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GROWTHPOINT PROPERTIES LIMITED - Summary of audited results for the year ended 30 June 2017

Release Date: 30/08/2017 08:00
Code(s): GRT     PDF:  
Wrap Text
Summary of audited results for the year ended 30 June 2017

GROWTHPOINT PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/004988/06)
A Real Estate Investment Trust, listed on the JSE
Share code: GRT  ISIN: ZAE000179420

SUMMARY OF AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2017

HIGHLIGHTS

- 195.8 cents
  6.5% growth in dividend per share
- R5.6bn 
  10.4% distributable income growth
- 9.8% 
  growth in gross revenue 
- Largest South African primary listed REIT
  21st largest company in the FTSE/JSE top 40 index
- Market capitalisation R70.7bn
- 8th year inclusion in FTSE/JSE Responsible Index
- R3.8bn average value of shares traded per month

Top 5 constituent of FTSE Russell EPRA/NAREIT Emerging Index    
Investment proposition:
- Sustainable quality of earnings
- 14-year track record of uninterrupted dividend growth
- Underpinned by high-quality physical property assets
- Diversified across international geographies and sectors
- Dynamic and proven management track record
- Best practice corporate governance
- Transparent reporting
- Level 3 BEE contributor

- 4.4% vacancies
  RSA vacancies improved from 5.7% FY16 - strong focus on tenant retention
- R122.3bn
  Group property assets 
- 35.0% LTV gearing levels remain conservative, increase from 33.7% FY16 

Commentary

INTRODUCTION
Growthpoint is the largest South African primary listed REIT with total group property assets valued at R122.3bn, 
of which 30% is situated offshore. It has a quality portfolio of 471 directly owned properties in South Africa, valued 
at R76.9bn, as well as two material equity-accounted investments.
 
Growthpoint's share of properties in these two investments is valued at R12.9bn, of which the V&A Waterfront is the
largest at R8.7bn. The other equity-accounted investment is London Stock Exchange (AIM)-listed Globalworth Real Estate
Investments (Globalworth) of which Growthpoint acquired a 26.9% stake during the period, with our share of properties
valued at R4.2bn.
 
In addition Growthpoint has a 65.1% interest in Growthpoint Properties Australia (GOZ), which owns 57 properties in
Australia valued at R32.5bn. 

In line with Growthpoint's vision "to be a leading international property company providing space to thrive", the 
company's strategy incorporates the optimisation and streamlining of our existing portfolio, the introduction of 
new revenue streams via the funds management business and trading and development and lastly, further international 
diversification. The Company has set a target to double the offshore contribution to distributable income over the 
next three to five years. 
 
Keeping the above in mind, the company's objective is to grow and nurture a diversified portfolio of quality 
investment properties, providing accommodation to a wide spectrum of users and delivering sustainable income 
distributions and capital appreciation, optimised by effective financial structures. Effectively, net property 
income received by the property portfolios of South Africa(RSA) and GOZ, including interest received, the 
distributable income received from the equity-accounted and listed investments, less administration and 
operating overheads, interest on debt and normal taxation, is distributed to Growthpoint shareholders 
bi-annually. Growthpoint's distributions are based on sustainable income generated from rentals, trading 
profits and development fees capped at 15% of the gross RSA portfolio value and going forward, 
distributions and management fees from its Funds Management business.

Growthpoint is included in the FTSE/JSE Top 40 Index, with a market capitalisation of R70.7bn at 30 June 2017 (FY17).
Over this period, on average, more than 147.8m shares traded per month (FY16: 154.6m). The monthly average value traded
was R3.8bn (FY16: R3.8bn). This makes Growthpoint the most liquid and tradable way to own commercial property in South
Africa. 

Excluding the equity-accounted investments, the South African portfolio represents 70.3% of the property portfolio by
value and 83.1% by gross lettable area (GLA), and is well diversified in the three major sectors of commercial property,
being retail, office and industrial. The bulk of the value of the South African properties is situated in strong
economic nodes within the major metropolitan areas. For the period under review, net asset value of the Group increased 
by 1.7% to 2 518 (FY16: 2 477) cents per share. 

GROWTH IN DISTRIBUTIONS
Growthpoint delivered growth in distributions per share for FY17 of 6.5% and has declared a final dividend of 100.8
cents per share for the six months ended 30 June 2017, which is 6.9% greater than the FY16 final dividend of 94.3 cents
per share. This growth is in excess of the guidance given to the market in the FY16 results of between 5.0% and 6.0%. 

In Rand terms, distributions increased by R528m or 10.4% and is supported by a solid performance from the South
African portfolio, the V&A Waterfront, the Healthcare Fund and GOZ. Globalworth made its maiden contribution as well 
as the first inclusion of trading profit and development fee income. 

BASIS OF PREPARATION 
The summarised consolidated financial statements are prepared in accordance with International Financial Reporting
Standards (IFRS), the South African Institute of Chartered Accountants Financial Reporting Guides as issued by the
Accounting Practices Committee, the Financial Reporting Pronouncements as issued by the Financial Reporting Standards 
Council, the JSE Listings Requirements and the requirements of the South African Companies Act 2008, as amended, and 
to also, as a minimum contain the information required by IAS 34, Interim Financial Reporting. The accounting policies 
applied in the preparation of these summarised consolidated financial statements are consistent with those applied 
in the previous consolidated financial statements. 

These summarised consolidated financial statements are extracted from the audited information, but are not themselves
audited. The annual financial statements were audited by KPMG Inc., who expressed an unmodified opinion thereon. The
auditor's report does not necessarily report on all the information contained in these summarised consolidated financial
statements. 

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 the auditor's report together with the accompanying audited consolidated financial
statements, both of which are available for inspection at the company's registered office. The directors of Growthpoint
Properties Limited take full responsibility for the preparation of this report and that the selected financial information
has been correctly extracted from the underlying consolidated financial statements. 

Mr G Volkel (CA(SA)), Growthpoint's Financial Director, was responsible for supervising the preparation of these
summarised consolidated financial statements. 

GROWTHPOINT PROPERTIES AUSTRALIA (GOZ) 
The investment in GOZ has been accounted for in terms of IAS 21 The effects of changes in foreign exchange rates. 
The statement of financial position includes 100% of the assets and liabilities of GOZ, converted at the closing 
exchange rate at FY17 of R10.04:AUD1 (FY16: R11.04:AUD1). The statement of profit or loss and other comprehensive 
income also includes 100% of the revenue and expenses of GOZ, which were translated at an average exchange rate of 
R10.26:AUD1 (FY16: R10.57:AUD1) for FY17. The resulting foreign currency translation difference is recognised in 
other comprehensive income. A non-controlling interest was raised for the 34.9% (FY16: 34.5%) not owned by Growthpoint. 

A deferred tax liability of R2.1bn (FY16: R2.1bn) is included in the statement of financial position. This relates to
capital gains tax payable in Australia if Growthpoint were to sell its investment in GOZ. Included in normal tax in the
statement of profit or loss and other comprehensive income is R96m (FY16: R72m) that relates to withholding tax paid on
the distributions received from GOZ.

