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REDEFINE PROPERTIES LIMITED - Condensed unaudited group results for the six months ended 28 February 2018

Release Date: 07/05/2018 07:05
Code(s): RDF     PDF:  
Wrap Text
Condensed unaudited group results for the six months ended 28 February 2018

Redefine Properties Limited
(Incorporated in the Republic of South Africa)
Registration number: 1999/018591/06
JSE share code: RDF ISIN: ZAE000190252
(Redefine or the Company or the Group)
(Approved as a REIT by the JSE)

Condensed unaudited
GROUP RESULTS
for the six months ended 28 February 2018

Highlights
Operating margin maintained at 82.7%
Local developments in progress total R5.9 billion
LTV lowered to 40.1%
47 Learners enrolled for 2018
Gold SAFMA award for solar PV implementation

Commentary
Profile
Redefine is a leading South African-based Real Estate Investment Trust (REIT), with a diverse, internally
managed property asset platform valued at R85.6 billion (FY17: R84.1 billion). Redefine's portfolio is
anchored domestically in directly held retail, office and industrial properties, and is complemented by
substantial property investments in the United Kingdom (UK), Poland and Australia.

Redefine's primary goal is to grow and improve cash flows which will deliver quality earnings, growth
in distributions, and sustained long-term growth in total returns for shareholders.

Redefine is listed on the Johannesburg Stock Exchange (JSE), has a market capitalisation of
R66.8 billion (FY17: R61.8 billion) and is ranked in the JSE Top 40 index. By volume, Redefine shares
are among the most actively traded on the JSE, making it a highly liquid single entry point for investors
to gain exposure to domestic and multiple international real estate markets.

At 28 February 2018, Redefine's diversified local property assets were valued at R68.6 billion
(FY17: R68.1 billion). The Group's international real estate investments, valued at R17.0 billion
(FY17: R16.0 billion) represented 19.9% (FY17: 19.0%) of total property assets, providing geographic
diversification into the UK, Polish and Australian markets.

Financial results
The Redefine Board has declared a distribution of 47.30 (HY17: 44.82) cents per share for the
six months ended 28 February 2018, an increase of 5.5% (HY17: 7.5%) on the comparable period of
the previous year, which is in line with market guidance. Total revenue and gross distributable income
showed growth of 9.6% (HY17: 8.5%) and 8.6% (HY17: 24.8%) respectively, continuing to benefit from a
number of substantial quality acquisitions made in recent years.

Redefine's property portfolio contributed 98.0% (HY17: 99.6%) of total revenue, with minimal income
from listed securities 2.0% (HY17: 0.4%).

Operating costs remained stable at 33.9% (HY17: 33.9%) of contractual rental income. Net of electricity
and utility recoveries, operating costs were 17.3% (HY17: 17.4%) of contractual rental income.
The cost-to-income ratios are calculated in accordance with SA REIT Association's Best Practice Recommendations.

Redefine's international property investments contributed 25.3% (HY17: 22.7%) of distributable income.

Changes in fair value
The Group's property portfolio was independently valued by external valuers at 28 February 2018
resulting in a net increase in value of R1.3 billion (HY17: R156.2 million). In terms of IAS 40 and
IFRS 13, Redefine's investment properties are measured at fair value through profit or loss using
valuation inputs which are categorised as level 3 on the fair value hierarchy. There were no transfers
between levels 1, 2 and 3 during the period.

Exchangeable bonds were fair valued at 28 February 2018 which resulted in a R174.5 million
(HY17: R433.5 million) decrease in the liability. These exchangeable bonds are measured at fair value
through profit and loss. The fair value is determined with reference to the Bloomberg Valuation Service
price, and has been classified as level 1.

The fair value of the investment in listed securities decreased by R257.7 million
(HY17:  R152.1  million  increase) during the period. The Group's derivatives, which protect the
Group against adverse movements in interest and foreign exchange rates, were valued using the
swap curve and forward pricing methods respectively, resulting in a decrease of R397.1 million
(HY17: R53.6 million) in the Group's liabilities. In terms of IAS 39 and IFRS 13, Redefine's listed securities
investments and derivatives are measured at fair value through profit or loss and are categorised as
level 1 and level 2 respectively.

The balance of the fair value movements relate to foreign exchange losses on foreign unlisted
investments of R11.8 million (HY17: Rnil) and the profit on dilution of our equity accounted investments
of R43.5 million (HY: R107.5 million).

Property portfolio
The active portfolio vacancy rate remained stable during the period to 4.7% (FY17: 4.6%). Leases
covering 269 209m(2) (HY17: 171 208m(2)) were renewed during the period at an average rental increase
of 0.3% (HY17: 3.1%) while the tenant retention rate was a pleasing 94.7% (HY17: 86.0%). A further
224  786m2 (HY17: 205  213m(2)) was let across the portfolio. Net arrears amounted to R76.0 million
(HY17: R73.3 million), representing 10.1% (HY17: 9.4%) of gross monthly rental.

GEOGRAPHIC SPREAD BY GLA          
Gauteng                                                                                       71%
Cape                                                                                          16%
KwaZulu-Natal                                                                                  6%
Other                                                                                          7%
                  
GEOGRAPHIC SPREAD BY VALUE                  
Gauteng                                                                                       72%
Cape                                                                                          18%
KwaZulu-Natal                                                                                  5%
Other                                                                                          5%
                  
SECTORAL SPREAD BY GLA                  
Office                                                                                        28%
Retail                                                                                        30%
Industrial                                                                                    41%
Specialised                                                                                    1%
                  
SECTORAL SPREAD BY VALUE                  
Office                                                                                        37%         
Retail                                                                                        41%
Industrial                                                                                    20%
Specialised                                                                                    2%
        
LEASE EXPIRY PROFILE BY GLA
Figures in m2                       Office      Retail   Industrial    Specialised        Total
Monthly                               91 186      54 446       15 765              -      161 397 
2018                                  57 508      59 333       98 287              -      215 128 
2019                                 175 795     175 205      191 554              -      542 554 
2020                                 232 920     209 326      228 259             93      670 598 
2021                                 148 258     193 236      122 619         27 233      491 346 
2022                                 126 783     201 888      234 550          1 019      564 240 
Beyond 2022                          268 357     390 636      898 928              -    1 557 921 
Vacancy                              198 951      78 720       57 146            992      335 809 
                                   1 299 758   1 362 790    1 847 108         29 337    4 538 993 
VACANCY PER SECTOR
                                                 Strategic vacancies*
                                                Vacant
                       28 February 2018     properties           Vacant
                       before strategic          under       properties   28 February   31 August
                              vacancies  redevelopment    held-for-sale          2018        2017
                                      %              %                %             %           %
Office                             15.3            1.9              5.3           8.1         8.1
Retail                              5.8            1.4                -           4.4         3.3
Industrial                          3.1              -              0.4           2.7         3.3
Specialised                         3.4            3.4                -             -           -
                                    7.4            1.0              1.7           4.7         4.6
* Strategic vacancies include properties held-for-sale and properties under development.

                                                                        28 February   28 February
                                                                               2018          2017
                                                                                  %             %
Property cost-to-income ratios                           
Gross cost-to-income ratio                                                     33.9          33.9
Net cost-to-income ratio                                                       17.3          17.4
Total cost-to-income ratios                           
Gross cost-to-income ratio                                                     36.4          36.5
Net cost-to-income ratio                                                       20.9          20.7

The above cost-to-income ratios are calculated in accordance with the SA REIT Association's Best
Practice Recommendations.

Portfolio strategy
Redefine continues to advance its strategy of diversifying, growing and improving the quality of the
property portfolio. During the period, management's primary focus domestically was on protecting,
expanding and improving existing well-located properties mainly through development activities.

Local acquisitions: Subsequent to the reporting period, Redefine acquired the remaining 50% share
of 115 West Street (Alexander Forbes), with a GLA of 20 546m(2) at an average initial yield of 9.25% for
R750.0 million.

International acquisitions: Redefine acquired a 25% equity share in Chariot Top Group B.V. (Chariot) for
R907.9 million (EUR57.9 million). Chariot owns a portfolio of 28 well-located retail properties throughout
Poland with two blue chip tenants occupying over 65% of the GLA. Echo Polska Properties N.V. (EPP) has
agreed to acquire 12 properties from Chariot for R9.9 billion (EUR692 million) in three tranches, the first of
which was completed on 4 January 2018. The acquisition of Chariot is in line with Redefine's international
strategy which is centered on geographic diversification in hard currency markets.

New developments: Projects in progress total R3.5 billion at an average initial yield of 8.5%. In addition,
infrastructure projects totalling R648.6 million for the S&J, Brackengate, Matlosana Mall and Atlantic
Hills sites are currently under way.

Redevelopments: During the period, redevelopment projects were completed with a total value of
R212.7 million at an average projected initial yield of 6.4%. Redevelopment projects in progress in the
existing portfolio total R743.4 million at an average initial yield of 6.2%. Future committed projects total
R162.6 million at a projected initial yield of 1.6%.

Held-for-trading: Two portions of Brackengate land with a developable area of 213 191m2 have been
transferred to held-for-trading.

Disposals: 14 properties with a GLA of 208 360m(2), which no longer served Redefine's investment strategy,
were disposed of during the period to various buyers for an aggregate consideration of R2.2 billion, at an
average yield of 8.1%. In addition, agreements, subject to the usual conditions precedent, were concluded
for the disposal of properties for an aggregate consideration of R530.0 million with a GLA of 123 141m(2)
at an average yield of 7.9%.

Student accommodation: Redefine continues to expand its local student accommodation portfolio
with the completion of Lincoln House, a 469 bed Residence in Bloemfontein which started trading
in January 2018, for a total value of R103.4 million with an average projected initial yield of 10.6%.
Projects in progress (Hatfield Square and Roscommon House) total R1.1 billion at an average yield
of 10.6%. Paton House, a future committed project, has a cost of R108.1 million with an estimated initial
yield of 10.6%.

Redefine has also continued to expand its presence in the Australian student accommodation
market through its 90% held subsidiary, Journal Student Accommodation Fund. The Leicester Street
development, at a total cost of R1.2 billion (AUD140.0 million), will have 804 beds and is progressing well
with anticipated completion in time for the 2019 student intake.

Sustainability: We continue to focus on operating our buildings efficiently. Approximately 3 000 smart
electricity meters are in the process of being installed in 117  of  our buildings, and we are deploying
smart water metering and control devices at 66 buildings, including all our Cape Town based properties.
Using smart metering data enables us to operate buildings efficiently and increases consumption
control to minimise energy and water waste. Through ongoing interaction with our facilities and
property management teams, energy efficiency projects are continuously identified and implemented
where feasible.

