GROWTHPOINT PROPERTIES LIMITED - Summary of audited results for the year ended 30 June 2018

Release Date: 29/08/2018 08:00
Code(s): GRT
 
Wrap Text
Summary of audited results for the year ended 30 June 2018

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 2018

Highlights

Investment proposition:                                                                         
- Sustainable quality of earnings                                                          
- 15-year track record of uninterrupted dividend growth - 3.0% above inflation on average      
- 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

- 6.5% growth in dividend per share - 208.6 cents
- R6.1bn - 10.1% distributable income growth               
- 5.4% vacancies - RSA vacancies increased from 4.4% FY17 - strong focus on tenant retention    
- R132.9bn - Group property assets                                                       
- 35.2% LTV - Gearing levels remain conservative, increased from 35.0% FY17

- Largest South African primary listed REIT 
- 23rd largest company in the FTSE/JSE Top 40 Index
- R79.3bn market capitalisation
- R5.9bn average value of shares traded per month
- Baa3 global scale and AAAza national scale rating from Moody�s
- Included in major sustainability indices: FTSE/JSE Responsible Investment Index, Dow Jones Sustainability 
  Index (DJSI) FTSE4Good Emerging Index      

Commentary
Growthpoint is an international property company that provides space to thrive with innovative and 
sustainable property solutions. 

Introduction
Growthpoint is the largest South African primary JSE-listed REIT with a quality portfolio of 454 directly 
owned properties in South Africa (RSA) valued at R78.8bn. 

Growthpoint has a 65.5% interest in Growthpoint Properties Australia (GOZ), which owns 57 properties in 
Australia valued at R33.6bn. GOZ is listed on the Australian Securities Exchange (ASX).

Growthpoint has six equity-accounted investments, valued at R15.1bn. Growthpoint's 50% share of the 
V&A Waterfront (V&A) is the largest of these investments (R7.5bn), followed by a 29.0% stake in London 
Stock Exchange (AIM)-listed Globalworth Real Estate Investments (GWI) (R5.1bn) and a 21.6% stake in 
Warsaw Stock Exchange-listed (WSE) Globalworth Poland Real Estate (GPRE) (R2.4bn).

Growthpoint also has a listed investment which is an 18.2% shareholding in ASX-listed Industria REIT, 
owned by GOZ, valued at R797.9m.

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 South African portfolio, the 
introduction of new revenue streams via the Funds Management business and trading and development, and 
further international diversification. The company has set a three year target of 30%, being the offshore 
contribution to both EBIT and book value of property assets.

The company's objective is to grow and nurture a diversified portfolio of quality investment properties, providing
accommodation to a wide spectrum of clients 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 biannually. Growthpoint's distributions are based on sustainable 
income generated from rentals, trading profits and development fees and going forward, distributions and 
management fees from its Funds Management business.

Growthpoint is included in the FTSE/JSE Top 40 Index (J200) with a market capitalisation of R79.3bn at 30 June 2018
(FY18). Over this period, on average, 221.5m shares traded per month (FY17: 147.8m). The monthly average 
value traded was R5.9bn (FY17: R3.8bn). This makes Growthpoint the most liquid and tradeable way to own commercial 
property in South Africa. 

The value of Growthpoint's property portfolio is split between South African (inclusive of the V&A) (72.3%) and
international (27.7%) assets. The RSA portfolio represents 84.4% by gross lettable area (GLA), excluding the V&A. 
It is well diversified in the three major sectors of commercial property, being retail, office (including the 
Healthcare Fund) and industrial. Most of the value of the RSA portfolio is in strong economic nodes within 
major metropolitan areas. 

For the period under review the net asset value (NAV) of the group increased by 1.5% to 2 556 (FY17: 2 518) cents 
per share.

Growth in distributions
Growthpoint delivered growth in distributions per share for FY18 of 6.5% and has declared a final dividend of 
107.4 cents per share for the six months ended 30 June 2018 taking the total for the year to 208.6 cents per share. 
This growth is in line with the guidance given to the market for FY18.

Distributions increased by R560m or 10.1% to R6.1bn. 

Basis of preparation
The summarised consolidated financial statements are prepared in accordance with International Financial 
Reporting Standard, IAS 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by 
the Accounting Practices Committee and Financial Pronouncements as issued by Financial Reporting Standards 
Council, and the requirements of the Companies Act of South Africa. The accounting policies applied in 
preparing these financial statements are in terms of International Financial Reporting Standards and are 
consistent with those applied in the previous annual 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 was 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 FY18 of R10.16:AUD1 (FY17: R10.04:AUD1).

On 13 July 2017, GOZ acquired an 18.2% stake in the ASX-listed Industria REIT, classified as a listed 
investment, for AUD68.1m (R681.0m). The investment has subsequently been fair valued to AUD78.4m (R797.9m).

A deferred tax liability of R2.8bn (FY17: 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.

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 R9.97:AUD1 (FY17: R10.26:AUD1) for FY18.

The resulting foreign currency translation difference is recognised in other comprehensive income. A non-controlling
interest was raised for the 34.5% (FY17: 34.9%) not owned by Growthpoint.

Included in the FY18 distributable income is R866.9m income from GOZ, (compared to R833.7m for FY17). Included in 
normal tax in the statement of profit or loss and other comprehensive income is R160.4m (FY17: R95.6m) that relates 
to withholding tax paid on the distributions received from GOZ. The increased withholding tax and stronger Rand had 
a negative impact on the distribution received from GOZ.