V&A WATERFRONT AND OTHER EQUITY-ACCOUNTED INVESTMENTS
The investments in the V&A Waterfront and the other joint ventures have been accounted for in terms of IFRS 11 Joint
arrangements. The equity accounting method was used, whereby the Group's share of the profit or loss and other
comprehensive income of these investments was accounted for. 

Retail sales grew by 3% and trading density by 2%, both coming off a high base. International tourists increased 
by 35% year on year, albeit that spending power reduced due to a stronger rand. The V&A Waterfront hotels trade on 
average 63% higher in revenue per available room than the Cape Town city hotels. Included in the FY17 finance income 
is R524m income from the V&A Waterfront, compared to distributable income for FY16 of R479m. 

NET PROPERTY INCOME 
Gross revenue increased by 9.8% for FY17 compared to FY16. The South African operations increased revenues by 6.5%
compared to FY16. In Rand terms the GOZ operations increased revenues by 21.2%. The ratio of property expenses to 
revenue for the Group decreased to 21.0% at FY17 from 21.8% at FY16. For RSA the ratio decreased to 23.5% from 24.5%
at FY16. Best practice recommendations were issued by the SA REIT Association outlining the need to provide consistent
presentation and disclosure of relevant ratios in the SA REIT sector. This will ensure information and definitions are
clearly presented, enhancing comparability and consistency across the sector. Below are the Group cost-to-income ratios,
set out in terms of the three different definitions to comply with these best practice recommendations. 

                                     2017        2016     
                                        %           %    
Property cost-to-income ratio                            
Gross                               30.42       31.66    
Net                                 16.56       17.32    
Based on IFRS reported figures      20.95       21.77    
Operating cost-to-income ratio                           
Gross                                4.15        3.49    
Net                                  3.88        3.15    
Based on IFRS reported figures       3.88        3.15    
Total cost-to-income ratio                               
Gross                               34.00       34.61    
Net                                 20.66       20.65    
Based on IFRS reported figures      24.83       24.93    

FAIR VALUE ADJUSTMENTS 
The revaluation of properties in South Africa and GOZ resulted in an upward revision of R1.9bn (1.8%) to R109.4bn 
for investment property (including investment properties classified as held for sale). Interest-bearing borrowings 
and derivatives were fair valued using the swap curve at FY17, resulting in an increase of R493m in the overall 
liability. In addition, losses of R288m and R140m were realised on the settlement of an interest rate swap by the 
South African operations and GOZ respectively. 

These fair value adjustments, together with the other non-distributable items such as capital items, non-cash charges,
deferred taxation and the net effect of the non-controlling interest's portion of the non-distributable items, were
transferred to the non-distributable reserve. 

FINANCE COSTS 
Finance costs increased by 1.8% to R2 510m (FY16: R2 466m). These outflows were partially offset by the proceeds from
the Distribution Re-Investment Plans (DRIPs) offered by Growthpoint. The weighted average interest rate for RSA
borrowings was 9.2% (7.4% including cross currency interest rate swaps (CCIRS) and EUR debt) (FY16: 9.3%). The weighted 
average maturity of debt remained at 3.0 years (FY16: 3.0 years). Finance costs for GOZ increased by 18.7% from R477m 
in FY16 to R566m in FY17 as a result of the GPT Metro Office Fund (GMF) acquisition. The interest cover ratio, whereby 
the income from the equity-accounted investments and listed investments are included in the operating profit, increased 
to 3.5 times at FY17 (FY16: 3.3 times). 

FINANCE INCOME 
Finance income increased by 0.3% to R692m (FY16: R690m). This relates mainly to the interest received on the
debentures held in the V&A Waterfront and other long-term loans of R739m that have been granted. 

ACQUISITIONS AND COMMITMENTS
Growthpoint acquired three industrial properties for R188m, five office properties for R191m and three healthcare
properties for R1.5bn during the period. Development and capital expenditure for RSA amounting to R2.1bn (FY16: 
R2.4bn) relates to various projects undertaken during the period, of which the Discovery Head Office accounted for 
R669m (FY16: R497m). 

Growthpoint RSA has commitments in respect of developments amounting to R2.0bn (FY16: R1.7bn), of which the Exxaro
Head Office (R488.6m), 144 Oxford (R647.1m), the Discovery Head Office (R399.0m) (55% share) are the most significant.
Further commitments in respect of property acquisitions amount to R1.0bn which includes the acquisition of the N1 
City Mall (balance of 58%) not already owned. 

GOZ acquired six office properties for R5.0bn (AUD480.3m) and incurred development expenditure amounting to R473.0m
(AUD47.0m) of which R319.0m (AUD29.5m) was in respect of office property development situated at 211 Wellington Road,
Mulgrave, Victoria. GOZ has commitments of R150.5m (AUD15.0m) which includes a commitment to fund the development of 
1 Charles Street, Paramatta, New South Wales. 

Development and capital expenditure at the V&A Waterfront amounted to R557.6m (FY16: R420m) for the period.
Growthpoint's share of the V&A Waterfront's commitments outstanding at FY17 amounted to R220.3m (FY16: R483m), 
which include the Battery Parkade and Dock Road Junction. 

ACQUISITION OF GLOBALWORTH
On 20 December 2016, Growthpoint RSA acquired a 26.9% stake in the London Stock Exchange (AIM)-listed Globalworth,
which is classified as an associate, for a consideration of R2.7bn (EUR186.4m). Globalworth owns a EUR1bn property portfolio
consisting of mostly modern A-grade offices, industrial properties, a residential property complex as well as developments. 
Its portfolio is concentrated in Bucharest and one in Timisoara, Romania and is underpinned by Euro denominated leases
with many multinational business brands. This acquisition was funded by loans of EUR100.0m and the remaining portion by
Rand loans with CCIRS of EUR86.4m at a weighted average term of 4.2 years. The Euro-based interest rates are fixed for a
weighted average term of 9.9 years at a weighted average all-in cost of 2.6%. Transaction costs to date have been treated
as part of the investment in the associate. A notional bargain purchase of R78.0m has been identified as a result of
this investment, and is included in fair value adjustments, capital items and other charges. 

The Group's share of the results in Globalworth and its aggregated assets and liabilities are shown below: 
                                Rm    
Total assets                17 801    
Total liabilities            7 463    
Bargain purchase                78    
Consideration paid           2 704
Percentage held              26.9%    

DISPOSALS AND HELD FOR SALE ASSETS 
Growthpoint RSA disposed of 17 properties in the current period (FY16: 16) for R1.8bn (FY16: R1.1bn) with a collective
R401m (FY16: R220m) profit on cost achieved. 

At FY17, three RSA properties (FY16: six) valued at R201.9m (FY16: R264m) and one Australian property (FY16: five)
valued at R1.0bn (FY16: R1.7bn), were classified as held-for-sale assets. 

ARREARS 
Total RSA arrears at FY17 amounted to R60.4m (FY16: R64.3m) with a provision for bad debts of R26.1m (FY16: R29.8m).
Total RSA bad debt expenses amounted to R13.2m (FY16: R15.9m). 

