audited annual financial 2017statements...the annual financial statements, the going concern basis...

AUDITEDANNUAL FINANCIAL

STATEMENTS

2017

INDUSTRIAL RETAIL OFFICE RESIDENTIAL REST OF AFRICA

Page

DIRECTORS' RESPONSIBILITY............................................................................................................... 1

DECLARATION BY THE SECRETARY........................................................................................................ 1

DIRECTORS' REPORT........................................................................................................................... 2

REPORT OF THE AUDIT COMMITTEE....................................................................................................... 4

INDEPENDENT AUDITOR'S REPORT........................................................................................................ 8

STATEMENTS OF FINANCIAL POSITION.................................................................................................. 12

STATEMENTS OF COMPREHENSIVE INCOME............................................................................................ 13

STATEMENTS OF CHANGES IN EQUITY................................................................................................... 14

STATEMENTS OF CASH FLOWS.............................................................................................................. 16

NOTES TO THE ANNUAL FINANCIAL STATEMENTS.................................................................................... 17

APPENDIX A: STATUTORY INFORMATION................................................................................................ 76

APPENDIX B: PROPERTY PORTFOLIO REVIEW.......................................................................................... 78

APPENDIX C: PROPERTY PORTFOLIO...................................................................................................... 80

Cover pictures from left to right:96,15th Road, Randjespark, Midrand, Gauteng

Stellenbosch Square, Stellenbosch, Western CapeGreen Park Corner, Cnr West Road South & Lower Road, Sandton, Gauteng

Cavendish House, Johannesburg, GautengEast Park Mall, Lusaka, Zambia

SA CORPORATE REAL ESTATE I ANNUAL FINANCIAL STATEMENTS 2017

SA CORPORATE REAL ESTATE LIMITEDRegistration nr. 2015/015578/06

Contents To The Audited Annual Financial Statements For The Year Ended 31 December 2017

Davenport Square Shopping Centre, Bulwer Road, Durban, KwaZulu-Natal

RJ Biesman-SimonsChairman: Audit Committee

The directors of SA Corporate Real Estate Limited (“the Company”) are responsible for the preparation and integrity ofthe annual financial statements and the related information included in the annual financial statements of the Companyand all its subsidiaries (“the Group”). In order for the Board of Directors (“the Board”) to discharge its responsibilities,management has developed and continues to maintain a system of internal control. The Board has ultimate responsibilityfor the system of internal control and reviews its operation, primarily through the Risk and Compliance Committee andthe Audit Committee.

The internal controls include a risk-based system of internal accounting and administrative controls designed to providereasonable but not absolute assurance that the assets are safeguarded and that transactions are executed and recordedin accordance with generally accepted business practices and the Group and the Company's policies and procedures.These controls are implemented by trained, skilled personnel with appropriate segregation of duties, are monitored bymanagement and the Risk and Compliance Committee and the Audit Committee, and include a comprehensive budgetingand reporting system operating within an appropriate control framework.

The external auditors are responsible for reporting on the annual financial statements in conformity with InternationalStandards on Auditing, and their opinion is included on pages 8 to 11. The annual financial statements are prepared inaccordance with International Financial Reporting Standards and the requirements of the Companies Act, No. 71 of 2008,and incorporate disclosures in line with the accounting practices of the Group and the Company. They are based onappropriate accounting policies consistently applied, except where otherwise stated, and are supported by reasonablejudgements and estimates.

The directors believe that the Group and the Company will be a going concern in the year ahead. Accordingly, in preparingthe annual financial statements, the going concern basis has been adopted.

The annual financial statements for the year ended 31 December 2017 as set out on pages 12 to 85 were approved bythe Board of Directors on 27 February 2018 and are signed on its behalf by:

J MolobelaChairman: Independent Non-Executive

These annual financial statements have been prepared under the supervision of:AM Basson CA (SA)Financial Director

SA CORPORATE REAL ESTATE I ANNUAL FINANCIAL STATEMENTS 2017 1

DECLARATION BY THE SECRETARYFor the year ended 31 December 2017

The secretary certifies that the Company has lodged with the Commissioner of the Companies Act all such returns asare required of a public company, in terms of section 88(2)(e) of the Companies Act, No. 71 of 2008 and that all suchreturns and notices are true, correct and up to date.

B SwanepoelCompany secretary27 February 2018

DIRECTORS’ RESPONSIBILITYFor And Approval Of The Annual Financial Statements


DIRECTORS' REPORTFor the year ended 31 December 2017

The directors are pleased to present their report that forms part of the annual financial statements for the year ended31 December 2017.

Nature of businessSA Corporate Real Estate Limited (Company registration: 2015/015578/06) is a JSE-listed Real Estate Investment Trust(“REIT”) which owns a diversified property portfolio of 196 (2016: 179) directly owned properties in the industrial, retail,commercial, storage and residential buildings located primarily in the major metropolitan areas of South Africa with asecondary node in Zambia comprising 3 properties in the retail and commercial sectors.

Shareholders' equity Company Company2017 2016

Shares in issue 2 530 689 337 2 417 481 790

Investment in subsidiariesThe Company's beneficial ownership of shares in property companies is listed in Note 6.

DividendsDividends of R1 088 134 188 (2016: R949 329 763) were declared during the year.

DirectorateThe following individuals acted as directors during the year under review and at the date of this report:

Director Date appointedIndependent non-executive chairmanJ Molobela 25 March 2015

Independent non-executive directorsRJ Biesman-Simons 16 February 2015A Chowan 13 April 2017GP Dingaan 25 March 2015KJ Forbes 25 March 2015EM Hendricks 25 March 2015MA Moloto 25 March 2015ES Seedat 25 March 2015

Executive DirectorsTR Mackey (Managing) 19 January 2015AM Basson (Financial) 19 January 2015

The table below sets out the directors' fees and remuneration for the year: Company Company2017 2016R000 R000

Non-executiveRJ Biesman-Simons 759 583GP Dingaan 444 313A Chowan 270 -KJ Forbes 556 410EM Hendricks 396 398J Molobela 634 444MA Moloto 678 365ES Seedat 488 332

ExecutiveAM Basson 3 545 3 437TR Mackey 5 639 5 618Total 13 409 11 900


Company Company2017 2016

Shares SharesDirectorate ›› (continued)Awarded forfeitable shares in the Company:

TR Mackey Forfeitable share plan 2 248 108 2 345 291 Co-investment plan # 327 354 491 031

AM Basson Forfeitable share plan 1 282 100 1 328 485 Co-investment plan 77 276 -

Total 3 934 838 4 164 807

# TR Mackey had not exercised his option in respect of the 163 677 shares that vested at the time when the Groupentered into a closed period. These shares are therefore not reflected in the co-investment plan balance at 31 December2017.

AuditorsDeloitte & Touche continued in office as auditors of the Company for 2017. At the Annual General Meeting, shareholderswill be requested to reappoint Deloitte & Touche as auditors of SA Corporate Real Estate Limited for the 2018 financialyear.

Going concernThe financial statements have been prepared on the going concern basis.