Investment in associates and joint ventures
                                                      28 February 2018              31 August 2017
                                                           Carrying                Carrying
                                                Stock         value       Held        value        Held
                                             exchange         R'000        (%)        R'000         (%)
EPP                                     LuxSE and JSE     4 985 744       36.2    4 784 916        39.6
RDI REIT Plc (RDI)                        LSE and JSE     3 895 228       29.4    3 857 858        29.5
Cromwell Property Group (Cromwell)                ASX       575 562        3.0    4 889 868        25.3
Oando Wings Development Limited            Not listed       538 800       39.5      587 199        37.2
Cromwell Partners Trust (CPT)              Not listed     1 434 101       50.0      887 892        50.0
International Hotel Properties Limited  
(IHL)                                     LSE and JSE             -          -      245 993        27.5
                                                         11 429 435              15 253 726

Cromwell: Redefine has entered into an agreement for the sale of 19.5% of its interest in Cromwell for
an aggregate gross sale consideration of R3.7 billion (AUD405.9 million). Subject to the approval of the
Australian Foreign Investment Review Board (FIRB), the proceeds are expected to be received in May
2018. This portion of the investment in Cromwell has been reclassified to non-current assets held-for-sale. 
As a result of the reclassification to non-current assets held-for-sale, the investment in Cromwell
is now carried at fair value less costs to sell which, in addition to the strengthening of the Rand, lead
to an impairment of R416.0 million (FY17: R515.9 million). The net proceeds, after deduction of capital
gains tax and selling costs, are estimated at R3.4 billion (AUD375.9 million). The remaining portion of the
investment (3.0%) is classified as an investment in associate until the date of the disposal, thereafter it
will be transferred to listed securities.

RDI: During the period, Redefine agreed to exchange all of the shares it held in IHL for 19.8 million shares
in RDI and R138.6 million (GBP7.5 million) cash. Given the prolonged decline in the share price of RDI and
the existence of other impairment indicators, the carrying value of RDI was subject to impairment testing,
in accordance with IAS 36 Impairment of Assets by comparing the carrying amount to the recoverable
amount, being value-in-use. A discounted cash flow was performed taking into account the forecasted
future expected cash flow which was discounted at relevant market rates in order to calculate the
value-in-use. The carrying amount of RDI was accordingly impaired by R78.4 million (FY17: R688.2 million).

CPT: The development of Northpoint Tower is substantially complete. During the period, the property
was fair valued resulting in an uplift of R1.2 billion (AUD136.0 million), of which Redefine's share is
R621.0 million.

Exchange rates: The Rand strengthened compared to the prior period and as a result Redefine's
proportionate share of the underlying foreign currency denominated associates' net assets similarly
declined. This decline was largely neutralised by the natural hedge created by the foreign currency
denominated debt held against these assets, as it was correspondingly valued downwards

Foreign currency                                                              28 February      31 August
                                                                                     2018           2017
AUD                                                                                9.1359        10.2867
USD                                                                               11.7186        13.0203
EUR                                                                               14.3293        15.4646
GBP                                                                               16.2986        16.8243

Funding and equity raises
Redefine's interest-bearing borrowings (net of cash and cash equivalents and including the fair value
of cash settled hedges) represented 40.1% (FY17: 41.1%) of the value of its property asset platform
at 28 February 2018. The Group's property asset platform is made up of property, listed securities,
loans receivable, and interests in associates and joint ventures. The average cost of Rand-denominated
funding is 9.0% (FY17: 9.1%), interest rates are hedged on 87.9% (FY17: 93.0%) of local borrowings for
an average period of 2.3 years (FY17: 2.4 years). Including foreign currency debt and derivatives, the
average cost of debt is 6.9% (FY17: 7.3%). Interest rates are hedged on 84.5% (FY17: 88.7%) of total
borrowings for an average period of 2.5 years (FY17: 2.7 years). The interest cover ratio (which includes
equity-accounted dividends and listed security income) is 4.0x (FY17: 3.6x).

Redefine had unutilised committed bank facilities of R2.6 billion (FY17: R3.7 billion) at 28 February 2018
which provides assurance that the Group will be able to meet its short-term commitments. At
28 February 2018, Redefine had R8.1 billion (FY17: R6.8 billion) short-term interest-bearing borrowings.
Of this R1.0 billion has been repaid and subsequent to the reporting period the balance has been
refinanced to lengthen the overall debt portfolio's maturity profile. It is anticipated that the proceeds
from the sale of Cromwell will bolster liquidity by applying the proceeds against local debt facilities and
to fund development activities.

The December 2017 dividend reinvestment alternative saw 14.6% of shareholders accepting the
reinvestment alternative, conserving R341.7 million of cash and Redefine issuing 33.0 million shares.

Moody's credit rating:
On 27 March 2018, the outlook on Redefine's global scale rating was upgraded to stable after being
placed under review for downgrade on 29 November 2017, following a similar action taken on the
sovereign rating.

Global long-term Baa3               Global short-term P-3
National long-term Aa1.za           National short-term P-1.za

Moody's has maintained a Baa3 long-term global rating for the EUR150.0 million senior secured
exchangeable bonds issued by Redefine.

Commitments
Capital development commitments outstanding amount to R3.4 billion (FY17: R3.0 billion) and committed
property acquisitions total R750.0 million (FY17: Rnil). Future commitments will be funded by undrawn
banking facilities and proceeds from capital recycling activities.

Subsequent events
Redefine issued 40 million shares for R448 million through a vendor consideration placement on
22 March 2018 to part fund the acquisition of the remaining 50% it did not own of 115 West Street.
During April 2018, Redefine concluded the sale of its equity share in Cromwell Partners Trust (CPT) to
Early Light Channel for an amount of R1.6 billion (AUD180.1 million). The net proceeds, after deduction
of capital gains tax and selling costs, are estimated at R1.4 billion (AUD152.9 million). The transaction is
subject to FIRB approval and is expected to be settled during May 2018.

Broad-based black economic empowerment (B-BBEE)
Redefine is committed to the objectives of B-BBEE and endeavours to explicitly integrate the
principles in our business. Redefine has made meaningful organisational changes to embrace the
spirit of B-BBEE, including forming a Transformation Committee. The revised property sector codes
were promulgated during 2017. Certain new elements were introduced and rating thresholds were
increased. We were pleased to achieve a level 4 contributor-status as rated under these new codes. It
remains a priority to improve our compliance with the codes.

Prospects
Global growth and commodity prices continue to support local fundamentals and the improvement in political
stability and policy certainty - lack of which were the key reasons for sub-optimal growth over the past five
years - are expected to lead to higher investment and economic growth as confidence continues to build.
While growth forecasts have been revised upwards to around 1.7% and 1.9% for 2018 and 2019 respectively,
economic growth is not yet at a level to alleviate soft property fundamentals - twice the current growth on a
sustained basis is required to make sustainable inroads. Interventions introduced by President Ramaphosa to
propel the economic growth rate are welcomed and we are supportive of his initiatives.

Against this background we believe that our strategic approach is appropriate for the environment in which
we are operating.

We are pleased to report that Redefine has delivered its market guidance of 5.5% growth in distribution per
share for the first half of 2018. We anticipate maintaining this growth rate for the full 2018 financial year.

We remain focused on what matters most in executing all our strategic choices to deliver sustained value
creation for all our stakeholders (operating efficiently, investing strategically, optimising capital, engaging
talent and growing reputation).

This forecast is predicated on the assumption that current trading conditions will prevail. Forecast rental
income is based on contractual terms and anticipated market-related renewals. The forecast has not been
reviewed or reported on by the Group's independent external auditors.

Redefine's use of distribution per share as a relevant measure of financial performance remains unchanged
from prior years.

Declaration of a cash dividend with the election to reinvest the
cash dividend in return for Redefine shares

The directors of Redefine have declared an interim cash dividend of 47,30000 cents per Redefine
ordinary share, for the six months ended 28 February 2018, from the company's distributable income
(the cash dividend).

Shareholders will be provided with an election to reinvest the cash dividend in return for Redefine
shares (share reinvestment alternative), failing which they will receive the cash dividend of 47,30000
cents per share.

SALIENT DATES AND TIMES REGARDING THE CASH DIVIDEND
Last day to trade in order to receive the cash dividend                                      Tuesday, 22 May
Shares trade ex dividend                                                                   Wednesday, 23 May
Record date to receive the cash dividend                                                      Friday, 25 May
Cash dividend paid to certificated shareholders on or about                                   Monday, 28 May
Accounts credited by CSDP or broker to dematerialised shareholders      
with the cash dividend payment                                                                Monday, 28 May
      
Notes:
1. Shares may not be dematerialised or rematerialised between Wednesday, 23 May 2018 and Friday, 25 May 2018, 
   both days inclusive.
2. The above dates and times are subject to change. Any changes will be announced on SENS.

Certificated shareholders receiving the cash dividend will receive the dividend payment on Monday,
28 May 2018. Central Securities Depository Participants or broker custody accounts of dematerialised
shareholders will be credited with the dividend on Monday, 28 May 2018. Any changes to these dates
will be released on SENS.

Tax implications
Redefine was granted REIT status by the JSE with effect from 1 September 2013 in line with the REIT
structure as provided for in the Income Tax Act, 58 of 1962, as amended (the Income Tax Act), and
section 13 of the JSE Listings Requirements. The REIT structure is a tax regime that allows a REIT to
deduct qualifying distributions paid to investors, in determining its taxable income. The cash dividend
of 47,30000 cents per share meets the requirements of a qualifying distribution for the purposes of
section 25BB of the Income Tax Act (a qualifying distribution) with the result that:

- Qualifying distributions received by resident Redefine shareholders must be included in the gross
  income of such shareholders (as a non-exempt dividend in terms of section 10(1)(k)(aa) of the
  Income Tax Act), with the effect that the qualifying distribution is taxable as income in the hands
  of the Redefine shareholder. These qualifying distributions are, however, exempt from dividends
  withholding tax, provided that the South African resident shareholders 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 dividends are exempt from dividends tax; and
   - A written undertaking to inform the CSDP, broker or the company, as the case may be, should
     the circumstances affecting the exemption change or the beneficial owner cease to be the
     beneficial owner,

both in the form prescribed by the Commissioner for the South African Revenue Service.
Shareholders are advised to contact their CSDP, broker or the Company, as the case may be,
to arrange for the abovementioned documents to be submitted prior to payment of the distribution,
if such documents have not already been submitted.