VACANCY LEVELS 
At FY17, the total m2 of Growthpoint's portfolio and vacancy levels expressed as a percentage of GLA were:
                                      GLA                   Vacancy              
                                 m2             m2         %         %     
                               FY17           FY16      FY17      FY16    
Retail                    1 405 021      1 420 570       3.6       2.6    
Office and Healthcare     1 750 606      1 799 391       6.8       7.8    
Industrial                2 266 957      2 251 089       3.1       6.0    
RSA total                 5 422 584      5 471 050       4.4       5.7    
V&A Waterfront (50%)        223 016        206 838       0.8       1.4    
GOZ                       1 053 148      1 109 545       0.7       0.3    
Total/average %           6 698 748      6 787 433       3.7       4.7    

Vacancies have decreased across the industrial and office sectors in RSA, while the retail sector had an increase 
in vacancies resulting primarily from tenants consolidating space. Tenant retention remains a priority and is being
facilitated through various initiatives including the UNdeposit and SmartMove campaigns.

EQUITY RAISED 
During the period under review, Growthpoint issued 102.4m shares and raised R2.5bn through the DRIP programmes. 
The equity raised from the DRIPs was utilised to finance Growthpoint's investment activities. 

BORROWINGS AND NET WORKING CAPITAL 
At FY17, the consolidated loan-to-value (LTV) ratio, measured by dividing the nominal value of interest-bearing
borrowings (net of cash) by the fair value of property assets, including investment property held for sale, plus 
the equity-accounted investments and the listed investments, was 35.0% (FY16: 33.7%). The higher LTV ratio relates 
directly to the acquisition of Globalworth using debt. Growthpoint has consistently applied its policy on fair value 
measurement in respect of long-term interest-bearing loans and derivatives and there has been no change in valuation 
techniques, nor have there been any transfers between level 1, level 2 and level 3 during the period under review. 

Growthpoint has unutilised committed bank facilities in RSA amounting to R4.5bn and in Australia R1.7bn (AUD167.0m) 
at FY17 which provides assurance that it will be able to meet its short-term commitments which exceeded current 
assets by R2.0bn at FY17 (FY16: R1.4bn). 

CHANGE IN DIRECTORATE 
There has been no changes in directorate during the period under review. 

EVENTS AFTER THE REPORTING PERIOD
Assets held for sale
On 7 July 2017, GOZ transacted and settled Sandgate Road, Nundah, QLD, at a sale price of AUD106.2m with the 
net proceeds used to pay down existing debt. 
 
Purchase of stake in Industria REIT ("IDR")
On 11 July 2017, GOZ acquired a 18.2% interest in IDR for approximately AUD68.1m, representing AUD2.30 per 
IDR security. The acquisition was funded from undrawn debt facilities.
 
Acquisition of industrial portfolio
On 13 July 2017, GOZ announced that it has exchanged contracts for the acquisition of four adjoining, modern 
industrial warehouses at Lot 11 and Lot 1, Part Lot 9, Tarlton Crescent and Lot 6 and Lot 7, Hugh Edwards Drive, 
Perth Airport, WA for AUD46.0m, providing an initial passing yield of 8.13%. The acquisition will be initially 
funded from debt available under existing undrawn facilities.
 
Declaration of dividend after reporting period
In line with IAS 10 Events after reporting period, the declaration of the dividend occurred after the end of 
the reporting period, resulting in a non-adjusting event that is not recognised in the financial statements.
 
PROSPECTS 
The economic growth prospects for South Africa are insufficient to repair the lacklustre demand and weak 
property fundamentals, which are expected to continue. The quality and diversity of the underlying South 
African property portfolio and our strong corporate customer base, together with our investment in the 
prestigious V&A Waterfront, will continue to ensure sustainable, quality earnings domestically. In addition, 
Growthpoint's increased internationalisation has added further geographic exposure to our portfolio. 
The contribution to distributable income from GOZ is expected to increase in line with guidance provided 
by GOZ, albeit that the effective dividend withholding tax percentage, is anticipated to be higher. 
Globalworth is expected to perform well given the robust Romanian economy coupled with demand from global 
corporates for quality office space. Given the above, the Growthpoint Board is of the view that the dividend 
growth for FY18 will be similar to that achieved for FY17.

FINAL DIVIDEND WITH THE ELECTION TO REINVEST THE CASH DIVIDEND IN RETURN FOR GROWTHPOINT SHARES 
Notice is hereby given of the declaration of the final dividend number 63 of 100.80000 cents per share for the period
ended 30 June 2017. Shareholders will be entitled to elect to re-invest the net cash dividend, in return for Growthpoint
shares (share alternative), failing which they will receive the net cash dividend in respect of all or part of their
shareholdings. The entitlement of shareholders to elect to participate in the share re-investment alternative is subject
to the Board, either itself or through a Board subcommittee appointed to set the pricing and terms of the share
re-investment alternative, having the discretion to withdraw the entitlement to elect the share re-investment alternative 
should market conditions warrant such action. A withdrawal of the entitlement to elect the share re-investment alternative 
would be communicated to shareholders before the publication of the finalisation announcement on Monday, 11 September 2017. 

Other information: 
- issued shares at 30 June 2017: 2 888 462 582 ordinary shares of no par value.
- Income Tax Reference Number of Growthpoint: 9375/077/71/7. 
- In accordance with Growthpoint's status as a Real Estate Investment Trust (REIT) with effect from 1 July 2013,
  shareholders are advised that the dividend 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 dividends on the shares will be deemed 
  to be taxable dividends for South African tax purposes in terms of section 25BB of the Income Tax Act. 

Tax implications for South African resident shareholders 
Dividends received by or accrued to South African tax residents must be included in the gross income of such
shareholders and will not be 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 dividends are,
however, exempt from dividend withholding tax (dividend tax) in the hands of South African resident shareholders provided 
that the South African resident shareholders have provided to the Central Securities Depository Participant (CSDP) or
broker, as the case may be, in respect of uncertificated shares, or the company, in respect of certificated shares, a 
DTD (EX) (dividend tax: declaration and undertaking to be made by the beneficial owner of a share) form to prove their 
status as South African residents. If resident shareholders have not submitted the above mentioned documentation to 
confirm their status as South African residents, they are advised to contact their CSDP or broker, as the case may be, 
to arrange for the documents to be submitted prior to the payment of the dividend. 

Tax implications for non-resident shareholders 
Dividends received by non-resident shareholders from a REIT 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) of
the Income Tax Act. Any dividend received by a non-resident from a REIT is subject to dividend tax at 20%, 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 shareholder. Assuming dividend tax will be withheld at a 
rate of 15%, the net amount due to non-resident shareholders is 80.61000 cents per share. A reduced dividend 
withholding tax rate in terms of the applicable DTA may only be relied on if the non-resident shareholder has 
provided the following forms to their CSDP or broker, as the case may be, in respect of uncertificated shares, 
or the company, in respect of certificated shares: 
- 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 company, 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 Service. 

If applicable, non-resident shareholders are advised to contact the CSDP, broker or the company, as the case may be,
to arrange for the aforementioned documents to be submitted prior to payment of the dividend if such documents have not
already been submitted. 

