                                                                    equity   earnings       interest   
Balance at 12 December 2012                                                     –          –              –   
Profit for the period                                                           –      7 493          7 493   
Total comprehensive income                                                      –      7 493          7 493   
Transaction with unitholders in their capacity as unitholders                                                 
Issue of ordinary units                                                   131 025          –        131 025   
Distributions paid/payable to ordinary unitholders                              –    (6 460)        (6 460)   
Balance at 31 March 2014                                                  131 025      1 033        132 058   
Profit for the period                                                           –     16 342         16 342   
Total comprehensive income                                                      –     16 342         16 342   
Transaction with unitholders in their capacity as unitholders                                                 
Issue of ordinary units                                                   120 462          –        120 462   
Distributions paid/payable to ordinary unitholders                        (4 991)   (15 167)       (20 158)   
Balance at 31 March 2015                                                  246 496      2 208        248 704   

Condensed segmental information 
                                                                              
AUD'000                                                                       Office   Industrial     Total   
Statement of profit or loss and other comprehensive income 2015                                               
Revenue from external customers, excluding straight-line                                                      
rental revenue adjustment                                                     16 179        6 001    22 180   
Straight-line rental revenue adjustment                                        1 493          547     2 040   
Property expenses                                                            (2 228)        (639)   (2 867)   
Segment results                                                               15 444        5 909    21 353   
Net investment property revaluation                                            2 312        (261)     2 051   
Total segment results                                                         17 756        5 648    23 404   
Statement of financial position extracts at 31 March 2015                                                     
Investment property balance 1 April 2014                                     105 254       49 110   154 364   
Acquisitions                                                                 137 941       45 734   183 675   
Straight-line rental revenue receivable                                        1 493          547     2 040   
Fair value adjustments                                                         2 312        (261)     2 051   
Investment property at 31 March 2015                                         247 000       95 130   342 130   
Statement of profit or loss and other comprehensive income 2014                                               
Revenue from external customers, excluding straight-line                                                      
rental revenue adjustment                                                      4 208        5 921    10 129   
Straight-line rental revenue adjustment                                          311          740     1 052   
Property expenses                                                              (824)        (674)   (1 499)   
Segment results                                                                3 695        5 987     9 682   
Net investment property revaluation                                            (480)          462      (18)   
Total segment results                                                          3 215        6 449     9 664   
Statement of financial position extracts at 31 March 2014                                                     
Investment property balance 12 December 2012                                       –            –         –   
Acquisitions                                                                 105 423       47 908   153 331   
Straight-line rental revenue receivable                                          311          740     1 051   
Fair value adjustments                                                         (480)          462      (18)   
Investment property at 31 March 2014                                         105 254       49 110   154 364   

Notes to the reviewed preliminary condensed consolidated financial results

                                                                                                    Audited   
                                                                                                period from   
                                                                                   Reviewed     12 December   
                                                                                 year ended         2012 to   
AUD'000                                                               Notes   31 March 2015   31 March 2014   
1.   Distribution reconciliation                                                                              
     Profit and total comprehensive income for the period                            16 342           7 493   
     Less: Straight-line rental revenue adjustment                                  (2 040)         (1 051)   
     Add back: Fair value adjustments – investment property                         (2 051)              18   
     Add back: Fair value adjustments – derivatives                                   2 917               –   
     Antecedent distribution                                              a           4 991               –   
     Total distributable earnings                                                    20 159           6 460   
     Less: Pre-listing distribution paid                                                  –         (1 858)   
     Less: Interim distribution paid                                                (9 932)               –   
     Final distribution pre withholding tax                                          10 227           4 602   
     Withholding tax paid/payable to the Australian Taxation Office                   (460)           (290)   
     Final distribution post withholding tax                                          9 767           4 313   
     Number of units                                                                                          
     Units in issue at the end of the period                                        246 581         134 685   
     Weighted average number of units in issue for the period                       190 633          57 214   
     Cents                                                                                                    
     Final distribution per unit (cents) (pre withholding tax)                         4.15            3.42   
     Interim distribution per unit (cents) (pre withholding tax)                       4.03               –   
     Total distribution per unit (cents) (pre withholding tax)            a            8.18            3.42   
     Final distribution per unit (cents) (post withholding tax)                        3.96            3.20   
     Interim distribution per unit (cents) (post withholding tax)                      3.92               –   
     Total distribution per unit (cents) (post withholding tax)           a            7.88            3.20   
     Basic and diluted earnings per unit for the period                   b            8.57           13.10   
     Basic and diluted headline earnings per unit for the period          b            9.77           13.13   


     (a) The full year and half year distributions include the antecedent distribution associated with the rights offer which was
         completed in October 2014. This amounts to AUD5.0mn.
     (b) The annualised basic and diluted earnings per unit and the headline earnings per unit for the period from listing to
         31 March 2014 was 8.27 cents per unit and 8.28 cents per unit respectively.