- Qualifying distributions received by non-resident Redefine shareholders will not be taxable as
  income and instead will be treated as ordinary dividends but which are exempt in terms of the
  usual dividend exemptions per section 10(1)(k) of the Income Tax Act. It should be noted that until
  31 December 2013, qualifying distributions received by non-residents were not subject to dividends
  withholding tax. Any qualifying distribution will be subject to dividends withholding 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 shareholder. Assuming dividends
  withholding tax will be withheld at a rate of 20% (FY17: 20%), the net dividend amount due to non-
  resident shareholders is 37,84000 cents per share. A reduced dividend withholding rate in terms
  of the applicable DTA, may only be relied upon 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 a DTA;
  and
- A written undertaking to inform their 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 for the South African Revenue Service.

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

Shareholders are advised that in electing to participate in the share reinvestment alternative,
pre-taxation funds are utilised for the reinvestment purposes and that taxation will be due on the total
cash dividend amount of 47,30000 cents per share.

Other information
- The ordinary issued share capital of Redefine is 5 723 098 386 ordinary shares of no par value before
  any election to reinvest the cash dividend.
- Income tax reference number of Redefine: 917/852/484/0.

The cash dividend or share reinvestment alternative may have tax implications for resident as well
as non-resident shareholders. Shareholders are therefore encouraged to consult their professional
advisers should they be in any doubt as to the appropriate action to take.

Foreign shareholders
The release, publication or distribution of this announcement and/or accompanying documents and
the right to elect shares pursuant to the share reinvestment alternative in jurisdictions other than
in the Republic of South Africa may be restricted or affected by the laws of such jurisdictions, and
a failure to comply with any of those restrictions may constitute a violation of the securities laws of
any such jurisdictions. The shares issued pursuant to the share reinvestment plan have not been and
will not be registered for the purposes of the election under the securities laws of the United States,
Australia, Canada, countries in the European Economic Area, Japan and Hong Kong and accordingly
are not being offered, sold, take up, resold or delivered directly or indirectly to recipients with registered
addresses in such jurisdictions unless certain exemptions from the requirement of those jurisdictions
are applicable.

United States of America
The shares issued pursuant to the share reinvestment alternative have not been and will not be
registered under the U.S. Securities Act of 1993, as amended (U.S. Securities Act), or under any
securities laws of any state or other jurisdiction of the United States and may not be offered, sold, take
up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within the United States
except pursuant to an applicable exemption from, or in a transaction not subject to, the registration
requirements of the U.S. Securities Act and applicable state and other securities laws of the United
States. There will be no public offer of the shares issued pursuant to the share reinvestment plan in
the United States.

Dividend declaration after reporting date
- 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 which is not recognised in the
  financial statements.

Restatements
Business combinations
On 9 January 2017, the Group acquired 100% of the shares and voting rights in The Pivotal Fund
Limited ("Pivotal") and attained control of Pivotal. Provisional amounts were used for the purpose of
consolidation, as the business combination occurred shortly before Redefine's 2017 interim reporting
period. Subsequent to this, new information was obtained within one year of the date of acquisition
about the facts and circumstances that existed at the date of acquisition which led to the revision of the
accounting of the acquisition.

Accordingly, these results are restated with the change applied retrospectively.

ASSETS AND LIABILITIES ARISING FROM THE PIVOTAL ACQUISITION (31 DECEMBER 2016)

                                                                                                     Provisional
                                                                                                      amounts as
                                                                                                      previously
Figures in R'000s                                                                                       reported     Adjustments      Restated
Assets                                    
Listed securities                                                                                        299 782         608 089       907 871
Interest in associate                                                                                    783 627       (245 823)       537 804
Liabilities                                     
Other financial liabilities                                                                                    -       (608 088)     (608 088)
Trade and other payables                                                                               (266 626)          57 656     (208 970)
Fair value of net assets                                                                               4 827 640       (188 166)     4 639 474
Goodwill                                                                                                 379 558         188 166       567 724
The line items affected are:                                    
                                                                                                      Previously
                                                                                                        reported                      Restated
                                                                                                       Unaudited                     Unaudited
                                                                                                     28 February                   28 February
Figures in R'000s                                                                                           2017     Adjustments          2017
STATEMENT OF FINANCIAL POSITION                                     
Non-current assets                                                                                    87 930 036        (57 657)    87 872 379
Goodwill and intangible assets                                                                         5 652 321         188 166     5 840 487
Investment in associates and joint ventures                                                           16 575 787       (245 823)    16 329 964
Total assets                                                                                          91 790 060        (57 657)    91 732 403
Current liabilities                                                                                  (7 378 928)          57 657   (7 321 271)
Trade and other payables                                                                             (1 190 582)          57 657   (1 132 925)
Total equity and liabilities                                                                        (91 790 060)          57 657  (91 732 403)
Net tangible asset value per share (excluding deferred tax,                                     
NCI, and goodwill and intangible assets) (cents)                                                          951.54          (3.61)        947.93

Change in accounting policy
DIVIDENDS AND INTEREST RECEIVED FROM ASSOCIATES AND JOINT VENTURES - STATEMENT OF CASH FLOWS

During the period, the Group changed its accounting policy with respect to the disclosure of the dividends
and interest received from associates and joint ventures in the statement of cash flows. The dividends and
interest received from associates and joint ventures are now classified under cash flows from operating
activities which the Group believes is a better reflection of how the Group generates the cash to pay its
distributions and will aid comparability. Prior to this change in policy, the Group classified the dividends
and interest received from associates and joint ventures under cash flows from investing activities. 
The change was applied retrospectively and the following line items were effected:
              
                                                                                                       Previously
                                                                                                         reported                      Restated
                                                                                                        Unaudited                     Unaudited
                                                                                                      28 February                   28 February
Figures in R'000s                                                                                            2017   Adjustments            2017
STATEMENT OF CASH FLOWS                                                 
CASH FLOWS FROM OPERATING ACTIVITIES                                                 
Dividends and interest received from associates                                                    
and joint ventures                                                                                              -       536 144         536 144
Net cash inflow from operating activities                                                               1 757 337       536 144       2 293 481
CASH FLOWS FROM INVESTING ACTIVITIES                                                 
Dividends and interest received from associates                                                    
and joint ventures                                                                                        536 144      (536 144)              -
Net cash inflow from investing activities                                                               1 225 418      (536 144)        689 274
                                              
                                                                                                       Previously
                                                                                                         reported                      Restated
                                                                                                          Audited                       Audited
                                                                                                        31 August                     31 August
Figures in R'000s                                                                                            2017    Adjustments           2017
STATEMENT OF CASH FLOWS                                               
CASH FLOWS FROM OPERATING ACTIVITIES                                               
Dividends and interest received from associates                                               
and joint ventures                                                                                              -      1 075 056      1 075 056
Net cash inflow from operating activities                                                               2 582 384      1 075 056      3 657 440
CASH FLOWS FROM INVESTING ACTIVITIES                                               
Dividends and interest received from associates                                               
and joint ventures                                                                                      1 075 056    (1 075 056)              -
Net cash inflow/(outflow) from investing activities                                                     1 073 353    (1 075 056)        (1 703)

Basis of preparation

These condensed consolidated unaudited interim financial statements are prepared in accordance with
International Financial Reporting Standards, 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 and the JSE Listings Requirements. The accounting policies applied in preparing these
interim financial statements are in terms of International Financial Reporting Standards and are
consistent with those applied in the previous financial statements except for the change in accounting
policy relating to dividends and interest received from associates and joint ventures in the statement
of cash flows (refer to restatements). LC Kok (CA(SA)), Redefine's financial director, was responsible
for supervising the preparation of these condensed consolidated interim financial statements. These
condensed consolidated interim financial statements for the period ended 28 February 2018 have not
been reviewed or reported on by Redefine's independent external auditors.

By order of the Board

Redefine Properties Limited

7 May 2018

Statement of profit or loss and other comprehensive income                                  
                                                                                                          Unaudited      Unaudited       Audited
                                                                                                        28 February    28 February     31 August
Figures in R'000s                                                                                              2018           2017          2017
Continuing operations                                  
Revenue                                  
Property portfolio revenue                                                                                3 855 362      3 572 621     7 770 111
- Contractual rental income                                                                               3 855 469      3 423 486     7 300 821
- Straight-line rental income accrual                                                                         (107)        149 135       469 290
Investment income                                                                                            77 763         15 557        23 728
Total revenue                                                                                             3 933 125      3 588 178     7 793 839
Operating costs                                                                                         (1 306 237)    (1 162 053)   (2 497 688)
Administration costs                                                                                      (124 798)       (92 596)     (259 641)
Net operating profit                                                                                      2 502 090      2 333 529     5 036 510
Other gains                                                                                                  19 901         27 237        93 195
- Trading loss                                                                                                    -              -       (2 595)
- Fee income                                                                                                 19 793         23 441        92 503
- Sundry income                                                                                                 108          3 796         3 287
Loss on disposal of interest in associate                                                                  (52 514)              -             -
Changes in fair values of properties, listed securities                                  
and financial instruments                                                                                 1 659 102        795 835     (541 947)
Amortisation of intangible asset                                                                           (31 428)       (31 428)      (62 856)
Impairments                                                                                               (494 395)              -   (1 215 209)
Equity-accounted profit (net of taxation)                                                                 1 548 314        825 246     1 593 387
Profit before finance costs and taxation                                                                  5 151 070      3 950 419     4 903 080
Net interest costs                                                                                        (779 752)      (824 883)   (1 727 776)
- Interest income                                                                                           467 959        284 895       650 282
- Interest expense                                                                                      (1 247 711)    (1 109 778)   (2 378 058)
Foreign exchange gains                                                                                      552 024        613 700       478 670
Profit before taxation                                                                                    4 923 342      3 739 236     3 653 974
Taxation                                                                                                  (199 150)      (197 016)     (239 842)
Profit from continuing operations                                                                         4 724 192      3 542 220     3 414 132
Discontinued operations                                  
Loss from discontinued operations (net of taxation)                                                               -       (13 864)      (13 877)
Profit for the period/year                                                                                4 724 192      3 528 356     3 400 255
Attributable to:                                  
- Redefine Properties Limited shareholders                                                                4 690 515      3 490 986     3 328 995
- Non-controlling interests                                                                                  33 677         37 370        71 260
Other comprehensive income                                                                                (717 260)    (1 896 624)   (1 458 975)
Items that may not be reclassified subsequently to profit or loss                                  
Share of revaluation of property, plant and equipment                                  
of an associate                                                                                               4 311          3 167         3 167
Items that are or may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations:
- Subsidiaries                                                                                             (66 689)          (287)       (6 938)
- Associates                                                                                              (654 882)    (1 899 504)   (1 455 204)
                                  