V&A Waterfront and other equity-accounted investments
The investments in the V&A, GWI, GPRE and the other joint ventures were accounted for in terms of IFRS 11 Joint
Arrangements. The equity-accounting method was used, where the group's share of the profit or loss and other 
comprehensive income of these investments were accounted for.

Included in the FY18 distributable finance income is R591.7m from the V&A, (compared to R524.0m for FY17), 
R291.0m from GWI (compared to R78m for FY17), and R94.6m from GPRE included for the first time. 

Net property income
Gross revenue increased by 2.4% for FY18 compared to FY17. RSA increased revenues by 4.5%, and the GOZ revenues 
decreased by 3.9% compared to FY17, as a result of the stronger Rand.

The ratio of property cost to income for the group increased slightly to 21.6% at FY18 from 21.0% at FY17. 
For RSA the ratio increased to 23.8% from 23.5% at FY17 and increased for GOZ to 14.2% from 13.0% at FY17.

Fair value adjustments
The revaluation of properties in RSA and GOZ resulted in an increase of R1.6bn (1.4%) to R112.4bn for investment
property (including investment properties classified as held for sale and trading and development). This was driven 
mainly by growth in future contractual rental and capitalisation rate compressions. Interest-bearing borrowings and 
derivatives were fair valued using the South African or Euro swap curve at FY18, increasing the overall liability by 
R314.1m. In addition, losses of R30.7m were realised on the settlement of an interest rate swap by the South 
African operations. 

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

Finance costs
Finance costs increased by 2.5% to R2 574m (FY17: R2 510m). This was partly offset by the proceeds from the
Distribution Re-Investment Plans (DRIPs) offered by Growthpoint. The weighted average interest rate for RSA 
borrowings was 9.1% (FY17: 9.2%) (6.9% including Euro loans and cross currency interest rate swaps (CCIRS) 
(FY17: 7.4%)). The weighted average maturity of debt increased to 3.7 years (FY17: 3.0 years). Finance costs 
for SA increased by 4.3% mainly due to additional interest linked to investments into GWI and GPRE. Finance 
costs for GOZ decreased by 3.4% from R566.0m in FY17 to R547.0m in FY18. The interest cover ratio, where 
income from the equity-accounted investments and listed investments is included in the operating profit, 
increased to 3.7 times at FY18 (FY17: 3.5 times).

Finance income
Finance income increased by 30.6% to R904.0m (FY17: R692.0m). This was due to an increase in dividends from
GWI as well as incremental new investments into GWI and GPRE.

Acquisitions and commitments
Growthpoint acquired one retail property, the remainder of N1 City Mall, for R922.1m, two industrial properties, 
for R237.3m and two office properties, for R172.3m during the period for its RSA portfolio. The development and 
capital outlay for RSA of R2.1bn (FY17: R2.1bn) was for various projects undertaken in the period, of which 
the Discovery Head Office accounted for R302.0m for the completion of the development. 

Growthpoint has commitments outstanding for RSA developments totalling R1.6bn (FY17: R2.0bn) of which 
144 Oxford Street, Rosebank is the largest at R524.9m. These commitments also include the new Exxaro 
Head Office in Centurion at R333.1m.

GOZ acquired one industrial property for R525.9m (AUD48.6m) and it incurred development costs of R103.4m 
(AUD10.1m), situated at the Perth Airport. 

GOZ has commitments outstanding totalling R2.1bn (AUD204.2m)(FY17: R150.5m (AUD15.0m)). These commitments 
include new office developments at the Botanicca Corporate Park in Richmond, Victoria at R996.7m (AUD98.1m) 
and a new office acquisition of 836 Wellington Road, West Perth, WA at R927.5m (AUD91.3m).

Growthpoint's 50% development and capital expenditure at the V&A amounted to R295.0m (FY17: R557.6m) for 
the period. Growthpoint's share of the V&A's commitments outstanding at FY18 amounted to R110.2m 
(FY17: R220.3m). The largest include the Cruise Liner Terminal at R63.6m, Dock Road Junction at R27.6m 
and Battery Parkade at R13.4m.

Further investment in GWI
Growthpoint followed its rights in the GWI EUR340.0m capital raise in December 2017 and made an additional 
investment of R1.9bn (EUR113.8m) in GWI. This increased Growthpoint's interest to 29.0%.

GWI completed its strategic investment in GPRE resulting in a shareholding of 71.7% in December 2017. 

On 22 December 2017, GPRE completed the acquisition of three high-quality properties in Wroclaw, Gdansk and 
Katowice in Poland from Echo Polska Properties (EPP) for a total consideration of approximately EUR160.0m. 

Acquisition of GPRE
In June 2018, Growthpoint RSA directly acquired a 21.6% stake in the Warsaw Stock Exchange-listed GPRE, which 
is classified as an associate, for a consideration of R2.3bn (EUR150.0m). GPRE is a Polish real estate platform 
listed since April 2017 on the WSE. GPRE's portfolio consists of attractive premium properties, predominantly 
in the office sector, spanning Warsaw and other major cities across Poland, including Wroclaw, Gdansk, Katowice 
and Krakov. The acquisition was funded by a five-year USD-denominated Eurobond issued during FY18. A notional 
bargain purchase of R490m 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 GPRE and its aggregated assets and liabilities are shown below:
Total assets                           R18.0bn    
Total liabilities                       R6.8bn    
Bargain purchase                           R9m    
Consideration paid                      R2 340    
Percentage held                          21.6%    
                                    

Disposals and held-for-sale assets
Growthpoint disposed of 20 properties in the period (FY17: 17) for R1.5bn (FY17: R1.8bn), achieving a collective
R318.1m (FY17: R401.0m) profit on cost.