Company secretaryB Swanepoel

Registered and business addressSouth Wing, First FloorBlock A, The ForumNorth Bank LaneCentury City7441

DIRECTORS' REPORTFor the year ended 31 December 2017 ›› (continued)


The Audit Committee has pleasure in submitting its report as required by section 94(7)(f) of the Companies Act, No.71 of 2008 (“the Act”).

Overall role, responsibilities and functionIn addition to having statutory responsibilities to the shareholders, the Audit Committee (“the Committee”) is asubcommittee of the Board of Directors (“the Board”). It assists the Board through advising and making recommendationson financial reporting, internal financial controls, external and internal audit functions, statutory and regulatory complianceof SA Corporate Real Estate Limited (“the Company”). The Committee oversees co-operation between the internal andexternal auditors, serving as a link between the Board and these functions.

Terms of referenceThe Committee has adopted formal terms of reference, delegated to it by the Board of its scope and responsibilities.The Committee follows an annual work plan to ensure all its duties and responsibilities as set out in its terms of referenceare dealt with. The Committee confirms that it has discharged its functions and complied with its terms of reference forthe year ended 31 December 2017.

CompositionThe Committee consists of four independent non-executive directors. All members are independent as described in section94(4) of the Act and have as a whole, the necessary financial literacy, skills and experience to carry out their dutieseffectively. The appointment of members of the Committee requires the approval of the shareholders at the AnnualGeneral Meeting each year.

SA Corporate Real Estate Fund (“the Fund”) was reconstituted as SA Corporate Real Estate Limited with effect from 1July 2015. As the Company is effectively a continuation of the Fund, the members of the Audit Committee of the managerof the Fund, SA Corporate Real Estate Fund Managers Proprietary Limited (“the Manager”), were appointed to theCompany with effect from that date.

The following directors served on the Audit Committee for the year ended 31 December 2017:

REPORT OF THE AUDIT COMMITTEEFor the year ended 31 December 2017

The Managing Director, Financial Director and representatives from the external and internal auditors attend the Committeemeetings by invitation. The Company Secretary acts as secretary to the Committee.

MeetingsThe Committee held four meetings during the year, one of which was a combined meeting with the Investment Committee,to deal with matters of mutual interest. Separate confidential meetings were held with the internal and external auditorswithout management being present.

Statutory dutiesThe Committee discharged its function in terms of the Act as follows:

� Nominated Deloitte & Touche as external auditor and Ms CL Ringwood as the designated independent auditor.� Approved the external audit fees and reviewed the external auditor's terms of engagement.� Ensured that the appointment of the external auditors complies with section 90 of the Act and the JSE Listing Requirements.� Determined and approved the nature and extent of allowable non-audit services provided by the external auditor.

NAME

Robert JohnBiesman-Simons

(Chairman)Ebrahim Suleman

SeedatGugulethu Patricia

DingaanAdila Chowan

QUALIFICATIONS

CA(SA)

CA(SA)

CA(SA)

CA(SA)

DATE APPOINTED

1 July 2015

1 July 2015

1 July 2015

13 April 2017

MEETING ATTENDANCE

4/4

3/4

4/4

3/3


Statutory duties ›› (continued)� Reviewed the accounting policies, the content and auditing of financial statements, the internal financial controls

and other related matters.� Made submissions to the Board on matters concerning the Group's accounting policies, standards, financial control, records and reporting.� Reviewed the Company's and Group's year-end financial statements as well as the integrated annual report.� Took appropriate steps to ensure that the financial statements were prepared in accordance with International

Financial Reporting Standards, the JSE Listings Requirements, and the requirements of the Act and other applicable legislation.� Dealt with queries relating to the accounting practices, the content and auditing of its financial statements, the

internal financial controls of the Company and any other related matters.

Delegated dutiesThe Committee executed the duties delegated to it as follows:

� Reviewed the external audit approach and scope and reviewed the quality and effectiveness of the external audit process.� Reviewed the performance of the internal audit function.� Approved the internal audit plan, approach and fees.� Discussed and reviewed the findings, problems and concerns arising from the internal and external audit.� Monitored compliance with legislation and regulations.� Reviewed the effectiveness of the Company's system of internal financial control, including receiving assurances

from its property manager, Broll, management, internal and external audit.� Ensure that the Combined Assurance framework is applied to provide a coordinated approach to all assurance

activities.� Monitor compliance with the valuation policy and recommended approval of the property valuations to the Board.� Reviewed the budgets and recommended to the Board for approval.� Recommended approval of the interim and final results, distributions and SENS announcements to the Board.� Approved the extension of loan and overdraft facilities and recommended new debt facilities that increase the

gearing level to the Board for approval.� Review and approval of swap derivatives, fixes and currency hedging.� Reviewed compliance with the financial conditions of loan covenants.� Approved the provision of property as security for debt and the structuring thereof.� Review of taxation matters.� Oversee the management of financial and other risks that affect the integrity of external reports issued by the

Company.� Reviewed compliance with the Committee's terms of reference and recommended changes to its terms of reference, in alignment with King IV, to the Board.� Reported back to the Board on matters delegated to it in terms of its terms of reference.� Reviewed exposure to banks.

Key focus areas for 2017� Appointed Grant Thornton as the new internal auditor.� Considered and noted the JSE's most recent general report back on the pro-active monitoring of financial statements. The Committee and Company is committed to the highest standards of financial disclosure.� Review of the King IV gap analysis performed by the Company Secretary.� VAT attribution dispute with SARS.

The internal auditors, Grant Thornton, provided written assurance that, based on their work performed in 2017, theexisting internal controls at the Group and the Company are adequate and effective and there were no major deficiencies.

Based on the processes reviewed and the assurances obtained, the Committee believes that the internal financial controlsare effective. No financial losses, fraud, corruption or errors as a result of poor internal controls were identified.

REPORT OF THE AUDIT COMMITTEEFor the year ended 31 December 2017 ›› (continued)



Key audit matterValuation of investment propertyThe fair value of investment properties was determined by an experienced independent valuer, Quadrant PropertiesProprietary Limited. The valuation methodology and assumptions are subject to robust reviews by the Management, theInvestment Committee and Audit Committee before being recommended to the Board for approval. The Group has aproperty valuation policy and the sub-committees of the Board ensure compliance therewith. The fair value of theindustrial, retail, commercial and storage portfolio of investment properties, excluding properties subject to unconditionalcontracted sales, was based on the discounted cash flow method. The fair value of the inner-city and peri-urban retail,residential and commercial investment properties was based on the capitalisation of the net income earnings in perpetuity.The discounted cash flow method is not appropriate in this portfolio due to the short term nature of the portfolio's leases.The Committee and Board carefully considered the increase in the valuations and the fair values and believe that thatthey are appropriate and justified.

Regulatory complianceThe Committee confirms that it has complied with all applicable legal, regulatory and other responsibilities.

Independence of the external auditorsThe Committee performed its own rigorous assessment of the independence of the external auditor, as required by thecurrent governance requirements covered by the Companies Act and the King IV report on corporate governance.

This assessment included:� The tenure of the current engagement partner being less than five years and the audit firm's JSE accreditation;� The level of the audit fee agreed;� The extent and nature of non-audit services provided; and� The competence and expertise of the partner and the team.