Total comprehensive income for the period/year                                                            4 006 932      1 631 732     1 941 280
Attributable to:                                  
- Redefine Properties Limited shareholders                                                                3 982 564      1 596 312     1 876 965
- Non-controlling interests                                                                                  24 368         35 420        64 315
Earnings per share from continuing operations                                  
- Basic                                                                                                       88.43           72.19        66.15
- Diluted                                                                                                     88.20           72.19        65.98

Statement of financial position                                   
                                                                                                                           Restated
                                                                                                            Unaudited     Unaudited      Audited
                                                                                                          28 February   28 February    31 August
Figures in R'000s                                                                                                2018          2017         2017
ASSETS                                      
Non-current assets                                                                                         87 288 727    87 872 379   87 611 269
Investment properties                                                                                      65 910 557    63 649 927   63 192 093
- Fair value of investment properties                                                                      59 514 237    57 296 818   57 299 006
- Straight-line rental income accrual                                                                       1 944 111     1 983 794    1 944 218
- Properties under development                                                                              4 452 209     4 369 315    3 948 869
Listed securities                                                                                           1 196 341       274 007    1 453 994
Goodwill and intangible assets                                                                              5 777 633     5 840 487    5 809 059
Investment in associates and joint ventures                                                                11 429 435    16 329 964   15 253 726
Derivative assets                                                                                             126 373       144 896        1 868
Loans receivable                                                                                            2 638 095     1 606 740    1 789 395
Other financial assets                                                                                        131 059         5 658       29 519
Property, plant and equipment                                                                                  79 234        20 700       81 615
Current assets                                                                                              1 816 024     2 124 330    1 477 586
Properties held-for-trading                                                                                   122 294             -            -
Trade and other receivables                                                                                   949 881       827 361      912 752
Loans receivable                                                                                               41 711       238 705       55 260
Other financial assets                                                                                        253 875       252 925      253 038
Derivative assets                                                                                             124 822       117 784       75 875
Taxation receivable                                                                                                 -         3 904            -
Cash and cash equivalents                                                                                     323 441       683 651      180 661
Non-current assets held-for-sale                                                                            4 304 959     1 735 694    2 403 756
Total assets                                                                                               93 409 710    91 732 403   91 492 611
EQUITY AND LIABILITIES                                      
Equity                                                                                                     55 684 140    54 927 804   53 786 185
Shareholders' interest                                                                                     55 265 885    54 604 305   53 435 737
Stated capital                                                                                             43 411 827    42 256 217   43 070 822
Reserves                                                                                                   11 854 058    12 348 088   10 364 915
Non-controlling interests                                                                                     418 255       323 499      350 448
Non-current liabilities                                                                                    27 667 420    29 483 328   29 052 772
Interest-bearing borrowings                                                                                24 503 385    26 746 401   25 664 659
Interest-bearing borrowings at fair value                                                                   2 079 117     1 962 679    2 253 598
Derivative liabilities                                                                                        272 059       141 530      487 564
Other financial liabilities                                                                                    11 638             -        4 690
Deferred taxation                                                                                             801 221       632 718      642 261
Current liabilities                                                                                        10 058 150     7 321 271    8 653 654
Trade and other payables                                                                                    1 300 759     1 132 925    1 180 736
Interest-bearing borrowings                                                                                 8 100 433     5 542 351    6 794 929
Interest accrual on interest-bearing borrowings                                                               382 800       377 129      406 849
Derivative liabilities                                                                                         19 112         5 846       11 799
Other financial liabilities                                                                                   253 875       252 925      253 038
Taxation payable                                                                                                1 171        10 095        6 303
                                      
Total equity and liabilities                                                                               93 409 710    91 732 403   91 492 611
Number of shares in issue ('000)^                                                                           5 321 701     5 210 985    5 288 655
Net asset value per share (excluding deferred tax and NCI) (cents)                                           1 053.56      1 060.01     1 022.53
Net tangible asset value per share (excluding deferred tax,                                      
NCI and goodwill and intangible assets) (cents)                                                                944.99        947.93       912.69
^Net of 361 396 896 (HY17 and FY17: 361 396 896) treasury shares.

Statement of changes in equity                
                                                                                                                         Foreign
                                                                                                                        currency     Share-based  
                                                                                                      Accumulated    translation         payment  
Figures in R'000s                                                                  Stated capital          profit        reserve         reserve  
Balance as at 31 August 2016                                                           36 526 352      12 231 282        640 820          39 825  
Total comprehensive income for the period                                                       -       3 490 986    (1 897 841)               -  
Profit for the period                                                                           -       3 490 986              -               -  
Other comprehensive income for the period                                                       -               -    (1 897 841)               -  
Transactions with owners (contributions and distributions)                              5 729 865     (2 082 504)              -         (5 538)  
Issue of ordinary shares                                                                5 733 373               -              -               -  
Dividends                                                                                       -     (2 082 504)              -               -  
Recognition of share-based payments                                                       (3 508)               -              -         (5 538)  
Share of post-acquisition change in net assets of associate                                     -               -              -               -  
Transactions with owners (changes in ownership interests)                                       -               -              -               -  
Acquisitions of subsidiary with NCI                                                             -               -              -               -  
Disposal of subsidiary with NCI                                                                 -               -              -               -  
                      
Balance as at 28 February 2017                                                         42 256 217      13 639 764    (1 257 021)          34 287  
Total comprehensive income for the period                                                       -       (161 991)        442 644               -  
Profit for the period                                                                           -       (161 991)              -               -  
Other comprehensive income for the period                                                       -               -        442 644               -  
Transactions with owners (contributions and distributions)                                814 605     (2 340 180)              -          18 588  
Issue of ordinary shares                                                                  811 097               -              -               -  
Dividends                                                                                       -     (2 335 562)              -               -  
Recognition of share-based payments                                                         3 508         (4 618)              -          18 588  
Share of post-acquisition change in net assets of associate                                     -               -              -               -  
Transactions with owners (changes in ownership interests)                                       -               -              -               -  
Acquisitions of subsidiary with NCI                                                             -               -              -               -  
Disposal of subsidiary with NCI                                                                 -               -              -               -  
                       
Balance as at 31 August 2017                                                           43 070 822      11 137 593      (814 377)          52 875  
Total comprehensive income for the period                                                       -       4 690 515      (712 262)               -  
Profit for the period                                                                           -       4 690 515              -               -  
Other comprehensive income for the period                                                       -               -      (712 262)               -  
Transactions with owners (contributions and distributions)                                341 005     (2 499 370)              -        (10 971)  
Issue of ordinary shares                                                                  341 005               -              -               -  
Dividends                                                                                       -     (2 495 166)              -               -  
Recognition of share-based payments                                                             -         (5 999)              -        (10 971)  
Disposal of investment in an associate                                                          -           1 795              -               -  
Share of post-acquisition change in net assets of associate                                     -               -              -               -  
Transactions with owners (changes in ownership interests)                                       -           (536)              -               -  
Acquisitions of subsidiary with NCI                                                             -               -              -               -  
Change in ownership of subsidiary with NCI                                                      -           (536)              -               -  
                      
Balance as at 28 February 2018                                                         43 411 827      13 328 202    (1 526 639)          41 904                
                                                                                 
                                                                                         Share of                           Non-
                                                                                      associates'    Shareholders'    controlling
Figures in R'000s                                                                        reserves         interest      interests   Total equity
Balance as at 31 August 2016                                                             (78 217)       49 360 062        281 300     49 641 362
Total comprehensive income for the period                                                   3 167        1 596 312         35 420      1 631 732
Profit for the period                                                                           -        3 490 986         37 370      3 528 356
Other comprehensive income for the period                                                   3 167      (1 894 674)        (1 950)    (1 896 624)
Transactions with owners (contributions and distributions)                                  6 108        3 647 931              -      3 647 931
Issue of ordinary shares                                                                        -        5 733 373              -      5 733 373
Dividends                                                                                       -      (2 082 504)              -    (2 082 504)
Recognition of share-based payments                                                             -          (9 046)              -        (9 046)
Share of post-acquisition change in net assets of associate                                 6 108            6 108              -          6 108
Transactions with owners (changes in ownership interests)                                       -                -          6 779          6 779
Acquisitions of subsidiary with NCI                                                             -                -         37 541         37 541
Disposal of subsidiary with NCI                                                                 -                -       (30 762)       (30 762)
                
Balance as at 28 February 2017                                                           (68 942)       54 604 305        323 499     54 927 804
Total comprehensive income for the period                                                       -          280 653         28 895        309 548
Profit for the period                                                                           -        (161 991)         33 890      (128 101)
Other comprehensive income for the period                                                       -          442 644        (4 995)        437 649
Transactions with owners (contributions and distributions)                                 57 766      (1 449 221)       (23 998)    (1 473 219)
Issue of ordinary shares                                                                        -          811 097              -        811 097
Dividends                                                                                       -      (2 335 562)       (23 998)    (2 359 560)
Recognition of share-based payments                                                             -           17 478              -         17 478
Share of post-acquisition change in net assets of associate                                57 766           57 766              -         57 766
Transactions with owners (changes in ownership interests)                                       -                -         22 052         22 052
Acquisitions of subsidiary with NCI                                                             -                -       (62 810)       (62 810)
Disposal of subsidiary with NCI                                                                 -                -         84 862         84 862
                 
Balance as at 31 August 2017                                                             (11 176)       53 435 737        350 448     53 786 185
Total comprehensive income for the period                                                   4 311        3 982 564         24 368      4 006 932
Profit for the period                                                                           -        4 690 515         33 677      4 724 192
Other comprehensive income for the period                                                   4 311        (707 951)        (9 309)      (717 260)
Transactions with owners (contributions and distributions)                                 17 456      (2 151 880)              -    (2 151 880)
Issue of ordinary shares                                                                        -          341 005              -        341 005
Dividends                                                                                       -      (2 495 166)                   (2 495 166)
Recognition of share-based payments                                                             -         (16 970)              -       (16 970)
Disposal of investment in an associate                                                    (1 795)                -              -              -
Share of post-acquisition change in net assets of associate                                19 251           19 251              -         19 251
Transactions with owners (changes in ownership interests)                                       -            (536)         43 439         42 903
Acquisitions of subsidiary with NCI                                                             -                -         60 689         60 689
Change in ownership of subsidiary with NCI                                                      -            (536)       (17 250)       (17 786)
                
Balance as at 28 February 2018                                                             10 591       55 265 885        418 255     55 684 140

                                                                                                  28 February       28 February        31 August
                                                                                                         2018              2017             2017
Dividend per share (cents)                                                                              47.30             44.82            92.00
Interim                                                                                                47.30*             44.82            44.82
Final                                                                                                       -                 -            47.18
* The interim dividend is declared post the reporting period and is therefore a non-adjusting subsequent event.