Summary of the salient dates relating to the cash dividend and share alternative are as follows: 
Salient dates and times                                                                           2017    
Circular and form of election posted to shareholders                               Friday, 1 September    
Last date for Growthpoint to withdraw the entitlement for shareholders 
to elect to participate in the share re-investment alternative before 
the publication of the announcement of the share alternative issue 
price and finalisation information on SENS                                        Monday, 11 September    
Announcement of share re-investment alternative issue price and 
finalisation information published on SENS                                       Tuesday, 12 September    
Last day to trade (LDT) cum dividend                                             Tuesday, 19 September    
Shares to trade ex dividend                                                    Wednesday, 20 September    
Listing of maximum possible number of share alternative shares 
commences on the JSE                                                              Friday, 22 September    
Last day to elect to receive the share alternative (no late forms 
of election will be accepted) at 12:00 (South African time)                       Friday, 22 September    
Record date                                                                       Friday, 22 September    
Announcement of results of cash dividend and share re-investment 
alternative published on SENS                                                    Tuesday, 26 September    
Cheques posted to certificated shareholders and accounts credited by CSDP
or broker to dematerialised shareholders electing the cash alternative on        Tuesday, 26 September    
Share certificates posted to certificated shareholders and accounts 
credited by CSDP or broker to dematerialised shareholders electing the 
share re-investment alternative on                                              Thursday, 28 September    
Adjustment to the maximum number of shares listed on or about                     Friday, 29 September    

Notes:
1. Shareholders electing the share re-investment alternative are alerted to the fact that the new shares will be 
   listed on LDT + 3 and that these new shares can only be traded on LDT + 3, due to the fact that settlement 
   of the shares will be three days after record date, which differs from the conventional one day after record 
   date settlement process.                                 
2. Shares may not be dematerialised or rematerialised between commencement of trade on Wednesday, 20 September 2017 
   and the close of trade on Friday, 22 September 2017.             
                                                   
By order of the Board                              
                                                   
GROWTHPOINT PROPERTIES LIMITED 
                    
29 August 2017                                     

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2017
                                                                                  2017          2016    
                                                                   Notes            Rm            Rm    
Revenue, excluding straight-line lease income adjustment                        10 716         9 764    
Straight-line lease income adjustment                                               39           455    
Total revenue                                                                   10 755        10 219    
Property-related expenses                                                       (2 245)       (2 126)    
Net property income                                                              8 510         8 093    
Other administrative and operating overheads                                      (416)         (308)    
Operating profit                                                                 8 094         7 785    
Equity-accounted investment profit - net of tax                                    369           543    
Fair value adjustments, capital items and other charges                          1 850           256    
Finance and other investment income                                    1           692           690    
Finance expense                                                                 (2 510)       (2 466)    
Profit before taxation                                                           8 495         6 808    
Taxation                                                                           (48)         (841)    
Profit for the year                                                              8 447         5 967    
Other comprehensive income                                                                              
Items that may subsequently be reclassified to profit or loss                                           
Translation of foreign operations                                               (1 571)        2 282    
Total comprehensive income for the year                                          6 876         8 249    
Profit attributable to:                                                          8 447         5 967    
Owners of the company                                                            7 524         5 159    
Non-controlling interests                                                          923           808    
Total comprehensive income attributable to:                                      6 876         8 249    
Owners of the company                                                            6 507         6 653    
Non-controlling interests                                                          369         1 596

                                                                                 Cents         Cents
Basic earnings per share                                                        267.72        190.29
Diluted earnings per share                                                      266.21        189.53
Headline earnings per share                                             3       179.66        140.57
Diluted headline earnings per share                                     3       178.64        140.01

                                                                                                        
STATEMENT OF FINANCIAL POSITION
As at 30 June 2017
                                                                                  2017          2016    
                                                                                    Rm            Rm    
Assets                                                                                                  
Cash and cash equivalents                                                          613           901    
Trade and other receivables                                                      3 214         2 496    
Investment property classified as held for sale                                  1 241         1 938    
Derivative assets                                                                  356           107    
Listed investments                                                                 226           440    
Fair value of property assets                                                  108 201       102 752    
Fair value of investment property for accounting purposes                      105 641       100 274    
Straight-line lease income adjustment                                            2 560         2 478    
Long-term loans granted                                                            709           605    
Equity-accounted investments                                                     9 920         6 821    
Equipment                                                                           15             6    
Intangible assets                                                                2 362         2 461    
Total assets                                                                   126 857       118 527    
Liabilities and Equity                                                                                  
Liabilities                                                                                             
Trade and other payables                                                         2 572         2 276    
Derivative liabilities                                                             587         1 094    
Taxation payable                                                                    44            29    
Interest-bearing borrowings                                                     42 568        38 580    
Deferred tax liability                                                           2 332         2 382    
Total liabilities                                                               48 103        44 361    
Shareholders' interest                                                          72 045        68 295    
Share capital                                                                   44 876        42 329    
Retained income                                                                  2 886         2 628    
Other reserves                                                                  24 283        23 338    
Non-controlling interest                                                         6 709         5 871    
Total liabilities and equity                                                   126 857       118 527    

STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2017
                                                                     Non-distributable reserves (NDR)                         
                                                                                                                    Other    
                                                                                                                     fair    
                                                                                                        Fair        value    
                                                                                                       value      adjust-    
                                              Share        Foreign                                   adjust-    ments and    
                                            capital       currency                                   ment on         non-    
                                             net of    translation     Amortisation                  invest-      distri-                
                                           treasury        reserve    of intangible     Bargain         ment      butable             
                                             shares         (FCTR)           assets    purchase     property        items          
                                                 Rm             Rm               Rm          Rm           Rm           Rm    
Balance at 30 June 2015                      40 486          1 072              935         230       21 341       (2 077)    
Total comprehensive income:                                                                                                   
- Profit after taxation                           -              -                -           -            -            -     
- Other comprehensive income                      -          1 494                -           -            -            -     
Transactions with owners                                                                                                     
recognised directly in equity:                                                                                               
Contributions by and                                                                                                         
distributions to owners:                                                                                                     
Shares issued                                 1 797              -                -           -            -            -     
Transfer non-distributable items to NDR           -              -              (72)          6          833         (678)    
Share-based payment transactions                 46              -                -           -            -            -     
Transfer to NDR with NCI                          -              -                -           -            -            -     
Dividends declared                                -              -                -           -            -            -      
Changes in ownership interest:                                                                                                
Rights issue and acquisitions - GOZ               -             36                -           -            -            -     
Acquisitions of NCI without a change                                                                                         
in control                                        -              -                -           -            -            -      
Balance at 30 June 2016                      42 329          2 602              863         236       22 174       (2 755)    
Total comprehensive income:                                                                                                   
- Profit after taxation                           -              -                -           -            -            -     
- Other comprehensive income                      -         (1 017)               -           -            -            -      
Transactions with owners recognised                                                                                          
directly in equity:                                                                                                          
Contributions by and distributions                                                                                           
to owners:                                                                                                                   
Shares issued                                 2 533              -                -           -            -            -         
Transfer non-distributable items to NDR           -              -              (71)         78        1 855          326     
Share-based payment transactions                 14              -                -           -            -            -           
Dividends declared                                -              -                -           -            -            -      
Changes in ownership interest:                                                                                                
Rights issue and acquisitions - GOZ               -            (13)               -           -            -            -     
Balance at 30 June 2017                      44 876          1 572              792         314       24 029       (2 429)    
                                                                                                                                                  