At FY18, ten RSA properties (FY17: three) valued at R2.5bn (FY17: R201.9m) and two (FY17: one) GOZ properties 
valued at R653m (AUD64.3m) (FY17: R1.0bn (AUD103.5m)) were held for sale.

GOZ disposed of two properties in the period (FY17: seven) with a book value of R1.7bn (AUD169.4m) (FY17: R1.7bn
(AUD166.4m)).

Arrears
Total RSA arrears at FY18 were R68.5m (FY17: R60.4m) with a provision for bad debts of R27.4m (FY17: R26.1m). 
Total RSA bad debt expenses were R17.3m (FY17: R13.2m).

Vacancy levels
At FY18 Growthpoint's vacancy levels as a percentage of its total portfolio GLA were:

                                                                            GLA                   Vacancy              
                                                                       m2             m2         %         %    
                                                                     FY18           FY17      FY18      FY17    
Retail                                                          1 390 878      1 405 021       3.6       3.6    
Office                                                          1 791 626      1 750 606       8.6       6.8    
Industrial                                                      2 254 812      2 266 957       4.0       3.1    
RSA total                                                       5 437 316      5 422 584       5.4       4.4    
GOZ                                                             1 003 444      1 053 148       1.1       0.8    
V&A Waterfront (50%)                                              231 171        223 016       1.8       0.7    
Total/average %                                                 6 671 931      6 698 748       4.7       3.7    


Vacancies remained the same in the retail sector but increased across the office and industrial sectors. 
Tenant retention remains a priority and we are driving it through various initiatives including the UNdeposit 
and SmartMove campaigns, as well as the launch of Growthpoint's resource efficient, sustainable Thrive Portfolio.

Equity raised
During the period Growthpoint issued 82.5m (FY17: 102.4m) shares and raised R2.2bn (FY17: R2.5bn) through 
its DRIP programme. The DRIP equity raised was used to finance Growthpoint's investment activities.

Borrowings and net working capital
At FY18, the consolidated loan-to-value ratio (LTV), measured by dividing the nominal value of interest-bearing
borrowings (net of cash) by the fair value of property assets including investment property held for sale, the
equity-accounted investments and the listed investments, was 35.2% (FY17: 35.0%). Growthpoint has consistently 
applied its policy for measuring the fair value of long-term interest-bearing loans and derivatives. There were 
no changes in valuation techniques, nor were there any transfers between level 1, level 2 and level 3 during 
the period.

Growthpoint had unused committed bank facilities of R5.8bn in RSA and R1.7bn (AUD170.0m) in Australia at FY18, 
which assures that it can meet its short-term commitments.

Changes in directorate
Mr HS Herman retired as a non-executive director on 14 November 2017.

Ms N Siyotula was appointed as a non-executive director with effect from 1 January 2018.

Ms O Chauke was appointed as executive human resources director on 26 June 2018.

Events after the reporting period
In line with IAS 10 Events after the 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.

On 18 July 2018, the Group announced that it had entered into a put and call option to acquire 836 Wellington Road,
West Perth, WA. The acquisition is scheduled to settle in October 2018 for a purchase price of AUD91m.

Prospects
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, will continue to ensure sustainable, quality 
earnings domestically, against the backdrop of a domestic economy where property fundamentals remain weak. 
Growthpoint's increased internationalisation has added further geographic exposure to our business. The 
contribution to distributable income from GOZ is expected to increase in line with guidance provided by 
GOZ and the recent weakness in the Rand would provide further upside. The direct investment into GPRE as 
well as the GWI acquisition of GPRE, provided GWI with a Polish footprint which further adds to the 
diversification and defensiveness of the investment opportunity. Large multinational tenants continue 
to be attracted to both Poland and Romania due to the young, educated, affordable and ambitious labour 
force, and as such GWI is expected to perform well. Notwithstanding the positive contributions expected 
from Growthpoint's offshore business, investments as well as the V&A, the Growthpoint Board remains 
concerned about the overall weakness in the South African economy and is of the view that, subject to 
no unforeseen circumstances arising, growth in the dividend per share for the financial year ending 
30 June 2019 will be approximately 4.5%. This forecast has not been subject to audit or review by the 
company's independent external auditor.

Final dividend
Notice is hereby given of the declaration of the final dividend number 65 of 107.40000 cents per share for 
the period ended 30 June 2018. Shareholders will be entitled to elect to reinvest 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 reinvestment alternative is subject to the Board, either itself or through a Board subcommittee 
appointed to set the pricing and terms of the share reinvestment alternative, having the discretion to 
withdraw the entitlement to elect the share reinvestment alternative should market conditions warrant 
such action. A withdrawal of the entitlement to elect the share reinvestment alternative would be 
communicated to shareholders before the publication of the finalisation announcement on 
Monday, 10 September 2018.

Other information: 
- Issued shares at 30 June 2018: 2 970 981 288 ordinary shares of no par value.
- Income tax reference number of Growthpoint: 9375/077/71/7.
- Treasury shares at 30 June 2018: 25 470 569.

