Stock Exchange News Service

Investment strategy update and joint venture agreement

MAS Real Estate Inc.
Registered in the British Virgin Islands
Registration number 1750199
Registered as an external company in the Republic of South Africa
Registration number 2010/000338/10
JSE share code: MSP
ISIN: VGG5884M1041
(“MAS” or the “Company”)



     As MAS moves closer to achieving its near-term core income goals, the board has considered the medium to
     long-term enhancement of the Company’s sustainable earnings through the addition of various value
     accretive developments, asset management and other opportunistic projects in various markets. The directors
     have concluded it is in the Company’s interest to focus not solely on income returns, but on a strategy of
     delivering attractive total returns, while continuing to distribute all available income profits, and the re-
     investment of capital profits remaining at the discretion of the directors.

     There are still good acquisition opportunities in the main jurisdictions in which MAS currently operates, but the
     board of MAS is of the view that these markets are moving closer, in some sectors, to the top of the capital
     value cycle. Therefore while income returns should be secure, the opportunity for capital growth in these
     markets, other than through active management and development, are muted.

     Having evaluated other Western European jurisdictions and the broader European Economic Area, the board
     is of the opinion that the opportunities now available in Central and Eastern Europe (“CEE”), and prospects for
     growth, on a risk-adjusted basis, warrant investment with the objective of building a real estate portfolio that is
     balanced across the wider European market.


     MAS has been considering these markets for some time now. As a first stage of implementing the new
     strategy and in order to best access CEE opportunities, MAS has entered into a joint venture (the “JV”) with
     Prime Kapital Limited (“Prime Kapital”), a real estate development and investment business established by
     Martin Slabbert and Victor Semionov, supported by a strong team with diverse skills and experience, including
     property development, financing and legal resources. The team has significant experience and a proven track
     record in real estate development and management in CEE.

     Conclusion of this JV puts MAS on a strategic long-term path to build a real estate portfolio that is balanced
     across the wider European market. In pursuing this objective MAS will continue to add to its existing Western
     European investment base as it encounters value enhancing investment and development opportunities,
     complementing this facet of the portfolio with the diversification that MAS gains through the JV.


     The JV, under the operational management of Martin and Victor, intends to build a regional CEE commercial
     property business of scale that will displace old assets with modern retail schemes, offices and industrial
     facilities by developing, owning and managing high quality real estate in dominant locations that will generate
     growing earnings in euros from long-term leases.


     The market opportunity in CEE is compelling.

     The JV offers many benefits to MAS, including the following:

     i.     Access to high growth, euro denominated jurisdictions, with improving capital market and investor
            sentiment and sufficient scale to significantly impact upon MAS’ future growth potential;
     ii.    Access to prime assets with higher income and capital returns, and growth in such returns, that are not
            readily available at this point in the cycle in Western European markets;
     iii.   Access to an experienced team with proven delivery in the CEE market, in a manner that ensures MAS’
            exclusive access to them for this investment strategy (development and redevelopment of commercial

              real estate assets in CEE);
        iv.   Strong alignment of interest through Prime Kapital’s long-term co-investment; and
        v.    Speed to market, given the experience of the management team and established pipeline.


        There are no outstanding conditions precedent relating to the JV.

        The investment commitments in respect of the joint venture align the interests of the JV partners as follows:
        1. Prime Kapital, as general partner, has committed to invest an initial €30 million for ordinary equity in the
           JV, for a 60% equity interest.
        2. MAS has committed to invest an initial €20 million for ordinary equity in the JV, for a 40% equity interest.
        3. MAS has committed to invest an additional €100m in the JV, with an option to invest a further €100m,
           both amounts by way of subscription for preference shares to be drawn down by the JV over a four year

       MAS has structured its financial commitments to the JV having regard to its available funding over the four year
       draw down period.

       MAS is listed on the Euro MTF Market of the Luxembourg Stock Exchange and on the Main Board of the
       Johannesburg Stock Exchange.

2 March 2016

For further information please contact:
Helen Cullen, Company Secretary, MAS Real Estate Inc.                               +44 1624 625 000
Java Capital, JSE Sponsor                                                           +27 11 722 3050
Andrew Smith, M Partners, Luxembourg                                                +352 263 868 610

Date: 02/03/2016 01:30:00 
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