2.   Fair value adjustment of investment property
     The Fund's policy is to value investment properties at year-end, with independent valuations performed on a rotational
     basis to ensure each property is valued at least every 24 months by an independent external valuer (in compliance with
     the Fund's debt facility). Where directors' valuations are performed, the valuation methods include using the discounted
     cash flow model and the capitalisation model.

     Revaluations were performed at year-end by independent valuers for all properties held by the Fund prior to the rights
     offer which took place in October 2014. Independent external valuations were obtained at the time of acquisition for all
     of the Fund's acquisitions during the year.

     Tightening yields across all sectors contributed to strong valuation uplifts for the properties that were revalued. These
     properties recorded a AUD14.2mn (7.9%) uplift in value. This was offset by the write off of AUD10.1mn of transaction
     costs associated with the more recent acquisitions. Total net revaluations for the current year amounted to AUD2.05mn
     as set out below:

                                                                                                    Audited   
                                                                                                period from   
                                                                                   Reviewed     12 December   
                                                                                 year ended         2012 to   
     AUD'000                                                                  31 March 2015   31 March 2014   
     Gross investment property fair value adjustment                                  4 091           1 033   
     Less: Straight-line rental revenue adjustment                                  (2 040)         (1 052)   
     Total fair value adjustment – investment property                                2 051            (18)   
     Fair value adjustment on interest rate swap                                    (2 917)              17   
     Net fair value adjustments                                                       (866)             (1)   
3.   Headline earnings reconciliation                                                                         
     Profit and total comprehensive income for the period                            16 342           7 493   
     Add back: Fair value adjustments – investment property                           2 051              18   
     Headline earnings                                                               18 393           7 512   
     Basic and diluted headline earnings per unit (cents)                              9.65           13.13   

4.   Working capital management
     The Fund utilises its monthly cash flows to pay down its debt facility whilst maintaining the facility limit. The Fund will draw
     this cash back from the debt facility in order to pay its final distribution in June 2015. This results in the most efficient use
     of the Fund's strong cash flows. The current undrawn facility limit is AUD11.0mn and the Fund has the ability to draw on
     this unconditionally.

5.   Related party transactions
     The Fund entered into the following significant related party transactions during the year with the Investec Group and its
     subsidiaries:

     Transaction with related parties (AUD'000)                               31 March 2015   31 March 2014   
     Payments to Investec Group and its subsidiaries:                                                         
     Investec Property Management Pty Limited                                                                 
     Asset management fee                                                             1 583             439   
     Property management fee*                                                           320              61   
     Leasing fee                                                                         41               –   
     Investec Bank Limited                                                                                    
     Sponsor fee                                                                         10              10   
     Capital raising fees and listing costs                                             888           2 160   
     Receipts from Investec Group and its subsidiaries:                                                       
     Investec Australia Limited                                                                               
     Payments to the Fund under income support arrangements**                         1 161             834   

     *  Investec Property Management Pty Limited (IPMPL) has been contracted to perform property management services. IPMPL has sub-contracted this
        to third party property managers who receive this fee from IPMPL.
     ** The two tenancies that were the subject of these income support arrangements have now been leased to third parties.

6.   Financial instruments
     Financial instruments held at fair value consist of interest rate swaps, which are classified as level 2. These are valued
     using valuation models which use market observable inputs such as quoted interest rates. No other financial instruments
     are carried at fair value.

7.   Comparative period
     The comparative period results presented cover the 15-month period from 12 December 2012 (being the date the
     Fund was established) to 31 March 2014; however, the period relevant to unitholders is from the listing date (being
     24 October 2013) to 31 March 2014. Therefore, the comparative results are limited in their comparability with the current
     preliminary results.

Commentary

Introduction
Investec Australia Property Fund ("the Fund") is the first inward-listed Australian REIT on the JSE. It is an income-producing fund that
operates in a stable and developed market. The Fund currently comprises 17 properties in Australia with a total gross lettable area
("GLA") of 125 118m(2) and a portfolio value of AUD361.3mn, post the Glendenning acquisition.