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 the 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 abovementioned 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 20%, the net
amount due to non-resident shareholders is 85.92000 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 Services.

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

Salient dates and times                                                                                  2018                       
Circular and form of election posted to shareholders and announced on SENS                Monday, 3 September        
Last date for Growthpoint to withdraw the entitlement for shareholders 
to elect to participate in the share reinvestment alternative before the 
publication of the announcement of the share alternative issue price and 
finalisation information on SENS                                                         Monday, 10 September       
Announcement of share reinvestment alternative issue price and finalisation 
information published on SENS                                                           Tuesday, 11 September      
Last day to trade (LDT) cum dividend                                                    Tuesday, 18 September      
Shares to trade ex dividend                                                           Wednesday, 19 September    
Listing of maximum possible number of share alternative shares 
commences on the JSE                                                                     Friday, 21 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, 21 September       
Record date                                                                              Friday, 21 September       
Announcement of results of cash dividend and share reinvestment 
alternative published on SENS                                                           Tuesday, 25 September      
Cheques posted to certificated shareholders and accounts credited by 
CSDP or broker to dematerialised shareholders electing the cash alternative on          Tuesday, 25 September      
Share certificates posted to certificated shareholders and accounts 
credited by CSDP or broker to dematerialised shareholders electing 
the share reinvestment alternative on                                                  Thursday, 27 September     
Adjustment to the maximum number of shares listed on or about                            Friday, 28 September       
Notes:
1. Shareholders electing the share reinvestment 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, 19 September 2018 and the close of trade on Friday, 22 September 2018.

By order of the Board

Growthpoint properties Limited
29 August 2018

Directors
JF Marais (Chairman), LN Sasse* (Group Chief Executive Officer), EK de Klerk* (Chief Executive Officer South Africa),
G Volkel* (Group Financial Director), O Chauke* (Human Resources Director), MG Diliza, PH Fechter, LA Finlay, 
JC Hayward, SP Mngconkola, R Moonsamy, NBP Nkabinde, N Siyotula, FJ Visser 

*Executive    
                 
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

Registered office
The Place, 1 Sandton Drive, Sandton, 2196 
PO Box 78949, Sandton, 2146

Transfer Secretary
Computershare Investor Services (Pty) Limited
(Registration number 2004/003647/07)
Rosebank Towers, 15 Biermann Avenue, Rosebank, Johannesburg, 2196
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


Statement of profit or loss and other comprehensive income
For the year ended 30 June 2018
                                                                                  2018          2017    
                                                                   Notes            Rm            Rm    
Revenue, excluding straight-line lease income adjustment                        10 976        10 716    
Straight-line lease income adjustment                                              (50)           39    
Total revenue                                                                   10 926        10 755    
Property-related expenses                                                       (2 366)       (2 245)    
Net property income                                                              8 560         8 510    
Other administrative and operating overheads                                      (437)         (416)    
Operating profit                                                                 8 123         8 094    
Equity-accounted investment profit - net of tax                                    711           369    
Fair value adjustments, capital items and other charges                          1 407         1 850    
Finance and other investment income                                    1           904           692    
Finance expense                                                                 (2 574)       (2 510)    
Profit before taxation                                                           8 571         8 495    
Taxation                                                                          (666)          (48)    
Profit for the year                                                              7 905         8 447    
Other comprehensive income                                                                              
Items that may subsequently be reclassified to profit or loss                                           
Translation of foreign operations                                                  241        (1 571)    
Total comprehensive income for the year                                          8 146         6 876    
Profit attributable to:                                                          7 905         8 447    
Owners of the company                                                            6 663         7 524    
Non-controlling interests                                                        1 242           923    
Total comprehensive income attributable to:                                      8 146         6 876    
Owners of the company                                                            6 803         6 507    
Non-controlling interests                                                        1 343           369    
                                                                                                        
                                                                                 Cents         Cents    
Basic earnings per share                                                        299.14        267.72    
Diluted earnings per share                                                      228.00        266.21    


Statement of financial position
As at 30 June 2018
                                                                                  2018          2017    
                                                                                    Rm            Rm    
Assets                                                                                                  
Cash and cash equivalents                                                        2 320           613    
Trade and other receivables                                                      3 645         3 214    
Investment property classified as held for sale                                  3 180         1 241    
Investment property held for trading and development                               131             -    
Derivative assets                                                                  476           356    
Listed investments                                                                 801           226    
Fair value of property assets                                                  109 046       108 201    
Fair value of investment property for accounting purposes                      106 543       105 641    
Straight-line lease income adjustment                                            2 503         2 560    
Long-term loans granted                                                            370           709    
Equity-accounted investments                                                    15 096         9 920    
Equipment                                                                           12            15    
Intangible assets                                                                2 279         2 362    
Total assets                                                                   137 356       126 857    
Liabilities and Equity                                                                                  
Liabilities                                                                                             
Trade and other payables                                                         2 305         2 572    
Derivative liabilities                                                             741           587    
Taxation payable                                                                    72            44    
Interest-bearing borrowings                                                     48 234        42 568    
Deferred tax liability                                                           2 844         2 332    
Total liabilities                                                               54 196        48 103    
Shareholders' interests                                                         75 273        72 045    
Share capital                                                                   47 092        44 876    
Retained income                                                                  3 191         2 886    
Other reserves                                                                  24 990        24 283    
Non-controlling interest                                                         7 887         6 709    
Total liabilities and equity                                                   137 356       126 857    