The Committee has reviewed the policies and processes in place between the Company and Deloitte & Touche to ensurethat independence is maintained. These include the following:

� Assessment and pre-approval processes for engaging on non-audit services; and� Partner rotation after a five year period. The current partner, Ms CL Ringwood, was appointed in January 2015.

The nature of non-audit services provided during the year were as follows:� Taxation R 352 193� Regulatory presentation R 15 000� Agreed upon procedures R 19 660� Whistleblowing hotline R 15 000

The Committee's conclusion following the above assessment is that the policies and processes are in place to ensureindependence and that Deloitte & Touche is independent of the Group.

The Committee confirms that the external auditors have executed their audit responsibilities as required and that thequality of the audits performed and reports issued were good.

The Committee has therefore nominated Deloitte & Touche for re-appointment at the Annual General Meeting to be heldin May 2018.

The Committee has taken note of the introduction of mandatory audit firm rotation rule effective from 1 April 2023 interms of which an auditor may only serve a maximum of 10 years, with a 5 year cooling off period. Deloitte & Touchehas been the sole auditor of the Group for 11 years. Prior to that, Deloitte & Touche and PKF were the joint auditors ofthe Group for 12 years.

21 Fricker Road, Illovo, Gauteng


Finance functionAs required by the JSE Listings Requirements, the Committee is satisfied that the Financial Director, Ms Antoinette BassonCA(SA), possesses the appropriate expertise and experience to meet her responsibilities. The Committee similarly satisfieditself that the finance function is adequately resourced, effective and competent.

Combined assuranceThe Committee has the overall responsibility to ensure the combined assurance model is effective. It is based on threelevels of defence and assurance for all key risks identified. Level one is management-based assurance. Level two isassurance achieved through the oversight of the Board and its committees and level three is independent assuranceprovided by third parties such as the internal and external auditors, valuers, advisers and regulators.

The Committee is satisfied that the combined assurance framework appropriately addresses all the significant risks andmaterial matters.

Key focus areas in 2018The Committee will continue to deal with all its duties and responsibilities as set out in its terms of reference and annualwork plan. The following matters will receive additional focus in 2018:

� Settlement of VAT attribution dispute with SARS.� Adoption of new accounting standards effective from 1 January 2018.� IT Governance.

Integrated Annual ReportThe Committee will evaluate the integrity of the Integrated Annual Report for 2017 and ensure that it is prepared usingthe appropriate reporting standards, which meet the requirements of King IV and the JSE Listing Requirements in orderto recommend it to the Board for approval.

Financial statementsThe Committee recommends the annual financial statements to the Board for approval.

RJ Biesman-SimonsChairman: Audit Committee27 February 2018



Report on the Audit of the Consolidated and Separate Financial Statements

OpinionWe have audited the consolidated and separate financial statements of SA Corporate Real Estate Limited and its subsidiaries(“the Group”) set out on pages 12 to 75, which comprise the statements of financial position as at 31 December 2017,and the statements of comprehensive income, the statements of changes in equity and the statements of cash flowsfor the year then ended, and the notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidatedand separate financial position of the Group as at 31 December 2017, and its consolidated and separate financialperformance and its consolidated and separate cash flows for the year then ended in accordance with InternationalFinancial Reporting Standards (IFRSs) and the requirements of the Companies Act of South Africa.

Basis for OpinionWe conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under thosestandards are further described in the Auditor's Responsibilities for the Audit of the Consolidated and Separate FinancialStatements section of our report. We are independent of the Group in accordance with the Independent Regulatory Boardfor Auditors Code of Professional Conduct for Registered Auditors (IRBA Code) and other independence requirementsapplicable to performing audits of financial statements in South Africa. We have fulfilled our other ethical responsibilitiesin accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits inSouth Africa. The IRBA Code is consistent with the International Ethics Standards Board for Accountants Code of Ethicsfor Professional Accountants (Parts A and B). We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

Key Audit MatterKey Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of theconsolidated financial statements of the current period. These matters were addressed in the context of our audit of theconsolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separateopinion on the matter.

The Key Audit Matter below apply to the consolidated financial statements and there are no Key Audit Matters applicableto the separate financial statements.

INDEPENDENT AUDITOR’S REPORTTo The Shareholders Of SA Corporate Real Estate Limited

Key Audit Matter How the matter was addressed in the audit

Of the total assets of R19.4 billion, investment propertiesrepresents R15.7 billion. The fair value adjustment recordedin total comprehensive income is R0.4 billion.

Investment properties are carried at fair value per therequirements of IAS 40: Investment Properties. There area number of assumptions used in determining the fair valueof investment properties. The principal assumptions relateto: receipt of contracted rentals, expected future marketrentals, lease renewals, maintenance requirements, andappropriate discount and capitalisation rates.

The Directors make use of an external independent valuatorto determine the valuations of the investment properties.

Our procedures included:• Assessing the competence and independence of the external valuator;• Obtaining an understanding of the methods and assumptions applied by the valuator;• Debating and robustly challenging the assumptions and valuations prepared by the valuator;• Testing a sample of property valuations and reperforming valuations given the assumptions applied;

Valuation of Investment Property


Other InformationThe Directors are responsible for the other information. The other information comprises the Directors' Report, AuditCommittee's Report and Company Secretary's Certificate, as required by the Companies Act of South Africa, which weobtained prior to the date of this auditor's report and the Integrated Report, which is expected to be made available tous after that date. Other information does not include the consolidated financial statements and our auditor's reportthereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express anyform of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other informationand, in doing so, consider whether the other information is materially inconsistent with the financial statements or ourknowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor'sreport, we conclude that there is a material misstatement of this other information, we are required to report that fact.We have nothing to report in this regard.

Responsibilities of the Directors for the Consolidated and Separate Financial StatementsThe Directors are responsible for the preparation and fair presentation of the consolidated and separate financial statementsin accordance with International Financial Reporting Standards and the requirements of the Companies Act of SouthAfrica, and for such internal control as the Directors determine is necessary to enable the preparation of the consolidatedand separate financial statements that are free from material misstatement, whether due to fraud or error.

INDEPENDENT AUDITOR’S REPORTTo The Shareholders Of SA Corporate Real Estate Limited ›› (continued)

The model used to determine the fair values of investmentproperties is the discounted cash flow model in respect ofthe traditional portfolio and capitalisation rate in respectof the Afhco portfolio. The Group uses independent valuatorsto determine the fair values for all of the properties heldin these categories annually.

It is due to the quantum of the balance and key judgementin the assumptions used in the valuations, that this is akey audit matter.

The inputs with the most significant impact on thesevaluations are disclosed in note 7, and include discountrates and capitalisation rates.

• Comparing the valuations in the current year to those valuations derived in the previous period and

enlisting explanations for the unusual or unexpected movements, corroborating the explanations with

further testing as necessary;• Comparing the assumptions used to market related data and historical information specific to the Group;

and• Performing sensitivity analysis on the assumptions

applied in the model.

We also assessed the adequacy of the disclosures in respectof the investment properties note including the disclosureof the valuations, the accounting policies note and criticalaccounting estimates and judgements note.

We consider the competence and independence of theexternal expert to be in line with the industry norms andthe methods and assumptions applied by the expert to beconsistent and reasonable.