STATEMENT OF CHANGES IN EQUITY (continued) 
For the year ended 30 June 2017
                                            Non-distributable reserves (NDR)                
                                                                                                                               
                                                                                                                            
                                                                       Fair                                               
                                                                      value                                                 
                                                                    adjust-                                                                 
                                           Share-                      ment            Total                                     Non-               
                                            based                 on listed             non-     Retained       Share-    controlling                           
                                         payments     Reserves      invest-    distributable     earnings     holders'       interest       Total            
                                          reserve     with NCI        ments         reserves         (RE)     interest          (NCI)      equity         
                                               Rm           Rm           Rm               Rm           Rm           Rm             Rm          Rm
Balance at 30 June 2015                       160           13            2           21 676        1 207       63 369          4 713      68 082    
Total comprehensive income:                                                                                                                          
- Profit after taxation                         -            -            -                -        5 159        5 159            808       5 967    
- Other comprehensive income                    -            -            -            1 494            -        1 494            788       2 282    
Transactions with owners                                                                                                                
recognised directly in equity:                                                                                                          
Contributions by and                                                                                                                    
distributions to owners:                                                                                                                
Shares issued                                   -            -            -                -            -        1 797              -       1 797    
Transfer non-distributable items to NDR         3            -           58              150         (150)           -              -           -    
Share-based payment transactions                7            -            -                7            -           53              -          53    
Transfer to NDR with NCI                        -          (25)           -              (25)          25            -              -           -    
Dividends declared                              -            -            -                -       (3 613)      (3 613)          (439)     (4 052)    
Changes in ownership interest:                                                                                                                       
Rights issue and acquisitions - GOZ             -            -            -               36            -           36             66         102    
Acquisitions of NCI without a change                                                                                                     
in control                                      -            -            -                -            -            -            (65)        (65)    
Balance at 30 June 2016                       170          (12)          60           23 338        2 628       68 295          5 871      74 166    
Total comprehensive income:                                                                                                                          
- Profit after taxation                         -            -            -                -        7 524        7 524            923       8 447    
- Other comprehensive income                    -            -            -           (1 017)           -       (1 017)          (554)     (1 571)    
Transactions with owners recognised                                                                                                     
directly in equity:                                                                                                                     
Contributions by and distributions                                                                                                      
to owners:                                                                                                                              
Shares issued                                   -            -            -                -            -        2 533              -       2 533    
Transfer non-distributable items to NDR        28            -         (214)           2 002       (2 002)           -              -           -    
Share-based payment transactions              (27)           -            -              (27)           -          (13)             -        (13)    
Dividends declared                              -            -            -                -       (5 264)      (5 264)          (502)     (5 766)    
Changes in ownership interest:                                                                                                                       
Rights issue and acquisitions - GOZ             -            -            -              (13)           -          (13)            971        958    
Balance at 30 June 2017                       171          (12)        (154)          24 283        2 886       72 045           6 709     78 754    
                                                                                                                                                            
                                                                                                                                  2017         2016    
                                                                                                                                 Cents        Cents    
Dividend per share                                                                                                               195.8        183.8  
                                                                                                                                                          
STATEMENT OF CASH FLOWS
For the year ended 30 June 2017
                                                                      2017           2016    
                                                                        Rm             Rm    
Cash generated from operations                                       7 580          7 322    
Interest paid                                                       (2 438)        (2 538)    
Interest received                                                      105             51    
Taxation paid                                                          (84)           (78)    
Distribution to shareholders                                        (5 766)        (4 073)    
Net cash from operating activities                                    (603)           684    
Net cash from investing activities                                  (8 637)        (5 266)    
Net cash from financing activities                                   8 993          4 923    
Effect of exchange rate changes on cash and cash equivalents           (41)            55    
Movement in cash and cash equivalents                                 (288)           396    
Cash and cash equivalents at beginning of year                         901            505    
Cash and cash equivalents at end of year                               613            901    

SEGMENTAL ANALYSIS
For the year ended 30 June 2017

Segment Analysis
The group determines and presents operating segments based on the information that is provided internally to the 
Executive Management Committee (Exco), the group's operating decision-making forum. The group comprises six segments, 
namely Retail, Office, Industrial, Growthpoint Australia, V&A Waterfront and Globalworth. An operating segment's 
operating results are reviewed regularly by Exco to assess its performance and to make decisions about resources to 
be allocated to the segment for which separate financial information is available.

Segment                    Brief description of segment                                       
Retail                     The Growthpoint retail portfolio consists of 56 properties, comprising shopping centres 
                           with the balance being vacant land or standalone single-tenanted properties. It includes 
                           regional, community, neighbourhood, speciality and small regional shopping centres as well 
                           as retail warehouses.                                        
Office                     The Growthpoint office portfolio consists of 182 properties which includes high rise and 
                           low rise offices, office parks, office warehouses, hospitals as well as mixed use properties 
                           comprising both office and retail.                                                                        
Industrial                 The Growthpoint industrial portfolio consists of 233 properties which includes warehousing, 
                           industrial parks, retail warehousing, motor-related outlets, low and high grade industrial, 
                           high-tech industrial as well as mini, midi and maxi units.                                
Growthpoint Australia      The GOZ portfolio consists of 57 properties which includes both industrial and office properties, 
                           all situated in Australia.
V&A Waterfront             The V&A Waterfront is a 122 hectare mixed-use property development situated in and around the 
                           historic Victoria and Alfred Basin, which formed Cape Town's original harbour, with Table Mountain 
                           as its backdrop. Its properties includes retail, office, fishing and industrial, hotel and 
                           residential as well as undeveloped bulk.     
Globalworth                The Globalworth portfolio consists of 18 properties which includes mostly modern A-grade office 
                           properties, industrial properties as well as a residential property complex concentrated in 
                           Bucharest and one in Timisoara, Romania.
   