The Fund aims to maximize sustainable returns to unitholders by investing in quality office, industrial and retail properties in Australia,
giving unitholders exposure to the Australian real estate market.

Financial results
The results below are the outcome of the successful implementation of the strategy outlined at listing, namely:
- Acquiring quality real estate, backed by solid property fundamentals:
  - good location, strong tenant covenants, contractual escalations, new or near new buildings or limited capital expenditure
    requirements with attractive depreciation shields

- Deploying the gearing capacity from the listing and subsequent equity capital raised quickly and effectively, by accessing off-
   market transactions and benefiting from the positive spread between property yields and cost of debt, locking in near all-time low
   interest and credit spreads through conservative and effective balance sheet and interest rate management

The board of directors of Investec Property Limited ("IPL") is pleased to announce a 9.1% increase in the pre withholding tax final
distribution to 4.15 cents per unit (2014: 3.80cpu annualised) bringing the total distribution for the year to 8.18 cents per unit pre
withholding tax (2015: 7.60cpu annualised), representing growth for the full year of 7.6%.

The Fund is also reporting an 11.6% increase in the post withholding tax final distribution to 3.96 cents per unit. This brings the total
post withholding tax distribution for the year to 7.88 cents per unit, representing growth for the full year of 11.0% post withholding
tax. The effective rate of withholding tax on the distribution has been impacted by the antecedent distribution (which is not subject to
withholding tax) and once off tax deductions which are not expected to be repeated in future years. The normalised distribution per
unit post withholding tax without the effect of these once off items would have been approximately 7.73 cents per unit representing
normalised growth of 8.8% post withholding tax.

The Fund's second half results are of particular importance, given that it is the first period for which comparable results have been
presented since listing in October 2013. The Fund's average level of gearing during the year was 17.4% (2014: 2.9%), which when
combined with the spread of property yield over cost of debt of approximately 4%, has led to the 9.1% distribution growth for the
six-month period and 7.6% for the full year.

Distribution growth – pre WHT
Cents per unit                                                                             H2            Full year
2014 annualised                                                                          3.80                 7.60
2015                                                                                     4.15                 8.18
+/-                                                                                      9.1%                 7.6%

The Fund also recorded good asset value growth on the back of strong revaluations across the portfolio (7.8% uplift year
on year). This, along with the strong performance of the property portfolio as a whole, has translated into NAV growth of
8.7% year on year and 9.7% since listing, pre transaction costs. The NAV growth post transaction costs (largely stamp
duty of approximately 5.5% of transaction value) is diluted to 3.4% due to the extent of acquisitive growth that the Fund has
experienced from its portfolio of AUD154.4mn last year.

Properties
The Fund currently has a core portfolio of 17 quality and well located properties. The strength of the property fundamentals is
evidenced by a long dated WALE of 6.4 years with 64% of leases expiring after five years. The portfolio currently has 98.7%
occupancy, strong tenant covenants and attractive average rental escalations of approximately 3.4% per annum.

Property                                                                                                             
                                                                             % of                     % of     Cap   
                                                           Book value   portfolio   Total area   portfolio    rate   
                                             Sector             (AUD)    by value       (m(2))     by area       %   
Industrial portfolio                                                                                                 
48 Hawkins Crescent, Ipswich QLD             Industrial     3 580 000         1.0        2 045         1.6    8.00   
47 Sawmill Circuit, Hume ACT                 Industrial    10 400 000         2.9        5 535         4.4    7.25   
57 Sawmill Circuit, Hume ACT                 Industrial     9 100 000         2.5        7 079         5.7    7.75   
24 Sawmill Circuit, Hume ACT                 Industrial     9 400 000         2.6        6 300         5.0    7.75   
44 Sawmill Circuit, Hume ACT                 Industrial     9 500 000         2.6        4 639         3.7    8.75   
2 – 8 Mirage Rd, Direk SA                    Industrial    10 000 000         2.8        6 782         5.4    8.00   
Industrial assets acquired during the year                                                                           
30 – 48 Kellar Street, Berrinba QLD          Industrial     8 200 000         2.3        4 102         3.3   8.34*   
165 Newton Road, Wetherill Park NSW          Industrial    18 500 000         5.1       12 529        10.0   7.86*   
24 Spit Island Close, Newcastle NSW          Industrial     8 350 000         2.3        5 258         4.2   8.04*   
67 Calarco Drive, Derrimut VIC               Industrial     8 100 000         2.2        7 149         5.7   7.73*   
Office portfolio                                                                                                     
449 Punt Road, Cremorne VIC                  Office        34 000 000         9.4        6 384         5.1    7.50   
35 – 49 Elizabeth Street, Richmond VIC       Office        61 000 000        16.9       11 917         9.5    7.50   
Building 20, 2404 Logan Road, Eight Mile                                                                             
Plains QLD                                   Office        21 000 000         5.8        3 571         2.9    8.25   
Office assets acquired during the year                                                                               
186 Reed Street, Greenway ACT                Office        26 500 000         7.4        5 407         4.3   7.84*   
757 Ann Street, Fortitude Valley QLD         Office        65 500 000        18.1        9 125         7.3   8.34*   
21 – 23 Solent Circuit, Baulkham Hills NSW   Office        39 000 000        10.8       10 835         8.7   7.77*   
Total at 31 March 2015                                    342 130 000                  108 657                       
Acquired subsequent to 31 March 2015                                                                                 
66 Glendenning Road, Glendenning NSW         Industrial    19 170 000         5.3       16 461        13.2    7.66   
Total                                                     361 300 000                  125 118                       