We consider the disclosure and balances in the investmentproperties note, the accounting policies note and criticalaccounting estimates and judgements to be appropriate.

Key Audit Matter How the matter was addressed in the audit

Valuation of Investment Property ›› (continued)



Responsibilities of the Directors for the Consolidated and Separate Financial Statements ›› (continued)In preparing the consolidated and separate financial statements, the Directors are responsible for assessing the Group'sand Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern andusing the going concern basis of accounting unless the Directors either intend to liquidate the Group and/or the Companyor to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Consolidated and Separate Financial StatementsOur objectives are to obtain reasonable assurance about whether the consolidated and separate financial statementsas a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report thatincludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conductedin accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraudor error and are considered material if, individually or in the aggregate, they could reasonably be expected to influencethe economic decisions of users taken on the basis of these consolidated and separate financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticismthroughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the

Group’s and Company's internal control.• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors.• Conclude on the appropriateness of the Director's use of the going concern basis of accounting and based on the

audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group and/or Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in

the consolidated and separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future

events or conditions may cause the Group and/or Company to cease to continue as a going concern.• Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and whether the consolidated and separate financial statements represent the underlying

transactions and events in a manner that achieves fair presentation.• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities

within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the auditand significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regardingindependence, and to communicate with them all relationships and other matters that may reasonably be thought tobear on our independence, and where applicable, related safeguards.

From the matters communicated with the Audit Committee, we determine those matters that were of most significancein the audit of the consolidated and separate financial statements of the current period and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure aboutthe matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.



Report on Other Legal and Regulatory RequirementsIn terms of the Independent Regulatory Board for Auditors (IRBA) Rule published in Government Gazette Number 39475dated 4 December 2015, we report that Deloitte & Touche has been the sole auditor of SA Corporate Real Estate Limitedfor 11 years. Prior to that, Deloitte & Touche and PKF were the joint auditors of SA Corporate Real Estate Limited for12 years.

Deloitte & ToucheRegistered AuditorsPer: Corinne RingwoodPartner27 February 2018

1st Floor, The SquareCape Quarter27 Somerset RoadGreen Point 8005Western Cape

National Executive: *LL Bam Chief Executive Officer; *TMM Jordan Deputy Chief Executive Officer, Clients & Industries;*MJ Jarvis Chief Operating Officer; *AF Mackie Audit & Assurance; *N Sing Risk Advisory; *NB Kader Tax & Legal; TPPillay Consulting; S Gwala BPS; *JK Mazzocco Talent & Transformation; MG Dicks Risk Independence & Legal; *TJ BrownChairman of the Board Regional Leader: MN AlbertsA full list of partners and directors is available on request.* Partner and Registered AuditorB-BBEE rating: Level 1 contribution in terms of the DTI Generic Scorecard as per the amended Codes of Good Practice


STATEMENTS OF FINANCIAL POSITIONas at 31 December 2017

Consolidated Company2017 2016 2017 2016

Notes R000 R000 R000 R000

Assets

Non-current assetsInvestment in subsidiary companies 6 - - 13 310 042 11 700 974 Shares - - 9 847 004 9 438 637 Loans - - 3 463 038 2 262 337Investment property 7 15 712 340 14 357 675 - - Letting commissions and tenant installations 7 48 187 54 410 - -Investment in joint ventures 41 847 033 799 389 847 033 799 389Property, plant and equipment 9 16 703 8 369 - -Intangible assets 10 81 904 81 904 - - Swap derivatives 17 138 849 37 444 132 682 2 667Rental receivable - straight line rental adjustment 191 348 175 695 - -Listed shares 11 170 260 52 800 170 260 52 800 Other financial assets 11 2 611 1 806 499 550Loans to developers 13 131 027 - 131 027 -Deferred taxation 19 - 1 909 - -

17 340 262 15 571 401 14 591 543 12 556 380

Current assetsTrade and other receivables 12 351 093 350 432 35 749 35 250 Loans to subsidiary companies 6 - - 103 932 70 667Other financial assets 11 215 795 112 090 - 1 347Swap derivatives 17 12 609 10 009 11 290 - Rental receivable - straight line rental adjustment 40 509 43 741 - -Inventory 157 71 - -Loans to developers 13 263 894 263 956 263 894 263 956Taxation receivable 852 437 - -Cash and cash equivalents 14 275 454 191 380 216 227 162 718

1 160 363 972 116 631 092 533 938Non-current assets held for sale:Properties classified as held for disposal 8 888 736 444 700 - -Letting commissions and tenant installations 8 1 535 994 - -

890 271 445 694 - - 2 050 634 1 417 810 631 092 533 938

Total assets 19 390 896 16 989 211 15 222 635 13 090 318

Share capital, reserves and liabilities

Share capital and reserves 15 13 008 861 12 070 009 12 991 891 12 042 663

Non-current liabilitiesInterest-bearing borrowings - local 16 4 481 806 3 318 983 - 370 983Interest-bearing borrowings - foreign 16 93 605 112 475 - -Swap derivatives 17 154 554 8 355 129 963 - Loans from subsidiary 6 - - 619 706 27 237Loan from non-controlling shareholder 18 90 191 - - -Deferred taxation 19 1 616 - - -

4 821 772 3 439 813 749 669 398 220Current liabilitiesTrade and other payables 20 349 073 302 082 28 875 24 680Loans from subsidiary companies 6 - - 1 447 174 622 261Interest bearing borrowings - local 16 1 175 357 1 152 000 - -Interest bearing borrowings - foreign 16 17 019 17 019 - -Swap derivatives 17 18 474 8 288 5 026 2 494Taxation payable 340 - - -

1 560 263 1 479 389 1 481 075 649 435

Total share capital, reserves and liabilities 19 390 896 16 989 211 15 222 635 13 090 318


STATEMENTS OF COMPREHENSIVE INCOMEfor the year ended 31 December 2017


Notes R000 R000 R000 R000

Revenue 2 113 844 1 833 085 1 041 365 880 835

IncomeRent 23 1 509 933 1 328 181 - - Straight line rental adjustment 23 31 387 13 094 - - Recovery of property expenses 23 572 524 491 810 - -Dividends from subsidiary companies andinvestment in listed shares 23 16 138 - 979 464 851 581Other income 23 17 096 - 6 427 - Interest income 23 78 263 48 349 55 474 29 254

Total Income 2 225 341 1 881 434 1 041 365 880 835

ExpensesAudit fees (3 276) (2 950) (220) -Administrative fees (60 631) (58 440) (9 931) -Depreciation 9 (4 126) (2 422) - -Interest expense 24 (386 706) (274 918) (14 142) (14 720)Property administration fees (83 056) (67 583) - - Property expenses (628 377) (547 398) - -Service fees - - (9 734) (10 911)Straight line rental expense adjustment - 48 - -

(1 166 172) (953 663) (34 027) (25 631)