Statement of cash flows
                                                                                                                          Restated       Restated
                                                                                                          Unaudited      Unaudited        Audited
                                                                                                        28 February    28 February      31 August
Figures in R'000s                                                                                              2018           2017           2017
CASH FLOWS FROM OPERATING ACTIVITIES                                        
Cash generated from operations                                                                            2 662 365      2 579 154      4 671 340
Interest received                                                                                           414 351        276 196        621 524
Interest paid                                                                                           (1 201 611)    (1 064 363)    (2 643 655)
Taxation paid                                                                                              (46 005)       (33 650)       (66 825)
Dividends and interest received from associates                                        
and joint ventures                                                                                          597 794        536 144      1 075 056
                                         
Net cash inflow from operating activities                                                                 2 426 894      2 293 481      3 657 440
                                        
CASH FLOWS FROM INVESTING ACTIVITIES                                        
Acquisition and development of investment properties                                                    (2 146 115)    (2 072 569)    (3 615 750)
Acquisition of property, plant and equipment                                                                (8 202)        (4 792)       (80 368)
Acquisition of other financial assets                                                                     (137 211)              -        (3 100)
Cash balances acquired on acquisition of subsidiaries                                                             -        103 740        103 740
Investments in associates and joint ventures                                                              (175 055)      (107 121)    (1 031 243)
Proceeds on disposal of investment properties                                                             2 293 983        696 017      1 688 413
Proceeds on disposal of listed securities                                                                         -      1 047 748      1 047 639
Proceeds on the disposal of subsidiaries with                                        
the exclusive view to resell                                                                                      -              -        190 697
Proceeds on the disposal/decrease in investments in                                         
associates and joint ventures                                                                               165 730         54 324        698 134
Proceeds on disposal of other financial assets                                                                    -        452 795        399 999
Loan to joint venture repaid                                                                                      -          7 828          8 741
Loans receivables repaid                                                                                     30 732        631 485        901 387
Loans receivables advanced                                                                                (927 377)      (120 181)      (309 992)
                                        
Net cash (outflow)/inflow from investing activities                                                       (903 515)        689 274        (1 703)
                                        
CASH FLOWS FROM FINANCING ACTIVITIES                                        
Shares issued                                                                                               341 005        522 667      1 337 272
Dividends paid                                                                                          (2 495 166)    (2 082 504)    (4 418 066)
Shares issued to non-controlling interests                                                                   60 689              -         54 100
Disposal of non-controlling interests                                                                      (17 784)              -       (25 269)
Dividends paid to non-controlling interests                                                                       -              -       (23 998)
Interest-bearing borrowings at fair value raised                                                                  -              -      2 396 220
Interest-bearing borrowings raised                                                                        3 569 782      5 971 539      8 088 968
Interest-bearing borrowings repaid                                                                      (2 817 054)    (6 950 240)   (11 191 223)
                                        
Net cash outflow from financing activities                                                              (1 358 528)    (2 538 538)    (3 781 996)
                                        
Net increase/(decrease) in cash and cash equivalents                                                        164 851        444 217      (126 259)
Cash and cash equivalents at the beginning of the period/year                                               180 661        208 366        208 366
Effect of foreign currency exchange fluctuations                                                           (22 071)         31 068         98 554
                                        
Cash and cash equivalents at end of period/year                                                             323 441        683 651        180 661

Earnings and headline earnings
                                                                                                             Unaudited     Unaudited      Audited
                                                                                                              February      February       August
Figures in R'000s                                                                                                 2018          2017         2017
                                      
Reconciliation of basic earnings to headline earnings                                      
Profit for the period/year attributable to Redefine shareholders                                             4 690 515     3 490 986    3 328 995
Changes in fair value of properties                                                                        (1 289 607)     (127 125)     (99 497)
                                      
- Changes in fair value of properties                                                                      (1 313 449)     (156 201)    (151 361)
- Non-controlling interest effect on other fair value adjustments                                               23 842        29 076       51 864
                                      
Bargain purchase on acquisition of associate                                                                  (11 595)             -            -
Profit on dilution of ownership investment in associates                                                      (43 515)     (107 507)      273 793
Loss on disposal of subsidiary                                                                                       -        13 864            -
Loss on disposal of interest in associate                                                                       52 514             -            -
Adjustment of remeasurements, included in equity-accounted                                      
earnings of associates (net of taxation)                                                                   (1 099 970)      (42 480)    (507 669)
                                      
- Adjustment of remeasurements, included in equity-accounted                                      
  earnings of associates                                                                                   (1 401 382)      (53 569)    (653 371)
- Tax adjustment                                                                                               301 412        11 089      145 702
                                      
Impairment of investments in associates and other                                                              494 395             -    1 215 209
                                       
Headline earnings attributable to Redefine shareholders                                                      2 792 737     3 227 738    4 210 831
                                       
Actual number of shares in issue (000)^                                                                      5 321 701     5 210 982    5 288 655
Weighted average number of shares in issue (000)^                                                            5 304 452     4 855 398    5 053 451
Diluted weighted average number of shares in issue (000)^                                                    5 318 597     4 855 398    5 066 217
Basic earnings per share (cents)                                                                                 88.43         71.90        65.88
                                       
- Continuing operations                                                                                          88.43         72.19        66.15
- Discontinued operations                                                                                            -        (0.29)       (0.27)
                                       
Diluted earnings per share (cents)                                                                               88.20         71.90        65.71
                                       
- Continuing operations                                                                                          88.20         72.19        65.98
- Discontinued operations                                                                                            -        (0.29)       (0.27)
                                       
Headline earnings per share (cents)                                                                              52.65         66.48        83.33
                                       
- Continuing operations                                                                                          52.65         66.48        83.60
- Discontinued operations                                                                                            -             -       (0.27)
                                       
Diluted headline earnings per share (cents)                                                                      52.52         66.48        83.12
                                       
- Continuing operations                                                                                          52.52         66.48        83.39
- Discontinued operations                                                                                            -             -       (0.27)
^Excludes 361 396 896 (HY17 and FY17: 361 396 896) treasury shares

Segmental analysis
for the six months ended 28 February 2018     
Figures in R'000s                                                                               Office        Retail    Industrial    Specialised 
STATEMENT OF FINANCIAL POSITION          
Investment properties                                                                       22 307 903    25 948 577    11 049 015      2 152 853 
Properties under development                                                                 1 088 276       758 270     1 457 795        372 482 
Listed securities                                                                                    -             -             -              - 
Goodwill and intangible assets                                                               1 913 810     2 883 662       510 710         60 888 
Investment in associates and joint ventures                                                          -             -             -              - 
Loans receivable                                                                                     -             -             -              - 
Properties held-for-trading                                                                          -             -       122 294              - 
Non-current assets held-for-sale                                                               498 000             -        32 000              - 
Other assets                                                                                         -             -             -              - 
           
Total assets                                                                                25 807 989    29 590 509    13 171 814      2 586 223 
           
Interest-bearing borrowings                                                                          -             -             -              - 
Interest-bearing borrowings at fair value                                                            -             -             -              - 
Other liabilities                                                                                    -             -             -              - 
           
Total liabilities                                                                                    -             -             -              - 
          
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME          
Contractual rental income                                                                    1 423 920     1 656 213       663 873        108 112 
Straight-line rental income accrual                                                           (36 681)         7 806        37 277        (8 509) 
Investment income                                                                                    -             -             -              - 
          
Total revenue                                                                                1 387 239     1 664 019       701 150         99 603 
Operating costs                                                                              (447 094)     (633 416)     (179 866)       (44 078) 
Administration costs                                                                                 -             -             -              - 
            
Net operating profit                                                                           940 145     1 030 603       521 284         55 525 
Other gains                                                                                          -             -             -              - 
Loss on disposal of interest in associate                                                            -             -             -              - 
Changes in fair values of properties, listed securities and financial instruments              286 925     1 102 642      (54 644)         17 353 
Amortisation of intangible assets                                                                    -             -             -              - 
Impairments                                                                                          -             -             -              - 
Equity-accounted profit (net of taxation)                                                            -             -             -              - 
           
Profit before finance costs and taxation                                                     1 227 070     2 133 245       466 640         72 878 
Interest income                                                                                      -             -             -              - 
Interest expense                                                                                     -             -             -              - 
Foreign exchange gains                                                                               -             -             -              - 
           
Profit before taxation                                                                       1 227 070     2 133 245       466 640         72 878 
Taxation                                                                                             -             -             -              - 
           
Profit for the period                                                                        1 227 070     2 133 245       466 640         72 878 
          
Non-controlling interests                                                                            -             -             -              - 
          
Profit for the period attributable to Redefine Properties Limited shareholders               1 227 070     2 133 245       466 640         72 878 

Figures in R'000s                                                                        Head office           Local   International   Group total
STATEMENT OF FINANCIAL POSITION    
Investment properties                                                                              -      61 458 348               -    61 458 348
Properties under development                                                                       -       3 676 823         775 386     4 452 209
Listed securities                                                                            972 259         972 259         224 082     1 196 341
Goodwill and intangible assets                                                               408 563       5 777 633               -     5 777 633
Investment in associates and joint ventures                                                        -               -      11 429 435    11 429 435
Loans receivable                                                                           1 843 503       1 843 503         836 303     2 679 806
Properties held-for-trading                                                                        -         122 294               -       122 294
Non-current assets held-for-sale                                                                   -         530 000       3 774 959     4 304 959
Other assets                                                                               1 781 390       1 781 390         207 295     1 988 685
     
Total assets                                                                               5 005 715      76 162 250      17 247 460    93 409 710
     
Interest-bearing borrowings                                                               24 836 992      24 836 992       7 766 826    32 603 818
Interest-bearing borrowings at fair value                                                          -               -       2 079 117     2 079 117
Other liabilities                                                                          3 042 635       3 042 635               -     3 042 635
     
Total liabilities                                                                         27 879 627      27 879 627       9 845 943    37 725 570
    
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME    
Contractual rental income                                                                          -       3 852 118           3 351     3 855 469
Straight-line rental income accrual                                                                -           (107)               -         (107)
Investment income                                                                             75 188          75 188           2 575        77 763
    
Total revenue                                                                                 75 188       3 927 199           5 926     3 933 125
Operating costs                                                                                    -     (1 304 454)         (1 783)   (1 306 237)
Administration costs                                                                       (113 683)       (113 683)        (11 115)     (124 798)
      
Net operating profit                                                                        (38 495)       2 509 062         (6 972)     2 502 090
Other gains                                                                                   11 350          11 350           8 551        19 901
Loss on disposal of interest in associate                                                          -               -        (52 514)      (52 514)
Changes in fair values of properties, listed securities and financial instruments           (41 141)       1 311 135         347 967     1 659 102
Amortisation of intangible assets                                                           (31 428)        (31 428)               -      (31 428)
Impairments                                                                                        -               -       (494 395)     (494 395)
Equity-accounted profit (net of taxation)                                                          -               -       1 548 314     1 548 314
     