Profit or loss and asset and liabilities disclosure                                                      
                                                                                  2017                                            
                                                                        Total                                                                     
                                                                        South                 Total as           V&A                              
                                     Retail     Office   Industrial    Africa    Australia    reported    Waterfront    Globalworth       Total    
                                         Rm         Rm           Rm        Rm           Rm          Rm            Rm             Rm          Rm   
Profit or loss disclosures                                                                                                                          
Revenue excluding straight-line                                                                                       
lease adjustment                      3 099      3 632        1 348     8 079        2 637      10 716           726            140      11 582     
Property-related expenses              (792)      (819)        (290)   (1 901)        (344)     (2 245)         (204)           (52)     (2 501)     
Net property income                   2 307      2 813        1 058     6 178        2 293       8 471           522             88       9 081     
Other administrative and                                                                                              
operating overheads                                                      (289)        (127)       (416)          (24)           (16)       (456)     
Equity-accounted investment                                                                                           
profit - net of tax                                                       369            -         369             -              -         369     
Fair value adjustment on                                                                                              
investment property                     481        293          332     1 106          848       1 954           492              4       2 450     
Fair value adjustments                                                                                                
(other than investment property)                                           35            4          39             -              -          39     
Capital items and other charges                                           (91)         (13)       (104)           (1)             8         (97)     
Finance and investment income                                           1 521         (829)        692            28              4         724     
Finance expense                                                        (1 944)        (566)     (2 510)            -           (108)     (2 618)     
Consolidated profit before taxation                                     6 885        1 610       8 495         1 017            (20)      9 492     
Assets                                                                                                                                              
Cash and cash equivalents                                                 298          315         613            81          1 139       1 833     
Trade and other receivables                                             2 649          565       3 214            73             46       3 333     
Investment property classified                                                                                        
as held for sale                        173          -           29       202        1 039       1 241             -              -       1 241     
Derivative assets                                                         356            -         356             -              -         356     
Listed investments                                                        226            -         226             -              -         226     
Fair value of property assets                                                                                                                       
Acquisitions made during the year         -      1 758          116     1 874        5 047       6 921             -            192       7 113     
Balance at year end                  29 415     34 732       12 557    76 704       31 497     108 201         8 705          4 200     121 106     
Long-term loans granted                                                   709            -         709             -              -         709     
Equity-accounted investments                                            9 920            -       9 920             -              8       9 928     
Equipment                                                                   3           12          15             -              -          15     
Intangible assets                                                       2 362            -       2 362             -             52       2 414     
Total assets                                                           93 429       33 428     126 857         8 859          5 445     141 161     
Liabilities                                                                                                                                         
Trade and other payables                                                1 829          743       2 572           111             51       2 734     
Derivative liabilities                                                    523           64         587             -              -         587     
Taxation payable                                                           (4)          48          44             6              -          50     
Interest-bearing borrowings                                            29 492       13 076      42 568           195            559      43 322     
Deferred tax liability                                                  2 332            -       2 332             -             74       2 406     
Total liabilities                                                      34 172       13 931      48 103           312            684      49 099     
                                                                                                                      
                                                                                                               
Profit or loss and asset and liabilities disclosure (continued)
                                                                                   2016                                 
                                                                         Total                                                      
                                                                         South                Total as           V&A             
                                     Retail     Office   Industrial     Africa   Australia    reported    Waterfront          Total  
                                         Rm         Rm           Rm         Rm          Rm          Rm            Rm             Rm
Profit or loss disclosures                                                                                                             
Revenue excluding straight-line                                                                          
lease adjustment                      2 953      3 428        1 208      7 589       2 175       9 764           639         10 403    
Property-related expenses              (814)      (794)        (256)    (1 864)       (262)     (2 126)         (177)        (2 303)    
Net property income                   2 139      2 634          952      5 725       1 913       7 638           462          8 100    
Other administrative and                                                                                 
operating overheads                                                       (204)       (104)       (308)          (20)          (328)    
Equity-accounted investment                                                                              
profit - net of tax                                                        543           -         543             -            543    
Fair value adjustment on                                                                                 
investment property                     448       (457)         106         97       1 115       1 212           585          1 797    
Fair value adjustments                                                                                   
(other than investment property)                                          (321)        (27)       (348)            -           (803)    
Capital items and other charges                                           (151)         (2)       (153)                        (153)    
Finance and investment income                                              684           6         690            69            759    
Finance expense                                                         (1 989)       (477)     (2 466)          (30)        (2 496)    
Consolidated profit before taxation                                      4 384       2 424       6 808         1 066          7 874    
Assets                                                                                                                                 
Cash and cash equivalents                                                  121         780         901            28            929    
Trade and other receivables                                              2 008         488       2 496            48          2 544    
Investment property classified                                                                           
as held for sale                          -        145          119        264       1 674       1 938             -          1 938    
Derivative assets                                                          107           -         107             -            107    
Listed investments                                                         440           -         440             -            440    
Fair value of property assets                                                                                                          
Acquisitions made during the year         -        398          442        840       3 410       4 250             -          4 250    
Balance at year end                  29 210     33 112       11 166     73 488      29 264     102 752         7 766        110 518    
Long-term loans granted                                                    605           -         605             -            605    
Equity-accounted investments                                             6 821           -       6 821             -          6 821    
Equipment                                                                    4           2           6             -              6    
Intangible assets                                                        2 461           -       2 461             -          2 461    
Total assets                                                            86 319      32 208     118 527         7 842        126 369    
Liabilities                                                                                                                            
Trade and other payables                                                 1 837         439       2 276            84          2 360    
Derivative liabilities                                                     925         169       1 094             -          1 094    
Taxation payable                                                             -          29          29             -             29    
Interest-bearing borrowings                                             24 820      13 760      38 580           306         38 886    
Deferred tax liability                                                   2 382           -       2 382             -          2 382    
Total liabilities                                                       29 964      14 397      44 361           390         44 751                 
                                                                                                                                                      
Distributable earnings reconciliation            
                                                                 2017                 2016    
                                                                   Rm                   Rm    
Revenue, excluding straight-line lease          
income adjustment                                              10 716                9 764    
Property-related expenses                                      (2 245)              (2 126)    
Other administrative and operating overheads                     (416)                (308)    
Net interest                                                   (1 818)              (1 776)    
Finance and other investment income                               692                  690    
Interest paid                                                  (2 510)              (2 466)    
Profit on the sale of RSI 1 (Stor-Age)                              -                   51    
Antecedent dividends                                               45                   31    
Non-controlling portion of distribution         
(excluding fair value adjustments) - GOZ                         (502)                (439)    
Distributable income from GOZ retained          
(including NCI's portion)                                        (165)                 (79)    
Realised foreign exchange gain/(loss)                              31                   (9)    
Current normal taxation                                           (98)                 (76)    
Distributable earnings                                          5 548                5 033    
Distributions                                                                                 
Total dividend                                                   2017                 2016  
Distributable earnings Rm                                       5 548                5 033    
Actual number of shares in issue                        2 860 702 595        2 757 563 843    
Distribution per share                                          195.8                183.8    
- Interim taxable dividend Cents                                 95.0                 89.5    
- Final taxable dividend Cents                                  100.8                 94.3    
                                                                                              
                                                                     Number of shares                         
                                                                 2017                 2016    
Shares issued during the year                                                                
Issued ordinary shares at the beginning of year         2 786 093 366        2 711 056 264    
Effect of shares issued                                   102 369 216           75 037 102     
Shares in issue at end of year                          2 888 462 582        2 786 093 366       
Effect of treasury shares held                            (27 759 987)         (28 529 523)    
Shares in issue at end of year                          2 860 702 595        2 757 563 843    
                                                                                              
                                                                 2017                 2016    
                                                                Cents                Cents    
Net asset value per share                                       2 518                2 477    
Tangible net asset value per share                              2 517                2 474    
Net asset value per share is reconciled to      
tangible net asset value per share as follows:     
                                                                   Rm                   Rm    
Net asset value attributable to shareholders                   72 045               68 295    
Less: Net effect of business acquisitions       
and other intangibles                                             (30)                 (79)    
Intangible assets                                              (2 362)              (2 461)    
Deferred tax liability                                          2 332                2 382    
Tangible net asset value                                       72 015               68 216    
                                                                                              

NOTES
For the year ended 30 June 2017
                                                   30 June       30 June     
                                                      2017          2016    
                                                        Rm            Rm    
NOTE 1: FINANCE AND OTHER INVESTMENT INCOME            692           690    
Investment in joint venture - V&A Waterfront           479           429    
V&A Waterfront development funding interest             45            50    
Total V&A Waterfront income                            524           479    
Other finance income                                   168           190    
Listed investments                                       -            21    
                                                                            
NOTE 2: DIVIDENDS ON TREASURY SHARES                                        
The interim dividend of R2 688m (HY16: R2 444m) included dividends on treasury shares of R26m (HY16: R13m). 
The net interim dividend paid by Growthpoint for accounting purposes is R2 662m (HY16: R2 431m).                                
                                                                            
The total dividend of R5 600m for FY17 (FY16: R5 072m) included dividends on treasury shares of R52m (FY16: R39m). 
The net total dividend declared was therefore R5 548m (FY16: R5 033m).                                