Operating income 1 059 169 927 771 1 007 338 855 204

Foreign exchange adjustments 37 176 49 520 34 000 49 520Gain on acquisition of subsidiary and joint ventures 22 - 232 - -Revaluation of swap derivatives 17 (52 380) (90 162) 8 810 2 574 Capital (loss)/profit on disposal of investment propertiesand property, plant and equipment (8 430) 299 (4 091) 99Revaluation of investment properties 7 407 465 1 499 813 - -Revaluation of investment in subsidiaries - - 505 079 1 477 771 Revaluation of investment in listed shares (34 540) 8 250 (34 540) 8 250Profit from joint ventures 121 333 85 288 - -Revaluation of investment in joint ventures - - 26 154 (32 488)Loss on loan write off 6 - - (99 986) -

Profit before taxation 1 529 793 2 481 011 1 442 764 2 360 930

Taxation charged 26 (3 656) (1 008) - -

Profit after taxation 1 526 137 2 480 003 1 442 764 2 360 930

Items that may be reclassified to profit and loss:Other comprehensive income, net of taxation

Foreign exchange adjustments on investment in jointventures (88 018) (117 773) - -

Total comprehensive income 1 438 119 2 362 230 1 442 764 2 360 930

Profit after taxation attributable to:

Owners of the company 1 525 629 2 480 003 Non-controlling interest 508 -

1 526 137 2 480 003

Earnings and diluted earnings per share attributable to

shareholders * 27 61.68 106.86

* Calculated on weighted average number of shares


Non- Non-Share distributable Distributable controlling

capital reserves reserves interest TotalNotes R000 R000 R000 R000 R000

CONSOLIDATEDShareholders' equity at 1 January 2016 7 998 053 1 527 458 455 404 - 9 980 915Total comprehensive income for the year - - 2 362 230 - 2 362 230 Profit after taxation - - 2 480 003 - 2 480 003 Foreign exchange adjustments on investment in joint ventures - - (117 773) - (117 773)Buy back of 1 670 557 treasury shares 15 (7 098) - - - (7 098)130 178 272 shares issued 15 658 103 - - - 658 103Antecedent distribution 15 17 624 - - - 17 624Share-based payment reserve 15 - 7 565 - - 7 565 Capital items transferred to non-distributable reserves (17 624) 1 364 145 (1 346 521) - - Foreign exchange profit on capital loan - 49 520 (49 520) - - Gain on acquisition of subsidiary and joint ventures - 232 (232) - - Revaluation of swap derivatives - (90 162) 90 162 - - Capital profit on disposal of investment properties - 299 (299) - - Revaluation of investment properties - 1 499 813 (1 499 813) - - Revaluation of investments in listed shares - 8 250 (8 250) - - Straight line rental adjustment - 13 094 (13 094) - - Depreciation - (2 422) 2 422 - - Non-distributable adjustments on investment in joint ventures - (92 835) 92 835 - - Non-distributable expenses - (21 644) 21 644 - - Antecedent distribution 15 (17 624) - 17 624 - -

8 649 058 2 899 168 1 471 113 - 13 019 339Distributions attributable to shareholders 21 - - (949 330) - (949 330)

Shareholders' equity at 31 December 2016 15 8 649 058 2 899 168 521 783 - 12 070 009Total comprehensive income for the year - - 1 437 611 508 1 438 119 Profit after taxation - - 1 525 629 508 1 526 137 Foreign exchange adjustments on investment in joint ventures - - (88 018) - (88 018)Buy back of 1 799 712 treasury shares 15 (10 071) - - - (10 071)113 207 547 shares issued 15 568 569 - - - 568 569Antecedent distribution 15 26 029 - - - 26 029Share-based payment reserve 15 4 473 (133) - - 4 340Capital items transferred to non-distributable reserves (26 029) 326 934 (300 905) - - Foreign exchange profit on capital loan - 37 176 (37 176) - - Revaluation of swap derivatives - (52 380) 52 380 - - Capital loss on disposal of investment properties - (8 430) 8 430 - - Revaluation of investment properties - 407 465 (407 465) - - Revaluation of investments in listed shares - (34 540) 34 540 - - Straight line rental adjustment - 31 387 (31 387) - - Dividends from listed shares not yet declared - (7 645) 7 645 - - Depreciation - (4 126) 4 126 - - Non-distributable adjustments on investment in joint ventures - (20 180) 20 180 - - Non-distributable expenses - (21 793) 21 793 - - Antecedent distribution 15 (26 029) - 26 029 - -

9 212 029 3 225 969 1 658 489 508 14 096 995Distributions attributable to shareholders 21 - - (1 088 134) - (1 088 134)

Shareholders' equity at 31 December 2017 15 9 212 029 3 225 969 570 355 508 13 008 861

STATEMENTS OF CHANGES IN EQUITYfor the year ended 31 December 2017


STATEMENTS OF CHANGES IN EQUITYfor the year ended 31 December 2017 ›› (continued)

Non- Share distributable Distributable

capital reserves reserves TotalNotes R000 R000 R000 R000

COMPANYShareholders' equity at 1 January 2016 8 017 064 1 884 426 53 846 9 955 336Total comprehensive income for the year - - 2 360 930 2 360 930 Profit after taxation - - 2 360 930 2 360 930130 178 272 shares issued 15 658 103 - - 658 103Antecedent distribution 15 17 624 - - 17 624 Capital items transferred to non-distributable reserves (17 624) 1 498 208 (1 480 584) - Foreign exchange loss on capital loan - 49 520 (49 520) - Revaluation of swap derivatives - 2 574 (2 574) - Revaluation of investment in subsidiaries - 1 477 771 (1 477 771) - Revaluation of investment in listed shares - 8 250 (8 250) - Revaluation of investment in joint ventures - (32 488) 32 488 - Non-distributable expense - (7 419) 7 419 - Antecedent distribution 15 (17 624) - 17 624 -

8 675 167 3 382 634 934 192 12 991 993Distributions attributable to shareholders 21 - - (949 330) (949 330)

Shareholders' equity at 31 December 2016 15 8 675 167 3 382 634 (15 138) 12 042 663Total comprehensive income for the year - - 1 442 764 1 442 764 Profit after taxation - - 1 442 764 1 442 764113 207 547 shares issued 15 568 569 - - 568 569Antecedent distribution 15 26 029 - - 26 029Capital items transferred to non-distributable reserves (26 029) 532 436 (506 407) - Foreign exchange profit on capital loan - 34 000 (34 000) - Revaluation of swap derivatives - 8 810 (8 810) - Revaluation of investment in subsidiaries - 470 539 (470 539) - Revaluation of investment in joint ventures - 26 154 (26 154) - Capital loss on disposal of investment properties - (4 091) 4 091 - Non-distributable expense - (2 976) 2 976 - Antecedent distribution 15 (26 029) - 26 029 -

9 243 736 3 915 070 921 219 14 080 025Distributions attributable to shareholders 21 (1 088 134) (1 088 134)

Shareholders' equity at 31 December 2017 15 9 243 736 3 915 070 (166 915) 12 991 891