Profit before finance costs and taxation                                                    (99 714)       3 800 119       1 350 951     5 151 070
Interest income                                                                              409 650         409 650          58 309       467 959
Interest expense                                                                         (1 083 116)     (1 083 116)       (164 595)   (1 247 711)
Foreign exchange gains                                                                             -               -         552 024       552 024
     
Profit before taxation                                                                     (773 180)       3 126 653       1 796 689     4 923 342
Taxation                                                                                    (10 812)        (10 812)       (188 338)     (199 150)
     
Profit for the period                                                                      (783 992)       3 115 841       1 608 351     4 724 192
    
Non-controlling interests                                                                   (34 047)        (34 047)             370      (33 677)
    
Profit for the period attributable to Redefine Properties Limited shareholders             (818 039)       3 081 794       1 608 721     4 690 515

Segmental analysis
for the six months ended 28 February 2017
Figures in R'000s                                                                               Office        Retail    Industrial    Specialised   
STATEMENT OF FINANCIAL POSITION        
Investment properties                                                                       22 110 552    25 192 727    10 612 381      1 364 952   
Properties under development                                                                 2 028 348       555 492     1 434 601              -   
Listed securities                                                                                    -             -             -              -   
Goodwill and intangible assets                                                               1 607 239     2 656 572       476 647         60 888   
Investment in associates and joint ventures                                                          -             -             -              -   
Loans receivable                                                                                     -             -             -              -   
Non-current assets held-for-sale                                                               320 703       486 858       131 386              -   
Other assets                                                                                         -             -             -              -   
        
Total assets                                                                                26 066 842    28 891 649    12 655 015      1 425 840   
        
Interest-bearing borrowings                                                                          -             -             -              -   
Interest-bearing borrowings at fair value                                                            -             -             -              -   
Other liabilities                                                                                    -             -             -              -   
        
Total liabilities                                                                                    -             -             -              -   
        
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME        
Contractual rental income                                                                    1 231 850     1 493 094       611 571         86 971   
Straight-line rental income accrual                                                             52 630        34 458        66 914        (4 867)   
Investment income                                                                                    -             -             -              -   
        
Total revenue                                                                                1 284 480     1 527 552       678 485         82 104   
Operating costs                                                                              (400 997)     (579 888)     (154 520)       (26 648)   
Administration costs                                                                                 -             -             -              -   
        
Net operating profit                                                                           883 483       947 664       523 965         55 456   
Other gains                                                                                          -             -             -              -   
Changes in fair values of properties, listed securities and financial instruments            (223 976)       417 104        77 218         18 397   
Amortisation of intangible assets                                                                    -             -             -              -   
Equity-accounted profit (net of taxation)                                                            -             -             -              -   
        
Profit before finance costs and taxation                                                       659 507     1 364 768       601 183         73 853   
Interest income                                                                                      -             -             -              -   
Interest expense                                                                                     -             -             -              -   
Foreign exchange gains                                                                               -             -             -              -   
          
Profit before taxation                                                                         659 507     1 364 768       601 183         73 853   
Taxation                                                                                             -             -             -              -  
          
Profit from continuing operations                                                              659 507     1 364 768       601 183         73 853   
Loss from discontinued operations (net of taxation)                                                  -             -             -              -   
          
Profit for the period                                                                          659 507     1 364 768       601 183         73 853   
         
Non-controlling interests                                                                            -             -             -              -   
        
Profit for the period attributable to Redefine Properties Limited shareholders                 659 507     1 364 768       601 183         73 853  

Figures in R'000s                                                                       Head office       SA total    International    Group total
STATEMENT OF FINANCIAL POSITION
Investment properties                                                                             -     59 280 612                -     59 280 612
Properties under development                                                                      -      4 018 441          350 874      4 369 315
Listed securities                                                                                 -              -          274 007        274 007
Goodwill and intangible assets                                                            1 039 141      5 840 487                -      5 840 487
Investment in associates and joint ventures                                               1 629 497      1 629 497       14 700 467     16 329 964
Loans receivable                                                                          1 797 694      1 797 694           47 751      1 845 445
Non-current assets held-for-sale                                                                  -        938 947          796 747      1 735 694
Other assets                                                                              1 876 219      1 876 219          180 660      2 056 879

Total assets                                                                              6 342 551     75 381 897       16 350 506     91 732 403

Interest-bearing borrowings                                                              29 154 541     29 154 541        3 134 211     32 288 752
Interest-bearing borrowings at fair value                                                         -              -        1 962 679      1 962 679
Other liabilities                                                                         2 553 168      2 553 168                -      2 553 168

Total liabilities                                                                        31 707 709     31 707 709        5 096 890     36 804 599

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Contractual rental income                                                                         -      3 423 486                -      3 423 486
Straight-line rental income accrual                                                               -        149 135                -        149 135
Investment income                                                                             5 076          5 076           10 481         15 557

Total revenue                                                                                 5 076      3 577 697           10 481      3 588 178
Operating costs                                                                                   -    (1 162 053)                -    (1 162 053)
Administration costs                                                                       (88 665)       (88 665)          (3 931)       (92 596)

Net operating profit                                                                       (83 589)      2 326 979            6 550      2 333 529
Other gains                                                                                   6 730          6 730           20 507         27 237
Changes in fair values of properties, listed securities and financial instruments         (133 508)        155 235          640 600        795 835
Amortisation of intangible assets                                                          (31 428)       (31 428)                -       (31 428)
Equity-accounted profit (net of taxation)                                                    92 720         92 720          732 526        825 246

Profit before finance costs and taxation                                                  (149 075)      2 550 236        1 400 183      3 950 419
Interest income                                                                             253 222        253 222           31 673        284 895
Interest expense                                                                          (967 111)      (967 111)        (142 667)    (1 109 778)
Foreign exchange gains                                                                            -              -          613 700        613 700
  
Profit before taxation                                                                    (862 964)      1 836 347        1 902 889      3 739 236
Taxation                                                                                   (25 626)       (25 626)        (171 390)      (197 016)
  
Profit from continuing operations                                                         (888 590)      1 810 721        1 731 499      3 542 220
Loss from discontinued operations (net of taxation)                                               -              -         (13 864)       (13 864)
  
Profit for the period                                                                     (888 590)      1 810 721        1 717 635      3 528 356
 
Non-controlling interests                                                                  (36 696)       (36 696)            (674)       (37 370)

Profit for the period attributable to Redefine Properties Limited shareholders            (925 286)      1 774 025        1 716 961      3 490 986

Segmental analysis        
for the year ended 31 August 2017        
Figures in R'000s                                                                               Office        Retail    Industrial    Specialised   
STATEMENT OF FINANCIAL POSITION         
Investment properties                                                                       22 294 016    24 523 035    11 021 088      1 405 085   
Properties under development                                                                   619 677       802 840     1 311 752        727 214   
Listed securities                                                                                    -             -             -              -   
Goodwill and intangible assets                                                               1 913 810     2 883 662       510 710         60 888   
Investment in associates and joint ventures                                                          -             -             -              -   
Loans receivable                                                                                     -             -             -              -   
Non-current assets held-for-sale                                                               999 916     1 119 878       196 051              -   
Other assets                                                                                         -             -             -              -   
           
Total assets                                                                                25 827 419    29 329 415    13 039 601      2 193 187   
          
Interest-bearing borrowings                                                                          -             -             -              -   
Interest-bearing borrowings at fair value                                                            -             -             -              -   
Other liabilities                                                                                    -             -             -              -   
           
Total liabilities                                                                                    -             -             -              -   
         
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME         
Contractual rental income                                                                    2 678 250     3 180 999     1 240 932        200 640   
Straight-line rental income accrual                                                            207 323       130 164       140 991        (9 188)   
Investment income                                                                                    -             -             -              -   
         
Total revenue                                                                                2 885 573     3 311 163     1 381 923        191 452   
Operating costs                                                                              (859 001)   (1 223 835)     (345 826)       (69 026)   
Administration costs                                                                                 -             -             -              -   
          
Net operating profit                                                                         2 026 572     2 087 328     1 036 097        122 426   
Other gains                                                                                          -             -             -              -   
Changes in fair values of properties, listed securities and financial instruments            (442 045)       348 034       319 967       (32 996)   
Amortisation of intangible assets                                                                    -             -             -              -   
Impairments                                                                                          -             -             -              -   
Equity-accounted profit (net of taxation)                                                            -             -             -              -   
          
Profit before finance costs and taxation                                                     1 584 527     2 435 362     1 356 064         89 430   
Interest income                                                                                      -             -             -              -   
Interest expense                                                                                     -             -             -              -   
Foreign exchange gains                                                                               -             -             -              -   
         
Profit before taxation                                                                       1 584 527     2 435 362     1 356 064         89 430   
Taxation                                                                                             -             -             -              -   
         
Profit from continuing operations                                                            1 584 527     2 435 362     1 356 064         89 430   
Loss from discontinued operations (net of taxation)                                                  -             -             -              -   
         
Profit for the year                                                                          1 584 527     2 435 362     1 356 064         89 430   
          
Non-controlling interests                                                                            -             -             -              -   
          
Profit for the year attributable to Redefine Properties Limited shareholders                 1 584 527     2 435 362     1 356 064         89 430   

Figures in R'000s                                                                      Head office        SA total    International    Group total
STATEMENT OF FINANCIAL POSITION 
Investment properties                                                                            -      59 243 224                -     59 243 224
Properties under development                                                                     -       3 461 483          487 386      3 948 869
Listed securities                                                                        1 215 323       1 215 323          238 671      1 453 994
Goodwill and intangible assets                                                             439 989       5 809 059                -      5 809 059
Investment in associates and joint ventures                                                      -               -       15 253 726     15 253 726
Loans receivable                                                                         1 748 501       1 748 501           96 154      1 844 655
Non-current assets held-for-sale                                                                 -       2 315 845           87 911      2 403 756
Other assets                                                                             1 535 328       1 535 328                -      1 535 328
   
Total assets                                                                             4 939 141      75 328 763       16 163 848     91 492 611
  
Interest-bearing borrowings                                                             29 622 915      29 622 915        2 836 673     32 459 588
Interest-bearing borrowings at fair value                                                        -               -        2 253 598      2 253 598
Other liabilities                                                                        2 861 899       2 861 899          131 341      2 993 240
   
Total liabilities                                                                       32 484 814      32 484 814        5 221 612     37 706 426
 