* Acquisition yield.                                                                                                 

Acquisitions
During the year the Fund completed AUD183.7mn of property acquisitions and has completed a further AUD21.5mn acquisition post
year-end, increasing the portfolio value by 122% for the year and 2.8x since listing in October 2013.

The acquisitions comprise a mix of high quality office and industrial properties which are well located and have strong tenant
covenants. They also reflect management's strategic focus and ability to unlock off-market transactions through the Investec network
in a very competitive market.

Yields have continued to tighten across all market sectors over the year which is reflected in the recent acquisitions. This has reduced
the net property income yield across the portfolio, which has been mitigated by downward pressure on borrowing costs, proactively
managed by management. The weighted average property yield of the portfolio is now 8.23% (31 March 2014: 8.44%; on listing:
8.59%). This yield compression has also had a positive effect on property valuations.

Vacancy levels
The property portfolio currently has 1.3% vacancy which comprises 1 636m(2) at the recently acquired property at 21 – 23 Solent
Circuit, Baulkham Hills NSW. This vacancy represents an opportunity to increase the already attractive yield on which this asset was
purchased from 7.8% to 9.4%. No other tenancies have become vacant during the period.

Lease expiry profile by sector
The Fund's lease expiry profile at year-end remains very strong with a weighted average lease expiry of 6.4 years by income and with
64% of leases expiring after five years. The lease expiry profile reflects the quality and sustainability of the Fund's net property income.

Geographic spread by GLA (%)
31 March 2015
NSW          26%
QLD          17%
ACT          27%
SA            6%
VIC          24%

Geographic spread by income (%)
31 March 2015
NSW           3%
QLD          22%
ACT          26%
SA            4%
VIC          45%

Capital funding
On listing, and in a subsequent fully subscribed rights offer, the Fund has raised AUD234.2mn of equity capital.

The Fund's balance sheet remains well positioned for growth with gearing currently at 27%, post the Glendenning acquisition. At the
Fund's target gearing ratio of up to 40% this gives the Fund up to AUD67.0mn in debt capacity to continue to aggressively pursue
attractive acquisition opportunities.

The Fund has continued to review its fixed borrowing costs and has taken advantage of falling interest rates in Australia by locking
in lower forward rates during the year. The Fund has renegotiated its debt facility, increasing the tenor by three years to five years
and simultaneously reducing the margin by 42.5bps to 1.275%. The Fund now has a long dated debt and swap maturity profile of
4.84 years and 5.52 years respectively and a current hedged position of 100%. The Fund has also achieved an all in cost of funding
of 4.15% at a 100% hedged level – a 15% reduction of 64bps since listing.

Australian REIT structure
The Fund allows for the tax efficient flow-through of net income to unitholders. The Fund is an uncapped and open-ended fund
and existing and future unitholders will hold a participatory interest in the Fund, which entitles unitholders to a pro rata share of
the underlying income generated by the Fund and a pro rata beneficial interest in the assets of the Fund. The Fund is registered
as a Managed Investment Scheme in Australia. The Fund is governed and operated by IPL and managed by Investec Property
Management Pty Limited.