Statement of changes in equity
For the year ended 30 June 2018
                                                                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 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) 
Total comprehensive income                                                                                                 
Profit after taxation                                  -            -               -          -           -            -  
Other comprehensive income                             -          140               -          -           -            -  
Transactions with owners recognised                                                                                        
directly in equity:                                                                                                        
Contributions by and distributions                                                                                         
to owners:                                                                                                                 
Shares issued                                      2 155            -               -          -           -            -  
Transfer non-distributable items to NDR                -            -             (71)         -       1 007         (429)  
Share-based payment transactions                      61            -               -          -           -            -  
Dividends declared                                     -            -               -          -           -            -   
Changes in ownership interest:                                                                                              
Change of ownership in Healthcare                      -            -               -          -           -            -  
Rights issue and acquisitions - GOZ                    -            3               -          -           -            -  
Balance at 30 June 2018                           47 092        1 715             721        314      25 036       (2 858) 
                                                                                                                           
                                                                                                                           
                                                                                                                           
Dividend per share                                                                                                         

Statement of changes in equity (continued)
For the year ended 30 June 2018
                                        Non-distributable reserves (NDR)
                                                               
                                                                                                                                        
                                                                    Fair                                                         
                                                                   value                                                         
                                                                 adjust-                                                     
                                           Share-                   ment                                           Non-               
                                            based              on listed      Total   Retained     Share-   controlling                  
                                         payments   Reserves     invest-      other   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 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    
Total comprehensive income                                                                                                           
Profit after taxation                           -          -           -          -      6 663      6 663         1 242     7 905    
Other comprehensive income                      -          -           -        140          -        140           101       241    
Transactions with owners recognised                                                                                       
directly in equity:                                                                                                       
Contributions by and distributions                                                                                        
to owners:                                                                                                                
Shares issued                                   -          -           -          -          -      2 155             -     2 155    
Transfer non-distributable items to NDR       (40)         -          63        530       (530)         -             -         -    
Share-based payment transactions               34          -           -         34          -         95             -        95    
Dividends declared                              -          -           -          -     (5 828)    (5 828)         (513)   (6 341)    
Changes in ownership interest:                                                                                                        
Change of ownership in Healthcare               -          -           -          -          -          -           285       285    
Rights issue and acquisitions - GOZ             -          -           -          3          -          3            63        66    
Balance at 30 June 2018                       165        (12)        (91)    24 990      3 191     75 273         7 887    83 160    
                                                                                                                                     
                                                                                                                   2018      2017    
                                                                                                                  Cents     Cents    
Dividend per share                                                                                                208.6     195.8 


Statement of cash flows
For the year ended 30 June 2018
                                                                                  2018          2017    
                                                                                    Rm            Rm    
                                                                                                        
Cash from operations                                                             8 060         7 580    
Interest paid                                                                   (2 574)       (2 438)    
Finance and other investment income received                                       312           105    
Taxation paid                                                                     (126)          (84)    
Distribution to shareholders                                                    (6 341)       (5 766)    
Cash flows from operating activities                                              (669)         (603)    
Net cash from investing activities                                              (5 241)       (8 637)    
Net cash from financing activities                                               7 386         8 993    
Effect of exchange rate changes on cash and cash equivalents                       231           (41)    
Movement in cash and cash equivalents                                            1 707          (288)    
Cash and cash equivalents at beginning of year                                     613           901    
Cash and cash equivalents at end of year                                         2 320           613    

Segmental analysis
For the year ended 30 June 2018

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

Segment                         Brief description of segment
Retail                          The Growthpoint retail portfolio consists of 50 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 179 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 225 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 
                                include retail, office, fishing and industrial, hotel and residential as well 
                                as undeveloped bulk.    
Central and Eastern Europe      The Central and Eastern Europe portfolio consists of 48 properties which include 
                                mostly modern A-grade office properties and industrial properties as well as a 
                                residential property complex.

Geographic segments
In addition to the main reportable segments, the group also includes a geographical analysis of net property 
income, excluding straight-line lease income adjustment and investment property.

The following geographic segments have been identified:
South Africa
Australia
Central and Eastern Europe
V&A Waterfront