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 
Contractual rental income                                                                        -       7 300 821                -      7 300 821
Straight-line rental income accrual                                                              -         469 290                -        469 290
Investment income                                                                            5 076           5 076           18 652         23 728
 
Total revenue                                                                                5 076       7 775 187           18 652      7 793 839
Operating costs                                                                                  -     (2 497 688)                -    (2 497 688)
Administration costs                                                                     (251 444)       (251 444)          (8 197)      (259 641)
  
Net operating profit                                                                     (246 368)       5 026 055           10 455      5 036 510
Other gains                                                                                 14 874          14 874           78 321         93 195
Changes in fair values of properties, listed securities and financial instruments        (646 955)       (453 995)         (87 952)      (541 947)
Amortisation of intangible assets                                                         (62 856)        (62 856)                -       (62 856)
Impairments                                                                               (11 146)        (11 146)      (1 204 063)    (1 215 209)
Equity-accounted profit (net of taxation)                                                  130 191         130 191        1 463 196      1 593 387
  
Profit before finance costs and taxation                                                 (822 260)       4 643 123          259 957      4 903 080
Interest income                                                                            581 377         581 377           68 905        650 282
Interest expense                                                                       (2 083 458)     (2 083 458)        (294 600)    (2 378 058)
Foreign exchange gains                                                                           -               -          478 670        478 670
 
Profit before taxation                                                                  (2 324 341)      3 141 042          512 932      3 653 974
Taxation                                                                                  (174 076)      (174 076)         (65 766)      (239 842)
 
Profit from continuing operations                                                       (2 498 417)      2 966 966          447 166      3 414 132
Loss from discontinued operations (net of taxation)                                               -              -         (13 877)       (13 877)
 
Profit for the year                                                                     (2 498 417)      2 966 966          433 289      3 400 255
  
Non-controlling interests                                                                  (71 180)       (71 180)             (80)       (71 260)
  
Profit for the year attributable to Redefine Properties Limited shareholders            (2 569 597)      2 895 786          433 209      3 328 995

Segmental analysis
Reconciliation of profit for the period/year to distributable earnings
                                                                                            Unaudited             Unaudited              Audited
                                                                                             February              February               August
Figures in R'000s                                                                                2018                  2017                 2017
Profit for the period/year attributable to Redefine                                  
shareholders                                                                                4 690 515             3 490 986            3 328 995
Change in fair value (net of non-controlling interest)                                    (1 635 260)             (766 759)              593 811
                                  
- Change in fair value                                                                    (1 659 102)             (795 835)              541 947
- Non-controlling interest                                                                     23 842                29 076               51 864
                                  
Straight-line rental income accrual                                                               107             (149 135)            (469 290)
Loss on disposal of interest in associate                                                      52 514                     -                    -
Amortisation of intangible assets                                                              31 428                31 428               62 856
Impairments                                                                                   494 395                     -            1 215 209
Deferred taxation                                                                             158 960               166 896              176 439
Unrealised foreign exchange gain and realised foreign                                  
currency translations reserve                                                               (462 153)             (616 463)             (99 042)
Non-distributable items of associates                                                       (860 269)             (109 966)            (332 701)
Transactions costs relating to business acquisitions                                                -                 7 131               19 892
Antecedent distribution                                                                        27 170                11 159               30 677
Accrual for listed security income (REIT distribution                                  
declared post year end)                                                                         8 680                43 459               42 884
Adjustment to distributable profit from discontinued                                  
operations                                                                                          -                24 544               24 557
Cornwall interest                                                                              15 328                     -               31 216
Other distributable income                                                                     14 671                13 246               16 210
Pivotal pre-acquisition distribution                                                                -               189 037              189 037
                                  
Distributable income for the period/year                                                    2 536 086             2 335 563            4 830 750
                                   
- Interim                                                                                   2 536 086             2 335 563            2 335 563
- Final                                                                                             -                     -            2 495 187
                                   
Actual number of shares in issue ('000)^                                   
- Interim                                                                                   5 361 701             5 210 982            5 210 982
- Final                                                                                             -                     -            5 288 655
                                  
Distribution per share (cents)                                                                  47.30                 44.82                92.00
                                   
- Interim                                                                                       47.30                 44.82                44.82
- Final                                                                                             -                     -                47.18

^ Excludes 361 396 896 (28 February and 31 August 2017: 361 396 896) treasury shares. Includes 40 million 
  shares issued on 22 March 2018 (HY17 and FY17: nil), that rank for the 2018 interim distribution.

Distributable income analysis

Figures in R'000s                                                                                     South Africa    International        Total
Contractual rental income (excluding straight-line                                  
rental accrual)                                                                                          3 852 118            3 351    3 855 469
Investment income                                                                                           75 188            2 575       77 763
                                  
Total revenue                                                                                            3 927 306            5 926    3 933 232
Operating costs                                                                                        (1 304 454)          (1 783)  (1 306 237)
Administration costs                                                                                     (113 683)         (11 115)    (124 798)
                                  
Net operating profit                                                                                     2 509 169          (6 972)    2 502 197
Other gains                                                                                                 11 350            8 551       19 901
Distributable equity income                                                                                      -          688 045      688 045
                                  
Net distributable profit before finance costs and taxation                                               2 520 519          689 624    3 210 143
Net interest costs                                                                                       (673 466)        (106 286)    (779 752)
                                  
- Interest income                                                                                          409 650           58 309      467 959
- Interest expense                                                                                     (1 083 116)        (164 595)  (1 247 711)
                                  
Distributable foreign exchange gain                                                                              -           89 871       89 871
                                  
Net distributable profit before taxation                                                                 1 847 053          673 209    2 520 262
Current taxation and withholding taxation                                                                        -         (40 190)     (40 190)
                                  
Net income from operations before non-controlling                                   
interest share                                                                                           1 847 053          633 019    2 480 072
Non-controlling interest share of distributable income                                                    (10 205)              370      (9 835)
                                      
Net income before distributable adjustments                                                              1 836 848          633 389    2 470 237
Below the line distributable income adjustments:                                      
- Antecedent distribution                                                                                   27 170                -       27 170
- Accrual for listed security income                                                                             -            8 680        8 680
- Cornwall interest income                                                                                  15 328                -       15 328
- Other distributable income                                                                                14 671                -       14 671
                                      
Distributable income                                                                                     1 894 017          642 069    2 536 086

Financial instruments and investment property
fair value disclosure

CATEGORIES OF FINANCIAL INSTRUMENTS
                                                            Unaudited 28 February 2018                       Unaudited 28 February 2017            
                                                                    At fair value                                   At fair value                  
Financial assets                                    Loans and     through profit                     Loans and     through profit                  
Figures in R'000s                                 receivables            or loss            Total  receivables            or loss           Total  
Listed securities                                           -          1 196 341        1 196 341            -            274 007         274 007  
Derivative assets#                                          -            251 195          251 195            -            262 680         262 680  
Loans receivable                                    2 679 806                  -        2 679 806    1 845 445                  -       1 845 445  
Other financial assets                                      -            384 934          384 934            -            258 583         258 583  
Trade and other receivables                           752 099                  -          752 099      611 261                  -         611 261  
Cash and cash equivalents                             323 441                  -          323 441      683 651                  -         683 651  
 
                                                    3 755 346          1 832 470        5 587 816    3 140 357            795 270       3 935 627  


                                                            Unaudited 28 February 2018                       Unaudited 28 February 2017            
                                                        Other      At fair value                         Other       At fair value                 
Financial liabilities                               financial     through profit                     financial      through profit                 
Figures in R'000s                                 liabilities            or loss            Total  liabilities             or loss          Total  
Interest-bearing borrowings                        32 603 818                  -       32 603 818   32 288 752                   -     32 288 752  
Interest-bearing borrowings at fair value                   -          2 079 117        2 079 117            -           1 962 679      1 962 679  
Interest accrual on interest-bearing borrowings       382 800                  -          382 800      377 129                   -        377 129  
Derivative liabilities#                                     -            291 171          291 171            -             147 376        147 376  
Other financial liabilities                           253 875                  -          253 875      252 925                   -        252 925  
Trade and other payables                            1 095 835                  -        1 095 835    1 017 978                   -      1 017 978  
 
                                                   34 336 328          2 370 288       36 706 616   33 936 784           2 110 055     36 046 839  

                                                                                                             Audited 31 August 2017
                                                                                                                   At fair value
Financial assets                                                                                  Loans and       through profit
Figures in R'000s                                                                               receivables              or loss            Total
Listed securities                                                                                         -            1 453 994        1 453 994
Derivative assets#                                                                                        -               77 743           77 743
Loans receivable                                                                                  1 844 655                    -        1 844 655
Other financial assets                                                                               29 519              253 038          282 557
Trade and other receivables                                                                         711 498                    -          711 498
Cash and cash equivalents                                                                           180 661                    -          180 661
 
                                                                                                  2 766 333            1 784 775        4 551 108


                                                                                                             Audited 31 August 2017
                                                                                                      Other        At fair value
Financial liabilities                                                                             financial       through profit
Figures in R'000s                                                                               liabilities              or loss            Total
Interest-bearing borrowings                                                                      32 459 588                    -       32 459 588
Interest-bearing borrowings at fair value                                                                 -            2 253 598        2 253 598
Interest accrual on interest-bearing borrowings                                                     406 849                    -          406 849
Derivative liabilities#                                                                                   -              499 363          499 363
Other financial liabilities                                                                         257 728                    -          257 728
Trade and other payables                                                                            996 644                    -          996 644
 
                                                                                                 34 120 809            2 752 961       36 873 770
For all financial instruments carried at amortised cost, interest is market related therefore the amortised cost
approximates the fair value.
#The derivatives are classified as held-for-trading in terms of IAS 39.

Financial instruments and investment property
fair value disclosure

Fair value hierarchy for financial instruments
and investment property

IFRS 13 requires that an entity discloses for each class of financial instruments and investment property
measured at fair value, the level in the fair value hierarchy into which the fair value measurements are
categorised in their entirety.

The fair value hierarchy reflects the significance of the inputs used in making fair value measurements.

The level in the fair value hierarchy within which the fair value measurement is categorised in its
entirety shall be determined on the basis of the lowest level input that is significant to the fair value
measurement in its entirety.

The table below analyses financial instruments and investment property carried at fair value.

The fair value hierarchy has the following levels:

Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 - inputs other than quoted prices included within level 1 that are observable for the asset or
          liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

There have been no transfers between level 1, level 2 and level 3 during the period under review.