Unit capital
The Fund has unit capital of AUD246.5mn at 31 March 2015. The Fund had 134.7mn units in issue at the beginning of the year.
In October 2014, the Fund issued 111.9mn new units as part of a AUD120.0mn rights offer taking the total units in issue to 246.6mn
at year-end.

Unitholders
Investec Property Fund Limited and Investec Bank Limited are the only unitholders holding in excess of 5% of the Fund's total issued
units, holding 18.56% and 16.33% respectively.

Number of units in issue                                                                            246 581 298
Number of unitholders                                                                                     2 839

Changes to the board
In July 2014, unitholders were informed of the unfortunate and untimely passing of Michael Crawford. Mr Crawford was an independent
non-executive director of IPL and a member of the Audit and Risk Committee. Mr Crawford made an invaluable contribution to the
board and board committees of IPL and to the listing and initial growth phase of the Fund.

Sam Hackner resigned as a non-executive director of IPL effective 7 July 2014.

Stephen Koseff was appointed as a non-executive director of IPL effective 7 July 2014.

Hugh Martin was appointed as an independent non-executive director of IPL effective 30 September 2014. Mr Martin is also a
member of the Audit and Risk Committee.

Prospects
The FY 2015 results reflect the positive outcome of the successful execution of the Fund's strategy to date. The Fund is therefore
well positioned to continue with the execution of its strategy to deliver long-term sustainable income and capital growth through the
acquisition and efficient management of quality properties and conservative yet proactive balance sheet and interest rate management.

The board of IPL is therefore pleased to communicate expected distribution growth in FY 2016 of between 10% and 12% pre
withholding tax. The lower end of this guidance assumes no change in the current property portfolio and a gearing level of 30%. The
upper end of this guidance assumes further deployment of gearing capacity during FY 2016 into similar yielding assets. The Fund
currently has AUD67.0mn of gearing capacity up to 40% gearing to deploy into new acquisitions.

This forecast is based on the assumptions that the macro-economic environment will not deteriorate markedly, no tenant failures will
occur and budgeted renewals will be concluded. Budgeted rental income was based on in force leases, contractual escalations and
market-related renewals.

The information and opinions contained above are recorded and expressed in good faith and are based upon sources believed to be
reliable. No representation, warranty, undertaking or guarantee of whatever nature is made or given concerning the accuracy and/or
completeness of such information and/or the correctness of such opinions.

The independent auditor's review report does not report on all of the information contained in this announcement. Any reference to
future financial information included in this announcement has not been reviewed or reported on by the Fund's independent auditors.

On behalf of the board of Investec Property Limited as responsible entity for Investec Australia Property Fund.

Richard Longes                                        Graeme Katz
Chairman                                              Chief Executive Officer

21 May 2015

Basis of accounting
The reviewed preliminary condensed consolidated financial results for the year ended 31 March 2015 have been prepared in
accordance with the recognition and measurement criteria of International Financial Reporting Standards ("IFRS"), the presentation
and disclosure requirements of IAS 34: Interim Financial Reporting as issued by the International Accounting Standards Board, the
SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by
Financial Reporting Standards Council.

The accounting policies applied in the preparation of the reviewed preliminary condensed consolidated financial results for the year
ended 31 March 2015 are in terms of IFRS and are consistent with those adopted in the audited financial statements for the period
ended 31 March 2014, except for the following newly effective standards: IFRS 10: Consolidated Financial Statements and IFRS 12:
Disclosures of Interests in Other Entities.

IFRS 10 introduces a single control model to determine whether an investee should be consolidated. IFRS 12 brings together in
a single standard all the disclosure requirements about an entity's interests in subsidiaries, joint arrangements, associates and
unconsolidated structured entities. These standards do not have a significant impact on the Fund.

Review conclusion
These reviewed preliminary condensed consolidated financial results for the year ended 31 March 2015 have been reviewed by
KPMG, who expressed an unmodified review conclusion. A copy of the auditor's review report is available for inspection at IPL's
registered office together with the financial statements identified in the auditor's report.

Distribution
Notice is hereby given of a final distribution declaration number 3 of:
- 4.14727 cents per unit pre withholding tax
- 3.96077 cents per unit post withholding tax

for the period from 1 October 2014 to 31 March 2015, payable to holders of the units as recorded in the register of unitholders of
the Fund at the close of business on Friday, 12 June 2015. Withholding tax of 0.18650 cents per unit (4.49690%) will be withheld
from the distribution paid to non-Australian unitholders and will be paid to the Australian Taxation Office. The distribution includes the
antecedent distribution associated with the rights offer which was completed in October 2014.