Segmental analysis (continued)                            
                                                                       2018
                                                                                                        Central
                                                            Total                                           and       
                                                            South               Total as          V&A   Eastern           
                            Retail   Office   Industrial   Africa   Australia   reported   Waterfront    Europe     Total 
                                Rm       Rm           Rm       Rm          Rm         Rm           Rm        Rm        Rm 
Profit or loss disclosures                                                                                                  
Revenue excluding           
straight-line                                                                                                             
lease adjustment             3 244    3 779        1 420    8 443       2 533     10 976          813       207    11 996   
Property-related expenses     (834)    (848)        (325)  (2 007)       (359)    (2 366)        (242)      (76)   (2 684)   
Net property income          2 410    2 931        1 095    6 436       2 174      8 610          571       131     9 312   
Other administrative and                                                                                                  
operating overheads                                          (309)       (128)      (437)         (30)      (28)     (495)   
Equity-accounted investment                                                                                               
profits - net of tax                                          711           -        711            -         -       711   
Fair value adjustment on                                                                                                  
investment property           (439)      53          250     (136)      1 671      1 535          375       100     2 010   
Fair value adjustments      
(other than                                                                                                               
investment property)                                         (120)       (113)      (233)           -         -      (233)  
Capital items and           
other charges                                                (190)         245        55           87        (4)      138    
Finance and investment      
income                                                        901           3        904           62         5       971   
Finance expense                                            (2 027)       (547)    (2 574)         (24)      (16)   (2 614)   
Consolidated profit         
before taxation                                             5 266       3 305      8 571        1 041       188     9 800   
Assets                                                                                                                      
Cash and cash equivalents                                   2 000         320      2 320          248     2 708     5 276   
Trade and other receivables                                 2 966         679      3 645           75       484     4 204   
Investment property         
classified                                                                                                                
as held for sale                 -    2 187          340    2 527         653      3 180            -         -     3 180   
Investment property         
held for                                                                                                                  
trading and development          -      131            -      131           -        131            -         -       131   
Derivative assets                                             476           -        476            -         -       476   
Listed investments                                            801           -        801            -         -       801   
Fair value of               
property assets             29 878   33 134       13 094   76 106      32 940    109 046        9 141    11 564   129 751   
Long-term loans granted                                       370           -        370            -         -       370   
Equity-accounted            
investments                                                15 096           -     15 096            -        40    15 136   
Equipment                                                       3           9         12            -         -        12   
Intangible assets                                           2 279           -      2 279            -        57     2 336   
Total assets                                              102 755      34 601    137 356        9 464    14 853   161 673   
Liabilities                                                                                                                 
Trade and other payables                                    1 665         640      2 305          188       249     2 742   
Derivative liabilities                                        671          70        741            -         -       741   
Taxation payable                                                -          72         72            -         -        72   
Interest-bearing borrowings                                35 699      12 535     48 234          170     6 594    54 998   
Deferred tax liability                                      2 838           6      2 844            -       538     3 382   
Total liabilities                                          40 873      13 323     54 196          358     7 381    61 935   

                                                                           2017
                                                                                                        Central
                                                            Total                                           and           
                                                            South               Total as          V&A   Eastern           
                            Retail   Office   Industrial   Africa   Australia   reported   Waterfront    Europe     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                                                                                       
profits - 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    
Investment property        
held for                                                                                      
trading and development          -        -            -        -           -          -            -         -         -    
Derivative assets                                             356           -        356            -         -       356    
Listed investments                                            226           -        226            -         -       226    
Fair value of              
property assets             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 


Distributable earnings reconciliation                                                                        
                                                                                2018                 2017    
                                                                                  Rm                   Rm    
Revenue, excluding straight-line lease income adjustment                      10 976               10 716    
Property-related expenses                                                     (2 366)              (2 245)    
Other administrative and operating overheads                                    (437)                (416)    
Net interest                                                                  (1 670)              (1 818)    
Finance and other investment income                                              904                  692    
Finance expense                                                               (2 574)              (2 510)    
Antecedent dividends                                                              33                   45    
GWI dividend declared after year-end, based on FY18 earnings                     157                    -    
GPRE dividend declared after year-end, based on FY18 earnings                     64                    -    
Non-controlling portion of distribution                               
(excluding fair value adjustments) - GOZ                                        (513)                (502)    
Distributable income from GOZ retained (including NCI's portion)                 (22)                (165)    
Realised foreign exchange gain                                                    46                   31    
Current normal taxation                                                         (160)                 (98)    
Distributable earnings                                                         6 108                5 548    
Distributions                                                                                           
Total dividend                                                                                        
Distributable earnings Rm                                                      6 108                5 548    
Actual net number of shares in issue                                   2 945 510 719        2 860 702 595    
Distribution per share                                                         208.6                195.8    
Interim taxable dividend Cents                                                 101.2                 95.0    
Final taxable dividend Cents                                                   107.4                100.8    
                                                                                                           
                                                                                   Number of shares
                                                                                2018                 2017    
Shares issued during the year:                                                                               
Issued ordinary shares at the beginning of year                        2 888 462 582        2 786 093 366    
Effect of shares issued                                                   82 518 706          102 369 216    
Share in issue at end of year                                          2 970 981 288        2 888 462 582    
Effect of treasury shares held                                           (25 470 569)         (27 759 987)    
Net shares in issue at end of year                                     2 945 510 719        2 860 702 595    

                                                                                2018                 2017    
                                                                               Cents                Cents    
Net asset value*                                                                                             
Net asset value per share                                                      2 556                2 518    
Tangible net asset value per share                                             2 575                2 517    
                                                                                                             
Net asset value per share is reconciled to tangible               
net asset value per share as follows:                             
                                                                                  Rm                   Rm    
Net asset value attributable to shareholders                                  75 273               72 045    
Less: Net effect of business acquisitions and other intangibles                  565                 (30)    
Intangible assets                                                             (2 279)              (2 362)    
Deferred tax liability                                                         2 844                2 332    
Tangible net asset value                                                      75 838               72 015    
* This information has not been audited by Growthpoint's independent external auditor.

Key reporting ratios*
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.                                              
                                                                                          Group                         
                                                                                2018                 2017    
                                                                                   %                    %    
Property cost-to-income ratio                                                                                
Gross                                                                          31.11                30.42    
Net                                                                            16.64                16.56    
Based on IFRS reported figures                                                 21.56                20.95    
Property cost-to-income ratio is based on the total property-related 
expenses divided by the revenue, excluding straight-line lease 
income adjustments. The figures are adjusted for gross, net and 
IFRS reported expenses.                                           

Operating cost-to-income ratio                                                                               
Gross                                                                           4.17                 4.15    
Net                                                                             3.98                 3.88    
Based on IFRS reported figures                                                  3.98                 3.88    
Operating cost-to-income ratio is based on the total operating 
expenses divided by the revenue, excluding straight-line lease 
income adjustments. The figures are adjusted for gross, net and 
IFRS reported expenses.