FAIR VALUE HIERARCHY FOR FINANCIAL INSTRUMENTS AND INVESTMENT PROPERTY
                                                                                             Unaudited 28 February 2018
Figures in R'000s                                                           Fair value               Level 1        Level 2      Level 3
Assets                            
Investment property*                                                        66 507 567                     -              -   66 507 567
Listed securities                                                            1 196 341             1 196 341              -            -
Derivative assets                                                              251 195                     -        251 195            -
Other financial assets                                                         384 934               253 875              -      131 059
                                                                            68 340 037             1 450 216        251 195   66 638 626
Liabilities                             
Interest-bearing borrowings at fair value                                    2 079 117             2 079 117              -            -
Derivative liabilities                                                         291 171                     -        291 171            -
                                                                             2 370 288             2 079 117        291 171            -
                            
                            
                                                                                              Unaudited 28 February 2017
Figures in R'000s                                                           Fair value               Level 1        Level 2      Level 3
Assets                            
Investment property*                                                        64 713 119                     -              -   64 713 119
Listed securities                                                              274 007               274 007              -            -
Derivative assets                                                              262 680                     -        262 680            -
Other financial assets                                                         258 583               258 583              -            -
                                                                            65 808 389               532 590        262 680   64 713 119
Liabilities                            
Interest-bearing borrowings at fair value                                    1 962 679             1 962 679              -            -
Derivative liabilities                                                         147 376                     -        147 376            -
                                                                             2 110 055             1 962 679        147 376            -
                            
                            
                                                                                                Audited 31 August 2017
Figures in R'000s                                                           Fair value               Level 1        Level 2      Level 3
Assets                            
Investment property*                                                        65 595 849                     -              -   65 595 849
Listed securities                                                            1 453 994             1 453 994              -            -
Derivative assets                                                               77 743                     -         77 743            -
Other financial assets                                                         253 038               253 038              -            -
                                                                            67 380 624             1 707 032         77 743   65 595 849
Liabilities                            
Interest-bearing borrowings at fair value                                    2 253 598             2 253 598              -            -
Derivative liabilities                                                         499 363                     -        499 363            -
                                                                             2 752 961             2 253 598        499 363            -
* Including properties under development and non-current assets (properties) held-for-sale.

LEVEL 3 RECONCILIATION
                                                                                      Unaudited 28 February 2018
                                                                   Balance at        Gain/(loss) in
                                                                 beginning of        profit or loss      Acquisition/    Balance at end
                                                                         year        for the period        (disposal)         of period
                           
Investment property                                                59 243 224             1 239 003           976 121        61 458 348
Properties under development                                        3 948 869             (129 329)           632 669         4 452 209
Investment property held-for-sale                                   2 403 756                72 668       (1 879 414)           597 010
Other financial assets                                                      -              (11 810)           142 869           131 059
                          
                                                                   65 595 849             1 170 532         (127 755)        66 638 626
                          
                                                                                     Unaudited 28 February 2017
                                                                   Balance at        Gain/(loss) in
                                                                 beginning of        profit or loss      Acquisition/    Balance at end
                                                                         year        for the period        (disposal)         of period
                          
Investment property                                                49 698 640               421 280         9 160 692        59 280 612
Properties under development                                        2 030 041             (128 910)         2 468 184         4 369 315
Investment property held-for-sale                                   1 170 172                     -         (106 980)         1 063 192
                          
                                                                   52 898 853               292 370        11 521 896        64 713 119
                          
                                                                                       Audited 31 August 2017
                                                                   Balance at        Gain/(loss) in
                                                                 beginning of        profit or loss      Acquisition/    Balance at end
                                                                         year          for the year        (disposal)           of year
                          
Investment property                                                49 698 640             1 258 324         8 286 260        59 243 224
Properties under development                                        2 030 041             (748 134)         2 666 962         3 948 869
Investment property held-for-sale                                   1 170 172               (7 973)         1 241 557         2 403 756
                          
                                                                   52 898 853               502 217        12 194 779        65 595 849

The fair value gains and losses are included in the fair value adjustment line in profit or loss.

Details of valuation techniques
The valuation techniques used in measuring fair values at 28 February 2018 for financial instruments
measured at fair value in the statement of financial position, as well as the significant unobservable
inputs used is disclosed below. There have been no significant changes in valuation techniques and
inputs since 31 August 2017.

Listed securities
Closing market price on the relevant exchange.

DERIVATIVE ASSETS AND LIABILITIES
FOREIGN EXCHANGE OPTIONS
The fair value is determined using quoted forward exchange rates at the reporting date and present
value calculations based on high credit quality yield curves in the respective currencies.

INTEREST RATE SWAPS
The fair value is calculated as the present value of the estimated future cash flows. Estimates of future
floating-rate cash flows are based on quoted swap rates, futures prices and interbank borrowing
rates. Estimated cash flows are discounted using a yield curve constructed from similar sources which
reflects the relevant benchmark interbank rate used by market participants for this purpose when
pricing interest rate swaps. The fair value estimate is subject to a credit risk adjustment that reflects
the credit risk of the Group and of the counterparty. This is calculated based on credit spreads derived
from current credit default swap or bond prices.

OTHER FINANCIAL ASSETS
Dipula Income Fund Limited B shares
Closing market price on the JSE (Johannesburg Stock Exchange) limited to the outstanding loan
balance guaranteed in the Dipula BEE Trust.

Unlisted securities
The adjusted net asset value method is used to determine the fair value i.e. the fair value is measured
based on the fair value of the investee's assets and liabilities.

CROSS-CURRENCY INTEREST RATE SWAPS
The fair value is calculated by discounting the future cash flows using the swap curve of the respective
currencies at the dates when the cash flows will take place.

INTEREST-BEARING BORROWINGS AT FAIR VALUE
The exchangeable bonds fair value is determined with reference to the quoted Bloomberg Valuation
Service (BVAL) price.

INVESTMENT PROPERTIES
The valuation policy adopted by management is to revalue investment property at each reporting
period, valued externally for the both interim reporting and financial statements. The changes in fair
value from the previous reporting period are analysed by management.

Current market-related assumptions were applied to the risks in rental streams of properties.
Discount rates in the respective sectors are disclosed below.

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

Unobservable inputs (% unless                                       Unaudited               Unaudited                 Audited
otherwise stated)                                            28 February 2018        28 February 2017          31 August 2017
Expected market rental growth                                     4.00 - 6.00             4.00 - 8.00             4.00 - 6.00
Expected expense growth                                           7.00 - 9.00            7.00 - 10.00             7.00 - 9.00
Occupancy rate                                                          95.05                   93.30                   94.10
Vacancy periods                                                 0 - 12 months           0 - 12 months           0 - 12 months
Rent-free periods                                                0 - 3 months            0 - 3 months            0 - 3 months

Office sector
Discount rate                                                    9.98 - 18.00           12.50 - 18.00           11.50 - 18.50
Exit capitalisation rate                                         7.50 - 13.00            7.25 - 13.00            7.50 - 13.00
Bulk rate                                                R1 750 - R5 400 p/m2    R1 750 - R5 400 p/m2    R1 750 - R5 400 p/m2

Retail sector
Discount rate                                                   11.04 - 18.00           12.25 - 19.25           11.00 - 18.00
Exit capitalisation rate                                         7.00 - 12.00            7.00 - 12.50            7.25 - 12.50
Bulk rate                                                R1 200 - R3 000 p/m2    R1 200 - R3 000 p/m2    R1 200 - R3 000 p/m2

Industrial sector
Discount rate                                                   13.25 - 18.00           13.00 - 18.50           13.50 - 17.00
Exit capitalisation rate                                         8.00 - 13.00            8.00 - 14.00            8.00 - 12.50
Bulk rate                                                  R643 - R2 500 p/m2      R643 - R2 500 p/m2      R643 - R2 500 p/m2

Specialised sector
Discount rate                                                   14.00 - 16.50                   15.00           14.00 - 16.25
Exit capitalisation rate                                         8.00 - 10.50                    9.00            8.00 - 10.25

Measurement of fair value
VALUATION TECHNIQUES
All valuations were completed using the discounted cash flow method of valuation.

INVESTMENT PROPERTIES - DISCOUNTED CASH FLOW METHOD
The valuation model generates a net present value for each property by discounting forecasted future
cash flows and a residual value at the end of the cash flow projection period by the discount rate of each
property. The residual value is calculated by capitalising the net income forecasted for the 12-month
period immediately following the final year of the cash flow at the exit capitalisation rate. The discount
rate applied by each valuator is determined by adding a growth rate per property, based on forecasted
market-related rental increases, to the determined capitalisation rate per property. The discount
rate is then tested for reasonableness by benchmarking the rate against recent comparable sales
and surveys prepared by Investment Property Databank/South African Property Owners Association
(IPD/SAPOA). The capitalisation rate is dependent on a number of factors, such as location, the
condition of the improvements, current market conditions, the lease covenants and the risk inherent
in the property, which is also tested for reasonableness by benchmarking against recent comparable
sales and surveys prepared by IPD/SAPOA.

PROPERTIES UNDER DEVELOPMENT - COMPARABLE SALES METHOD
Properties under development comprise of the cost of land and development, and are measured at
fair value. Fair value is based on the costs incurred up to the date of the valuation. Undeveloped land
is valued in terms of the internationally accepted and preferred method of comparison. This involves
the use of recent comparable transactions as a basis for the valuation. Bulk rates are determined for
the land that has been zoned.

INTER-RELATIONSHIP BETWEEN KEY UNOBSERVABLE INPUTS AND FAIR
VALUE MEASUREMENTS

The estimated fair value would increase/(decrease) if:
- Expected market rental growth was higher/(lower);
- Expected expense growth was lower/(higher);
- Vacant periods were shorter/(longer);
- Occupancy rate was higher/(lower);
- Rent-free periods were shorter/(longer);
- Discount rate was lower/(higher);
- Exit capitalisation rate was lower/(higher);
- Capitalisation rate was lower/(higher); or
- Bulk rate was higher/(lower).

Redefine Properties Limited
(Incorporated in the Republic of South Africa)
Registration number: 1999/018591/06
JSE share code: RDF ISIN: ZAE000190252
(Redefine or the Company or the Group)
(Approved as a REIT by the JSE)

Executive directors:
M Wainer (Executive chairman)
AJ Konig (Chief executive officer)
LC Kok (Financial director)

Non-executive directors:
B Mathews (Deputy Chairperson and lead independent)*
B Nackan *
DA Nathan*
HK Mehta
M Barkhuysen*
NB Langa-Royds*
P Langeni*
*Independent

Registered office:
Rosebank Towers, Office Level 5, 19 Biermann Avenue, Rosebank 2196
(PO Box 1731, Parklands 2121)

Transfer secretaries:
Computershare Investor Services Proprietary Limited

Sponsor:
Java Capital

Company secretary:
B Baker

Independent auditors:
KPMG Inc

www.redefine.co.za



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