The distribution amount declared from net rental income will be converted from AUD to ZAR at the spot rate on Thursday,
28 May 2015 and the ZAR amount will be announced on SENS Friday, 29 May 2015. The distribution will be paid to unitholders
in ZAR.

The salient dates relating to the distribution are as follows:

Last day to trade in order to participate in the distribution                                               Friday, 5 June 2015
Units to trade ex distribution                                                                              Monday, 8 June 2015
Distribution amount transferred to South Africa                                                          Thursday, 11 June 2015
Record date                                                                                                Friday, 12 June 2015
Distribution posted/paid to certificated unitholders                                                       Monday, 15 June 2015
Accounts credited by CSDP or broker to dematerialised unitholders                                          Monday, 15 June 2015

Units may not be dematerialised or rematerialised between Monday, 8 June 2015 and Friday, 12 June 2015, 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.

Number of units in issue at the date of the declaration: 246 581 298

The distributions, net of withholding tax, received by South African institutional and individual unitholders will constitute income and
will be subject to income tax in South Africa at the unitholders' marginal tax rate. Individual unitholders will be able to claim a rebate
against the withholding tax paid in Australia (0.18650 cents per unit). Non-tax paying institutional unitholders will not be taxed and will
therefore not be entitled to claim a rebate. The effective withholding tax rate on the distribution is 4.49690%.

The above summary of the tax treatment of the foreign distribution does not constitute legal or tax advice and is based on taxation
law and practice at the date of this announcement. Unitholders should take their own tax advice as to the consequences of their
investment in the Fund and are encouraged to consult their professional advisors should they be in any doubt as to the appropriate
action to take.

By order of the board

Investec Property Limited
Company Secretary

21 May 2015

Directors of the Responsible Entity                                Manager
Richard Longes# (Non-executive chairman)                           Investec Property Management Pty Limited
Stephen Koseff (Non-executive)                                     (ACN 161 587 391)
Graeme Katz (Executive)                                            Level 23, Chifley Tower
Samuel Leon (Non-executive)                                        2 Chifley Square
Sally Herman# (Non-executive)                                      Sydney
Hugh Martin# (Non-executive)                                       New South Wales
# Independent                                                      2000
                                                                   Australia
Directors of the Manager
Graeme Katz (Executive)                                            Transfer Secretaries
Zach McHerron (Executive)                                          Computershare Investor Services Proprietary Limited
Matthew Liston (Executive)                                         70 Marshall Street
Jason Sandler (Executive)                                          Johannesburg
Samuel Leon (Non-executive)                                        2001
                                                                   (PO Box 61051, Marshalltown, 2107)
Investec Australia Property Fund                                   Phone: +27 11 370 5159
Registered in Australia in terms of ASIC (ARSN 162 067 736)
Registered in terms of the Collective Investment Schemes           Sponsor
Control Act No. 45 of 2003                                         The Corporate Finance division of Investec Bank Limited
Share code: IAP                                                    2nd Floor
ISIN: AU60INL00018                                                 100 Grayston Drive
                                                                   Sandown
Company Secretary of the Responsible Entity                        Sandton
Paul Lam-Po-Tang (BCom, LLB)                                       2196
                                                                   (PO Box 785700, Sandton, 2146)
Registered office and postal address of the Responsible            
Entity and date of establishment of the Fund
                                                                   Custodian
Australia:                                                         Perpetual Corporate Trust Limited
Level 23, Chifley Tower                                            (ACN 000 341 533)
2 Chifley Square                                                   Level 12, 123 Pitt Street
Sydney                                                             Sydney
New South Wales                                                    New South Wales
2000                                                               2000
Australia                                                          Australia

Local representative office:
2nd Floor
100 Grayston Drive
Sandown
Sandton
2196

Established on 12 December 2012 in Sydney, Australia.
Registered as a Managed Investment Scheme with ASIC under
the Corporations Act on 6 February 2013. On 23 August 2013
the Registrar of Collective Investment Schemes authorised the
Fund to solicit investments in the Fund from members of the
public in the Republic of South Africa in terms of Section 65 of
the Collective Investment Schemes Control Act, 45 of 2002, as amended.

Responsible Entity
Investec Property Limited
(ACN 071 514 246 AFSL 290 909)
Level 23, Chifley Tower
2 Chifley Square
Sydney
New South Wales
2000
Australia



Date: 21/05/2015 07:51:00 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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