Notes R000 R000 R000 R000Cash flows from operating activitiesProfit after taxation 1 526 137 2 480 003 1 442 764 2 360 930Adjustments for: Interest income 23 (78 263) (48 349) (55 474) (29 254) Interest expense 24 386 706 274 918 14 142 14 720 Allowance for doubtful debt movement 33 6 332 4 951 - 97 Straight line adjustment on rental expense - (48) - - Amortisation of letting commissions and tenant installations 23 655 24 254 - - Taxation charged 26 3 656 1 008 - - Revaluation of investment properties (excluding straight line adjustment) (438 852) (1 512 907) - - Revaluation of investment in subsidiary - - (505 079) (1 477 771) Revaluation of investment in listed shares 34 540 (8 250) 34 540 (8 250) Profit from joint ventures (121 333) (85 288) - - Revaluation of investment in joint ventures - - (26 154) 32 488 Gain on acquisition of subsidiary and joint ventures 22 - (232) - - Depreciation 9 4 126 2 422 - - Revaluation of swap derivatives 17 52 380 90 162 (8 810) (2 574) Loss on loan write off - - 99 986 - Capital loss/(profit) on disposal of investment properties 8 441 (323) 4 091 (99) Capital (profit)/loss on disposal of property plant and equipment (11) 24 - - Share-based payment reserve 4 340 7 565 - - Foreign exchange adjustments on investment in joint venture - - (7 159) - Foreign exchange adjustments on foreign loan (37 176) (49 520) (26 841) (49 520)Operating profit before working capital changes 1 374 678 1 180 390 966 006 840 767 Working capital changes 17 230 (18 702) 3 094 442 (Increase)/decrease in trade and other receivables (7 201) (106 891) 31 (10 410)Increase in inventory (86) (19) - -Increase in trade and other payables 24 517 88 208 3 063 10 852 Cash generated from operations 1 391 908 1 161 688 969 100 841 209 Interest received 78 415 48 240 54 942 29 941Interest paid (440 868) (351 254) (13 010) (26 432)Taxation paid (206) (895) - - Distributions paid 21 (1 088 134) (949 330) (1 088 134) (949 330) Net cash outflow from operating activities (58 885) (91 551) (77 102) (104 612)Cash flows from investing activitiesAcquisition of property, plant and equipment 9 (12 751) (3 269) - -Acquisition of subsidiaries 22 (101 572) (111 730) - -Deferred acquisition of in investment properties 7 - - (4 091) - Increase in investment properties 7 (1 725 060) (1 149 640) - - Decrease/(increase) in investment in subsidiary companies 6 - - 180 142 (387 792)Increase in investment in listed shares 11 (152 000) (44 550) (152 000) (44 550)Proceeds on disposal of investment properties 522 556 304 390 - -Proceeds on disposal of property, plant and equipment 359 36 - -Increase in other financial assets (104 510) (78 461) 1 398 (1 897)Loans to developers 13 (130 965) (250 883) (130 965) (250 883)Investment in joint ventures 33 (14 329) - (14 329) -Increase in letting commissions and tenant installations 7 (17 973) (1 616) - - Net cash outflow from investing activities (1 736 245) (1 335 723) (119 845) (685 122)Cash flows from financing activitiesIssue of new shares (net of expenses) 594 598 600 027 594 598 675 727Loan from developer - (13 020) - - Treasury buy back of shares (10 071) (7 098) - -Loan from non-controlling shareholder 90 191 - - -Repayment of interest bearing borrowings - foreign 16 (18 870) (21 596) - -Repayment of interest bearing borrowings - local 16 (1 152 000) (350 000) (344 142) -Proceeds on interest bearing borrowings - local 16 2 375 356 1 100 000 - -Net cash inflow from financing activities 1 879 204 1 308 313 250 456 675 727Net increase/(decrease) in cash and cash equivalents 84 074 (118 961) 53 509 (114 007)Cash and cash equivalents at the beginning of the year 14 191 380 310 341 162 718 276 725Cash and cash equivalents at the end of the year 14 275 454 191 380 216 227 162 718

STATEMENTS OF CASH FLOWSfor the year ended 31 December 2017


1. General informationSA Corporate Real Estate Limited (“the Company”), established in the Republic of South Africa, is a Real EstateInvestment Trust (“REIT”). The Company is listed on the JSE.

2. Adoption of new and revised International Financial Reporting StandardsIn the current year the Group and the Company have adopted all of the revised Standards and Interpretationsissued by the International Accounting Standards Board (“the IASB”) and the IFRS Interpretations Committee(“IFRIC”) of the IASB that are relevant to its operations and effective for accounting periods beginning on or before1 January 2017. The adoption of these standards and interpretations has not resulted in any adjustment to theamounts previously reported in the Annual Financial Statements for the year ended 31 December 2016.

3. Basis of preparationThe annual financial statements have been prepared in accordance with the Companies Act of South Africa,International Financial Reporting Standards, the SAICA Financial Reporting Guides as issued by the AccountingPractices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council. Theaccounting policies used in the preparation of the financial statements are consistent with those applied in the prioryear. The financial statements have been prepared on the going concern and historical cost basis, modified by therevaluation of certain financial instruments and investment property to fair value measurement.

The financial statements are presented in South African Rand (ZAR). Foreign currency exchange rates used in thepreparation of converting into ZAR are:Spot Closing US Dollar: R12.3632 (2016: R13.7401)Average US Dollar: R13.3139 (2016: R14.7073)

Accounting policies, which are useful to users, especially where particular accounting policies are based on judgementregarding choices within International Financial Reporting Standards have been disclosed. Accounting policies forwhich no choice is permitted in terms of International Financial Reporting Standards have been included only ifmanagement concluded that the disclosure would assist users in understanding the financial statements as a whole,taking into account the materiality of the item being discussed. Accounting policies which are not applicable fromtime to time, have been removed, but will be included if the type of transaction occurs in future.

3.1 Basis of consolidationThe Group consolidated financial statements incorporate the financial statements of the Company and its Subsidiaries.Consolidation of the subsidiary begins when the Company obtains control over the subsidiary and ceases on lossthereof. Judgement is applied by management in determining whether or not control over an investee is achieved.The Company is the major and/or sole owner of all its subsidiaries and consequentially has power to direct thesubsidiaries' performance which gives rise to the dividend income the Company receives from the subsidiaries.

Profit or loss and each component of other comprehensive income are attributed to the owners of the Companyand to the non-controlling interests, even if it results in the non-controlling interests having a deficit balance.

All intragroup transactions and balances between members of the Group are eliminated in full upon consolidation.

3.2 Business combinationsThe acquisition of a business is accounted for by using the acquisition method. The consideration transferred inacquiring the business is measured at fair value, which is calculated as the sum of the acquisition-date fair valuesof the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree andthe equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs arerecognised in profit or loss as incurred, but are not included in determining the distributable income.

NOTES TO THE ANNUAL FINANCIAL STATEMENTSfor the year ended 31 December 2017


3.2 Business combinations ›› (continued)At acquisition date the identifiable assets acquired and liabilities assumed are recognised at fair value. This mayresult in a goodwill or gain on bargain purchase, to which further details have been disclosed in the goodwillaccounting policy below.

Non-controlling interest is measured at fair value and represents the non-controlling interest in the acquiree'sidentifiable net assets.

Contingent considerations, including but not limited to performance based purchase price adjustments, are measuredat their acquisition-date at fair value and are included as part of the consideration transferred in a businesscombination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustmentsare adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustmentsare those that arise from additional information obtained within a year from acquisition date about facts andcircumstances that existed at the acquisition date.