NOTE 3: HEADLINE EARNINGS PER SHARE                                                                                   
Reconciliation between basic earnings, diluted earnings and headline earnings          
                                                              Gross                    Total                   
                                                        2017       2016           2017         2016    
                                                          Rm         Rm             Rm           Rm    
Profit for the year                                                              7 524        5 159    
Bargain purchase                                      1 850*        256            (78)          (6)    
Fair value adjustments on investment property         1 850*        256         (2 397)      (1 342)   
Fair value adjustment: Net of 
straight-lining lease adjustment                                                (1 993)        (957)    
NCI portion of fair value adjustments                                             (404)        (385)    
Headline and diluted earnings                                                    5 049        3 811 
* Both the bargain purchase and fair value adjustments on investment property are included on the
  "Fair value adjustments, capital items and other charges" line item on the face of the statement of 
  profit or loss and other comprehensive income.  

NOTE 4: FAIR VALUE DISCLOSURE                            
CLASSIFICATION OF FINANCIAL ASSETS AND LIABILITIES                                            
                                                                      Loans and        Outside             
                                  Held for          Designated            other          scope             
                                   trading       at fair value      receivables      of IAS 39         Total    
                                        Rm                  Rm               Rm             Rm            Rm    
Assets                                                                                                          
2017                                                                                                            
Cash and cash equivalents                -                   -              613              -           613    
Trade and other receivables              -                   -            2 426            788         3 214    
Derivative assets                      356                   -                -              -           356    
Listed investments                       -                 226                -              -           226    
Long-term loans granted                  -                 709                -              -           709    
2016                                                                                                            
Cash and cash equivalents                -                   -              901              -           901    
Trade and other receivables              -                   -            1 812            684         2 496    
Derivative assets                      107                   -                -              -           107    
Listed investments                       -                 440                -              -           440    
Long-term loans granted                  -                 605                -              -           605    
                                                                                                                
NOTE 4: FAIR VALUE DISCLOSURE (continued)                          
                                                                      Loans and        Outside              
                                  Held for          Designated            other          scope              
                                   trading       at fair value      receivables      of IAS 39         Total    
                                        Rm                  Rm               Rm             Rm            Rm
Liabilities                                                                                                     
2017                                                                                                            
Trade payables                           -                   -            2 302            270         2 572    
Derivative liabilities                 587                   -                -              -           587    
Taxation payable                         -                   -                -             44            44    
Interest-bearing borrowings              -              42 568                -              -        42 568    
Deferred tax liability                   -                   -                -          2 332         2 332    
2016                                                                                                            
Trade payables                           -                   -            2 000            276         2 276    
Derivative liabilities               1 094                   -                -              -         1 094    
Taxation payable                         -                   -                -             29            29    
Interest-bearing borrowings              -              38 580                -              -        38 580    
Deferred tax liability                   -                   -                -          2 382         2 382    

FAIR VALUE ESTIMATION                                
Fair value measurement of assets and liabilities                                                 
The below table includes only those assets and liabilities that are measured at fair value including non-recurring 
items measured at fair value:                                                                                              
                                                         2017                                         2016             
                                       Fair value       Level 2        Level 3      Fair value       Level 2        Level 3    
                                               Rm            Rm             Rm              Rm            Rm             Rm    
Assets                                                                                                                         
Recurring fair value measurement                                                                                               
Fair value of property assets             108 201             -        108 201         102 752             -        102 752    
Listed investments                            226             -            226             440             -            440    
Long-term loans granted                       709             -            709             605             -            605    
Derivative assets                             356           249            107             107           107              -    
Non-recurring fair value measurement                                                                                           
Non-current assets held for sale            1 241             -          1 241           1 938             -          1 938    
Total assets measured at fair value       110 733           249        110 484         105 842           107        105 735    
                                                                                                                               
                                                          2017                                        2016                                 
                                       Fair value       Level 2        Level 3      Fair value       Level 2        Level 3    
                                               Rm            Rm             Rm              Rm            Rm             Rm    
Liabilities                                                                                                                    
Recurring fair value measurement                                                                                               
Interest-bearing borrowings                42 632        42 632              -          38 580        38 580              -    
Derivative liabilities                        587           556             31           1 094         1 094              -    
Total liabilities measured 
at fair value                              43 155        43 124             31          39 674        39 674              -    
The carrying amount of assets and liabilities that are not measured at fair value reasonably approximate their fair value due to 
their short-term nature. These include trade and other receivables, cash and cash equivalents and trade and other payables.     
                                                         
Movement in level 3 instruments                                                 
                           
                                           2017                                                                  2016                    
                                                    Long-term                                                        Long-term    
                           Property        Listed       loans   Derivative    Derivative    Property        Listed       loans     
                             assets   investments     granted       assets   liabilities      assets   investments     granted    
                                 Rm            Rm          Rm           Rm            Rm          Rm            Rm          Rm    
Opening balance             104 690           440         605            -             -      93 574           380       1 081    
(Loss)/gain from 
fair value adjustments 
and translation of 
foreign operations           (1 086)         (214)        (25)         107           (31)      5 160            60          (6)    
Accrued interest                  -             -          78            -             -           -             -          83    
Acquisitions                  9 552             -           -            -             -       7 085             -           -    
Disposals                    (3 714)            -           -            -             -      (1 129)            -           -    
Advancements                      -             -         463            -             -           -             -          45    
Settlements                       -             -        (412)           -             -           -             -        (598)    
Closing balance             109 442           226         709          107           (31)    104 690           440         605    


Valuation process
A number of the Group's accounting policies and disclosures require the measurement of fair values, for both financial and 
non-financial assets and liabilities. The Group has an established control framework with respect to the measurement of 
fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value 
measurements, including level 3 fair values, and reports directly to the Financial Director.

The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third-party information, 
such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence 
obtained from the third parties to support the conclusion that such valuations meet the requirements of IFRS, including 
the level in the fair value hierarchy in which such valuations should be classified.

Significant valuation issues are reported to the Group's Audit Committee.

When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. 
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation 
techniques as follows:    
- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.   
- Level 2: inputs other than quoted prices included in level 1 that are observable for the asset or liability, 
  either directly (i.e. as prices) or indirectly (i.e. derived from prices).            
  - Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).  
  