Total cost-to-income ratio
Gross                                                                          34.72                34.00    
Net                                                                            20.87                20.66    
Based on IFRS reported figures                                                 25.54                24.83    
Total cost-to-income ratio is based on the total expenses divided 
by the revenue, excluding straight-line lease income adjustments. 
The figures are adjusted for gross, net and IFRS reported expenses.

Interest-cover ratio                                                            3.65                 3.51    
Interest-cover ratio (excluding GOZ)                                            3.62                 3.43    
Interest-cover ratio for Growthpoint is based on the operating profit 
excluding straight-line lease income adjustment plus the investment 
income from equity-accounted investments divided by the finance costs, 
after deducting finance income from banks and long-term loans.                           

Loan-to-value ratio                                                            35.17                34.98    
Loan-to-value ratio (excluding GOZ)                                            35.37                33.40    
Loan-to-value ratio for Growthpoint is based on the nominal value of debt (net of cash), divided by the 
fair value of property assets, including investment property held for sale, equity-accounted 
investments and listed investments.
* This information has not been audited by Growthpoint's independent external auditor.

Notes

Note 1: Finance and other investment income                                   
                                                                                2018                 2017    
                                                                                  Rm                   Rm    
Finance income                                                                                               
Banks                                                                             45                   23    
Long-term loans                                                                   46                   19    
Other                                                                             54                    -    
                                                                                 145                   42    
Investment income                                                                                            
Dividends received from equity-accounted investments                             759                  605    
Other                                                                              -                   45    
                                                                                 759                  650    
Total finance and investment income                                              904                  692    

Note 2: Headline earnings per share                                                                                       
Reconciliation between basic earnings, diluted earnings and headline earnings
                                                                 Gross                      Total                    
                                                           2018          2017          2018          2017    
                                                             Rm            Rm            Rm            Rm    
Profit for the year                                                                   6 663         7 524    
Bargain purchase                                         1 407*        1 850*            (9)          (78)    
Fair value adjustments on investment property            1 407*        1 850*        (2 006)       (2 397)    
Fair value adjustment: net of straight-lining 
lease adjustment                                                                     (1 290)       (1 993)    
NCI portion of fair value adjustments                                                  (716)         (404)    
Headline, basic and diluted earnings                                                  4 648         5 049    
* Both the bargain purchase and fair value adjustment on investment property are included in 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.                                                            

Classification of financial assets and liabilities
                                                                   Loans and        Outside                 
                                 Held at         Designated            other          scope                 
                              fair value      at fair value      receivables      of IAS 39         Total    
                                      Rm                 Rm               Rm             Rm            Rm       
Assets                                                                                                       
2018                                                                                                         
Cash and cash equivalents              -                  -            2 320              -         2 320    
Trade and other receivables            -                  -            2 836            809         3 645    
Derivative assets                    476                  -                -              -           476    
Listed investments                     -                801                -              -           801    
Long-term loans granted                -                370                -              -           370    
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    
                                                                                                             
Liabilities                                                                                                  
2018                                                                                                         
Trade and other payables               -                  -            2 074            231         2 305    
Derivative liabilities               741                  -                -              -           741    
Taxation payable                       -                  -                -             72            72    
Interest-bearing borrowings            -             48 234                -              -        48 234    
Deferred tax liabilities               -                  -                -          2 844         2 844    
2017                                                                                                         
Trade and other payables               -                  -            2 302            270         2 572    
Derivative liabilities               587                  -                -              -           587    
Taxation payable                       -                  -                -             44            44    
Interest-bearing borrowings            -             42 568                -              -        42 568    
Deferred tax liabilities               -                  -                -          2 332         2 332    
                                
Fair value estimation
Fair value measurement of assets and liabilities
The table below includes only those assets and liabilities that are measured at fair value including 
non-recurring items measured at fair value:
                               2018                                       2017                             
                             Fair value   Level 1   Level 2   Level 3    Fair value    Level 2    Level 3    
                                     Rm        Rm        Rm        Rm            Rm         Rm         Rm    
Assets                                                                                                       
Recurring fair                                                                                  
value measurement                                                                               
Fair value of                                                                                   
property assets                 109 046         -         -   109 046       108 201          -    108 201    
Listed investments                  801       797         -         4           226          -        226    
Long-term loans                                                                                 
granted                             370         -         -       370           709          -        709    
Derivative assets                   476         -       252       224           356        249        107    
Non-recurring fair                                                                              
value measurement                                                                               
Non-current assets                                                                              
held for sale                     3 180         -         -     3 180         1 241          -      1 241    
Total assets measured                                                                           
at fair value                   113 873       797       252   112 824       110 733        249    110 484    
Liabilities                                                                                                  
Recurring fair                                                                                  
value measurement                                                                               
Interest-bearing                                                                                
borrowings                       48 234     5 772    42 462         -        42 568     42 568          -    
Derivative liabilities              741         -       511       230           587        556         31    
Total liabilities                                                                               
measured at fair value           48 975     5 772    42 973       230        43 155     43 124         31    
                                                                                                                         