When necessary, adjustments are made to the financial statements of the subsidiaries to bring their accountingpolicies into line with the Group's accounting policies.

3.3 Investment in subsidiariesInvestments in subsidiaries are revalued to fair value at each reporting date. Surpluses or deficits on revaluationor disposal are reflected in profit or loss and are excluded in determining the distributable income of the Company.As the subsidiaries distribute all their distributable income, the surplus and deficit is as a result of the non-distributableincome, and the distributable income declared in the following year relating to the period July to December.

NOTES TO THE ANNUAL FINANCIAL STATEMENTSfor the year ended 31 December 2017 ›› (continued)

3 The Terrace, Westville, KwaZulu Natal


3.4 Investment in joint venturesThe Group has multiple joint arrangements, including investments in joint ventures and joint operations. In thejoint venture arrangements the owners provide unanimous consent and in the joint operation arrangements theowners provide consent in proportion to their ownership, in the decision making which drives the profitability ofthe arrangements. In the joint operation, the owners have a direct right to the asset and obligation in respect ofthe liability, namely the investment property and shareholders loan. By contrast, in the joint venture, the ownershave a right to the net assets of the business, which is generally indicated when the owners have a joint shareholdingin a property holding company.

3.4.1 Joint ventures:The Group accounts for the investments in joint ventures using the equity method. The joint venture is initiallyrecognised at cost and adjusted thereafter to recognise the Group's share of the profit or loss and other comprehensiveincome of the joint venture. The Group reflects the joint venture at fair value at each reporting period as theunderlying joint venture measures its assets and liabilities at fair value. Upon acquisition there may be a gain onbargain purchase or goodwill which is subject to impairment testing. Refer to the goodwill policy for further detail.

The Company revalues the investments in joint ventures to fair value at the end of each reporting date. Surplusesor deficits on revaluation are reflected in profit or loss, but are not included in determining distributable income.

3.4.2 Interests in joint operations:Jointly controlled operations are accounted for by including the Group's and Company's share of the jointly controlledassets, liabilities, revenues and expenses on a line-by-line basis in the financial statements from the date that jointcontrol commences until the date that joint control ceases. The Group and Company account for these assets,liabilities, revenues and expenses relating to its interest in a joint operation in accordance with the applicable IFRS.

3.5 Investment propertiesInvestment properties are properties held to earn rentals, held for redevelopment and appreciation in capital value(including property under construction for such purposes). The majority of the buildings are located on land ownedby the Group, but there are certain buildings situated on long-term operating leases.

Investment properties are initially recognised at the purchase cost, including transaction costs on acquisition, andare revalued to their fair value at the end of each reporting date. Gains or losses arising from changes in the fairvalues are reflected in profit or loss and are excluded in determining the distributable income. Investment propertiesare derecognised upon disposal or when the investment properties are permanently withdrawn from use and nofuture economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the properties(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is includedin profit or loss in the period in which the properties are derecognised.

Properties purchased by the Group and settled by the issuing of shares are recorded at the fair value of the propertiesacquired. This excludes purchases of properties which are regarded as business combinations as described in note3.2.

Investment properties leased out under operating leases are reflected as investment properties on the statementof financial position. Where there are fixed increments in rental, the income is recognised on a straight line basisin accordance with IAS 17: Leases. The resulting difference arising from the straight-line basis and contractual cashflows is recognised as an operating lease obligation or asset.

Deferred expenses comprise tenant installation costs and letting commissions which are amortised on a straightline basis over the lease period to which they relate. The tenant installations and letting commissions are separatelydisclosed in the Investment Property note. As at date of disposal, the unamortised deferred expense is includedin the capital profit or loss of the property.


3.5 Investment properties ›› (continued)Borrowing costs:Where the Group undertakes a major development or refurbishment of its investment property, interest is capitalisedto the cost of the property concerned during the construction period.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

3.6 Intangible assetsIntangible assets acquired in a business combination and recognised separately from goodwill are initially recognisedat their fair value at the acquisition date, which is regarded as their cost. The identification and initial measurementprocess are performed as part of the purchase price allocation. The Group has no internally generated intangibleassets.

Subsequent to initial recognition, intangible assets acquired separately or in a business combination are reportedat cost and accumulated impairment losses.

3.7 Property, plant and equipmentProperty, plant and equipment is initially measured at cost, including any directly attributable transaction costs.

Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses. Property,plant and equipment are depreciated on the straight line basis over their expected useful lives to their estimatedresidual value and depreciation ceases when the residual value exceeds the carrying value. The residual value,useful life and depreciation method of each asset are reviewed at the end of each reporting period. Managementassesses the asset for impairment at each reporting date or when impairment occurs.

The gain or loss arising from derecognition of an item of property, plant and equipment is included in profit or losswhen the item is derecognised.

The useful lives of items of property, plant and equipment have been assessed as follows:

Item Average useful lifeLeasehold property 4 yearsPlant and machinery 6 yearsFurniture and fixtures 6 yearsMotor vehicles 5 yearsOffice equipment 3 yearsIT equipment 3 yearsComputer software 3 years

3.8 GoodwillGoodwill is initially measured at cost, being the excess of the purchase price over the Group's share of the netacquired identifiable assets, measured at fair value, at the date of acquisition.

If the fair value of the net identifiable assets, at fair value, exceeds the purchase price, the excess is immediatelyrecognised in the statement of comprehensive income as a gain on bargain purchase.

If the initial accounting for business combinations has been determined provisionally, then adjustments to thesevalues resulting from the emergence of new information within 12 months after the acquisition date are madeagainst goodwill. In addition, goodwill is adjusted for changes in the estimated value of contingent considerationsgiven in the business combination when they arise.

Goodwill is reflected at cost less any accumulated impairment losses. Goodwill is not amortised and is tested forimpairment at each reporting date. Impairment is determined by assessing the recoverable amount, which is thehigher of fair value less costs to sell and value in use, of the cash-generating unit to which the goodwill relates.The impairment loss is applied firstly to the carrying amount of goodwill, thereafter any remaining impairment isallocated to the other assets of the acquired business. Impairment losses on goodwill are not reversed.



3.9 Assets held for saleInvestment properties which have been earmarked as held for sale and comply with the IFRS 5: Non-current AssetsHeld for Sale and Discontinued Operations recognition criteria are measured in accordance with IAS 40: Investmentproperty at fair value. These properties are disclosed as non-current assets held for sale on the statement of financialposition in accordance with IFRS 5: Non-current Assets Held for Sale and Discontinued Operations. Gains and lossesarising upon re-measurement are recognised in the statement of comprehensive income.

3.10 TaxationDue to the Company's REIT status, the taxation liability is limited to the extent that the distributable income isdistributed by the Company to its shareholders, as set out in the Income Tax Act of 1962 section 25BB. TheCompany's capital profit is also exempt from capital gains taxation. To the extent that the subsidiary companiescomply with the definition, the above exemption will apply.

The income tax expense comprises the sum of current taxation payable and deferred taxation. Taxable profit differsfrom accounting profit as it excludes income or expenses that are taxable or deductible in other years and it excludesitems never deductible or taxable.