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value 
hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy 
as the lowest level input that is significant to the entire measurement.

Valuation techniques using observable inputs - level 2   
Fair values classified as level 2 have been determined using models for which inputs are observable in an active market. 
A valuation input is considered observable if it is obtained directly, such as quoted prices, or indirectly, such as 
those derived from quoted prices. 

Valuation technique using significant unobservable inputs - level 3  
Fair values are classified at level 3 if their determination incorporates significant inputs that are not based on 
observable market data.                                                                                                

Valuation techniques and significant inputs                           
Level 2 instruments                                          
Interest-bearing borrowings                                  

Description                          Valuation technique                              Significant observable inputs         
Interest-bearing borrowings          Valued by discounting future cash flows          Credit margins: 0.43% to 3.60% 
                                     using the South African swap curve plus an       (FY16: 0.45% to 3.60%)
                                     appropriate credit margin at the dates when 
                                     the cash flows will take place.          
The estimated fair value would increase/(decrease) if the credit margin were lower/(higher).          

Derivative instruments                                                                 
Description                          Valuation technique                              Significant observable inputs         
Forward exchange contracts           Valued by discounting the forward rates          Interest rate swap curve
                                     applied at year end to the open positions.                        
Interest rate swaps                  Valued by discounting the future cash flows      Interest rate swap curve
                                     using the South African swap curve at the       
                                     dates when the cash flows will take place.                                         
Cross-currency interest rate swaps   Valued by discounting the future cash flows      Interest rate swap curve
                                     using the basis swap curve of the respective    
                                     currencies at the dates when the cash flows     
                                     will take place.                                             
                                                                                     
Level 3 instruments 
Investment property  
In terms of the Group's accounting policy, independent valuations are obtained on a rotational basis, ensuring 
that every property is valued at least once every three years by an external, independent property valuer, 
having appropriate recognised professional qualifications and recent experience in the location and category 
of the property being valued.    

The balance of the South African portfolio is valued by Growthpoint's qualified internal valuers. 

The South African properties were valued at FY17 using the discounted cash flow of future income streams 
method by the following valuers who are all registered valuers in terms of section 19 of the Property Valuers 
Professional Act, No 47 of 2000:                      
Mills Fitchet PWV                        PG Mitchell       NDip (Prop Val), MIV (SA), CIEA, professional valuer                  
Mills Fitchet KZN                        T Bates           MSc, BSc Land Econ (UK), MRICS, MIV (SA), professional valuer         
ERIS                                     C Everatt         BSc (Hons) Estate management, MRICS, MIV (SA), professional valuer    
Jones Lang LaSalle                       J Karg            BSc, MRICS, MIV (SA), professional valuer                             
Rode and Associates                      K Scott           BCom (Hons), professional valuer                                      
PropVal Assist                           C van Rooyen      NDip (Prop Val), MIV (SA), professional valuer                        
Spectrum                                 PL O'Connell      NDip (Prop Val), professional valuer                                  
Wolffs Valuation Services (Pty) Ltd      S Wolffs          NDip (Prop Val), professional associate valuer                        

The Australian properties were valued at FY17 using the discounted cash flow of future income streams method by 
Savills, Jones Lang LaSalle, Urbis, Knight Frank, Colliers, M3property and LMW that are all members of the 
Australian Property Institute and certified practising valuers.  

At the reporting date, the key assumptions and unobservable inputs used by the Group in determining fair value of 
investment property were in the following ranges for the Group's portfolio of properties:                            

Description         Valuation                Significant unobservable inputs and range of estimates used                   
                    technique         Discount rate (%)   Exit capitalisation rate (%)   Capitalisation rate (%)    
Retail sector                               12.3 - 17.0                    6.8 - 11.00                6.8 - 11.0    
Office sector       Discounted              13.3 - 15.8                     7.5 - 10.0                7.5 - 10.0    
Industrial sector   cash flow               13.8 - 19.0                     8.0 - 13.5                8.0 - 13.5    
GOZ office          model                    6.8 - 10.0                     6.3 - 11.8                6.0 - 11.8    
GOZ industrial                                7.5 - 9.8                     6.8 - 11.5                 6.0 - 9.5    

The estimated fair value would increase/(decrease) if the expected market rental growth was higher/(lower), 
expected expense growth was lower/(higher), the vacant periods were shorter/(longer), the occupancy rate was 
higher/(lower), the rent-free periods were shorter/(longer), the discount rate was lower/(higher) and/or the 
reversionary capitalisation rate was lower/(higher).

Listed investments                                                                                    
Description                          Valuation technique                              Significant unobservable inputs    
Stenham European Shopping 
Centre Fund (SESCF)                  Valued by discounting future cash flows          Not applicable
                                     using the South African swap curve at 
                                     the dates the cash flows will take place  

Long-term loans granted                                                              
Description                          Valuation technique                              Significant unobservable inputs    
Rabie Property Group (Pty) Ltd       Valued by discounting future cash flows          Not applicable
                                     using a floating rate that is applicable 
                                     to this loan including an estimated 
                                     counter party credit spread.                           
Acucap Unit Purchase Scheme          Valued by discounting future cash flows          Not applicable
                                     using a floating rate that is applicable 
                                     to this loan including an estimated 
                                     counter party credit spread.                           
V&A Waterfront                       Valued by discounting future cash flows          Not applicable
                                     using a floating rate that is applicable 
                                     to this loan including an estimated 
                                     counter party credit spread.                                
Roeland Street Investment            Valued by discounting future cash flows          Not applicable
2 (Pty) Ltd                          using a floating rate that is applicable 
                                     to this loan including an estimated 
                                     counter party credit spread.                           
                                                                                               
Derivative assets and liabilities                                                                         
Description                          Valuation technique                              Significant unobservable inputs    
Cross-currency interest rate swaps   Valued by discounting the future cash flows      Credit curve 
                                     using the basis swap curve of the 
                                     respective currencies at the dates when 
                                     the cash will take place.       

ADMINISTRATION
DIRECTORS 
JF Marais (Chairman), LN Sasse* (Chief Executive Officer), EK de Klerk* (Managing Director), 
G Volkel* (Financial Director), MG Diliza, PH Fechter, LA Finlay, JC Hayward, HS Herman, 
SP Mngconkola, R Moonsamy, NBP Nkabinde, FJ Visser 
* Executive

REGISTERED OFFICE
The Place, 1 Sandton Drive, Sandton, 2196
PO Box 78949, Sandton, 2146

TRANSFER SECRETARY
Computershare Investor Services (Pty) Ltd
(Registration number 2004/003647/07)
Ground Floor, 70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107

COMPANY SECRETARY
RA Krabbenhoft

SPONSOR
Investec Bank Limited
(Registration number 1969/004763/06)
100 Grayston Drive, Sandown, Sandton, 2196
PO Box 785700, Sandton, 2146

The Place, 1 Sandton Drive, Sandton,
Gauteng, 2196, South Africa
Tel: +27 (0) 11 944 6000, Fax: +27 (0) 11 944 6005
PO Box 78949, Sandton, 2146, South Africa
Docex: 48 Sandton Square
info@growthpoint.co.za

http://www.growthpoint.co.za

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