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
                                                                         2018                               
                                                Property    Listed   Long-term                                 
                                                  assets   invest-       loans   Derivative    Derivative      
                                                      Rm     ments     granted       assets   liabilities      
                                                                Rm          Rm           Rm            Rm      
Opening balance                                  109 442       226         709          107           (31)     
Gain/(loss) from                                                                                            
fair value adjustments                                                                                      
and translation of                                                                                          
foreign operations                                 2 005         -          12          117          (199)     
Accrued interest                                       -         -          71            -             -      
Acquisitions                                       3 978         -           -            -             -      
Disposals                                         (3 199)     (222)          -            -             -      
Advance                                                -         -          77            -             -      
Settlements                                            -         -        (499)           -             -      
Closing balance                                  112 226         4         370          224          (230)     

Movement in level 3 instruments (continued)
                                                                      2017
                                                            Listed   Long-term   Derivative    Derivative    
                                                Property   invest-       loans       assets   liabilities    
                                                  assets     ments     granted           Rm            Rm    
                                                      Rm        Rm          Rm                               
Opening balance                                  104 690       440         605            -             -    
Gain/(loss) from                                                                
fair value adjustments                                                          
and translation of                                                              
foreign operations                                (1 086)     (214)        (25)         107           (31)   
Accrued interest                                       -         -          78            -             -    
Acquisitions                                       9 552         -           -            -             -    
Disposals                                         (3 714)        -           -            -             -    
Advance                                                -         -         463            -             -    
Settlements                                            -         -        (412)           -             -    
Closing balance                                  109 442       226         709          107           (31)   
                             
                                                                                                                     
Fair value estimation
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 and significant inputs
Level 2 instruments
Interest-bearing borrowings
                                    Valuation                                 Significant unobservable
Description                         technique                                 inputs                            
Interest-bearing borrowings         Valued by discounting future cash         Credit margins: 0.46% to 3.60%
                                    flows using the South African swap        (FY17: 0.43% to 3.60%)
                                    curve plus an 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
                                    Valuation                                 Significant unobservable
Description                         technique                                 inputs                   
Forward exchange contracts          Valued by discounting the forward         Not applicable      
                                    rates applied at year end to the 
                                    open hedged positions.
Interest rate swaps                 Valued by discounting the future cash     Not applicable
                                    flows 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          Not applicable
                                    cash flows using the basis swap curve of 
                                    the respective currencies at the dates 
                                    when the cash flows will take place.

Valuation techniques and significant inputs
Level 3 instruments
In terms of the group's policy, at least 75% of the fair value of investment properties should be 
determined by an external, independent valuator, 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 was valued by Growthpoint's qualified internal valuers.

The South African properties were valued at FY18 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 Bate            MSc, BSc Land Econ (UK), MRICS, MIV (SA), professional valuer         
Eris Property Group 
(Pty) Limited             C Everatt         BSc (Hons) Estate Management, MRICS, MIV (SA), professional valuer    
Jones Lang LaSalle        J Karg            BSc, MRICS, MIV (SA), professional valuer                             
Knight Frank              A Arbee           NDip (Reas Estate in Prop Val), associate professional valuer         
Rode & Associates         K Scott           BCom (Hons), professional valuer                                      
Spectrum                  PL O'Connell      NDip (Prop Val), MRICS, professional valuer                           
Sterling                  AS Greybe-Smith   BSc (Hons), MIV (SA), professional associate valuer                   
Wolffs Valuation 
Services (Pty) Limited    S Wolffs          NDip (Prop Val), professional associate valuer                        

The Australian properties were valued at FY18 using the discounted cash flow of future income streams 
method by Savills, Jones Lang LaSalle, Urbis, Knight Frank, CBRE, M3property and Colliers who 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 were in the following ranges for the group's portfolio of properties:

Investment property
                                           Significant unobservable inputs and range of estimates used
                                                                Exit capitalisation      Capitalisation    
Description         Valuation technique   Discount rate(%)                  rate(%)             rate(%)    
Retail sector       Discounted cash            12.8 - 18.0               6.8 - 12.0          6.8 - 13.0    
Office sector       flow model                 12.8 - 16.0               7.8 - 10.0          7.5 - 10.0    
Industrial sector                              13.5 - 18.0               8.0 - 14.0          8.0 - 13.5    
GOZ office                                       6.8 - 9.0                6.0 - 8.5          5.3 - 14.4    
GOZ industrial                                   6.8 - 8.8               6.0 - 10.0           5.8 - 8.8    

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).

Long-term loans granted
                                    Valuation                                 Significant unobservable      
Description                         technique                                 inputs                   
Acucap Unit Purchase Scheme         Valued by discounting future cash         Counterparty credit risk
                                    flows using the South African swap 
                                    curve at the dates when the cash 
                                    flows will take place.                                       
Roeland Street                      Valued by discounting future cash         Counterparty credit risk
Investment 2 (Pty) Limited          flows using a floating rate that is 
                                    applicable to this loan including 
                                    an estimated counterparty credit 
                                    spread.                   

Derivative assets and liabilities
                                    Valuation                                 Significant unobservable    
Description                         technique                                 inputs                   
Cross-currency interest rate swaps  Valued by discounting the future          Credit curve        
                                    cash flows using the basis swap 
                                    curve of the respective currencies 
                                    at the dates when the cash flow 
                                    will take place.                           

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

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