Stuttafords House, 60 Pritchard Street, Johannesburg, Gauteng

3.10 Taxation ›› (continued)Deferred taxation is provided for using the liability method based on temporary differences. Temporary differencesare differences between the carrying amounts of assets and liabilities for financial reporting purposes and theirtaxation bases. Deferred taxation is charged to profit or loss. A deferred taxation asset is recognised to the extentthat it is probable that it will be utilised on future taxable profits. Deferred taxation is raised at tax rates that havebeen enacted or substantively enacted at the reporting date.

3.11 ImpairmentThe carrying amount of the Group's and Company's assets is reviewed at each reporting date to determine whetherthere is any indication of impairment. An impairment loss is recognised in profit or loss whenever the carryingamount of an asset exceeds its recoverable amount, which is the higher of an asset's net selling price and valuein use. In assessing value in use, the estimated future cash flows are discounted to their present value using adiscount rate that reflects current market assessments of the time value of money and the risks specific to theasset. Whenever an impairment loss is subsequently reversed, the carrying amount of the asset is increased tothe extent that the increased carrying amount does not exceed the original carrying amount. A reversal of animpairment loss is recognised immediately in profit or loss.

3.12 Fair value measurementWhere another IFRS requires or the Group and Company has chosen fair value measurement for assets or liabilities,the Group and Company has applied the principles of IFRS 13: Fair Value Measurement to determine the fair valueto be used. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date. The fair value of quoted instruments is determinedwith reference to closing market prices on the date of measurement. Where there is no active market, fair valueis determined using applicable valuation techniques. Valuation techniques include discounted cash flow models,pricing models and recent arm's-length transactions for similar instruments.

3.13 Financial instrumentsA financial asset or financial liability is recognised for as long as the Group or Company is party to the contractualprovisions of the instrument.

3.13.1 Non-derivative financial instrumentsNon-derivative financial instruments recognised on the statement of financial position include cash and cashequivalents, trade and other receivables, investments in joint ventures, investment in subsidiaries, sharecapital, reserves, interest-bearing borrowings, trade and other payables and loans.

a. Financial assets

i. Initial recognitionFinancial assets are classified into the following specified categories: 'at FVTPL' and 'loans and receivables'.The classification depends on the nature and purpose of the financial assets and is determined at thetime of initial recognition.

Financial assets which are instruments not at fair value through profit or loss (“FVTPL”) are initiallymeasured at fair value plus any directly attributable transaction costs. Items classified at FVTPLrecognise the transaction costs immediately through profit or loss. Subsequent to initial recognition,non-derivative financial instruments are measured as described below.

ii. Financial assets at FVTPLA financial asset is classified as at FVTPL if it is held for trading or is designated as such upon initialrecognition.

Financial assets at FVTPL are measured at fair value, and changes therein are recognised in profit orloss.

Investments in listed shares, subsidiary companies and joint ventures have been designated as atFVTPL.



3.13.1 Non-derivative financial instruments ›› (continued)a. Financial assets ›› (continued)

iii. Loans and receivablesLoans and receivables are measured at amortised cost using the effective interest method, less anyimpairment. This includes trade, other receivables and loans.

iv. Derecognition of financial assetsThe Group and Company derecognises a financial asset only when the contractual rights to the cashflows from the asset expire or it transfers the financial asset and substantially all the risks and rewardsof ownership of the asset to another entity.

v. Impairment of financial assetsFinancial assets are assessed at the end of each reporting date to determine whether there is anyobjective evidence that they are impaired. A financial asset is considered to be impaired if objectiveevidence indicates that one or more events have had a negative effect on the estimated future cashflows of that asset.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as thedifference between its carrying amount and the present value of the estimated future cash flowsdiscounted at the original effective interest rate. Individually significant financial assets are tested forimpairment on an individual basis. The remaining financial assets are assessed collectively in groupsthat share similar credit risk characteristics. All impairment losses are recognised in profit or loss.

An impairment loss is reversed if the reversal can be related objectively to an event occurring afterthe impairment loss was recognised. For financial assets measured at amortised cost, the impairmentand reversal are recognised in profit or loss.

b. Financial liabilities

Financial liabilities are classified as other financial liabilities.

i. Other financial liabilitiesOther financial liabilities, including borrowings, loans, trade and other payables, are initially measuredat fair value, net of transaction costs.

Other financial liabilities are subsequently measured at amortised cost using the effective interestmethod, with interest expense recognised on an effective yield basis over the relevant period.

The effective interest rate is the rate that exactly discounts estimated future cash payments throughthe expected life of the financial liability, or, where appropriate, a shorter period.

ii. Derecognition of financial liabilitiesThe Group and Company derecognises financial liabilities when, and only when, the Group's andCompany's obligations are discharged, cancelled or they expire.

c. Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Group afterdeducting all of its liabilities.

3.13.2 Derivative financial instrumentsThe Group and Company use derivative financial instruments to manage their exposure to interest rateand foreign exchange risk exposures, through interest rate and cross currency swaps.

Derivative financial instruments not designated as cash flow hedging instruments are accounted for asfinancial instruments at FVTPL.



3.13.2 Derivative financial instruments ›› (continued)The fair value of the interest rate and cross currency swaps is the estimated amount that the Group andCompany would receive or pay to terminate the swap at the reporting date, taking into account currentinterest rates and foreign exchange rates and the current creditworthiness of the swap counterparties.

3.14 Revenue recognitionRevenue comprises Group gross rental income, including all recoveries from tenants, together with Company interestand dividend income. Variable operating cost recoveries are recognised on the accrual basis. Rental income andfixed operating costs recoveries are recognised on the straight line basis in accordance with IAS 17: Leases. Turnoverrental income is recognised on the accrual basis and measured at fair value.

Interest income is recognised at the effective rates of interest on a time related basis. Dividends are recognisedupon declaration.

3.15 DistributionsThe Group distributes all of its distributable income to the shareholders. Prior to the REIT conversion, the distributableincome generated in the year was recognised as a liability. Effective from the date of the REIT conversion on 1July 2015, the dividends payable were recognised as liabilities in the period in which the dividends are declared.

3.16 Segmental reportingInformation reported to the Group's chief operating decision makers, being the executive directors, for the purposesof resource allocation and assessment of its performance, is based on the economic sectors in which the investmentproperties operate.

On a primary basis, the Group operates in the following reportable segments:� Retail� Industrial� Commercial� Storage� AFHCO� Corporate

3.17 Share capital and reservesShare capital and reserves represent the residual interest in the Group's and Company's assets after deductingall of its liabilities and have been accounted for as equity.

Shares issued by the Group and Company are recognised at the proceeds received, net of direct issue cost. Sharesrepurchased by the Group and Company are recognised and deducted directly in equity. No gain or loss is recognisedin profit or loss on the purchase, sale, issue or cancellation of the Company's own shares.

3.18 Foreign currenciesIn preparing the financial statements of each individual entity, transactions in currencies other than Rand arerecognised at the rate of exchange prevailing at the dates of the transactions. Non-monetary items that aremeasured in terms of the historical cost in a foreign currency are not retranslated.

Exchange differences on monetary items are recognised in profit or loss in the period in which they arise.

For the purposes of presenting these consolidated financial statements, the assets and liabilities of the Group'sforeign operations are translated into Rand using exchange rates prevailing at the end of each reporting period.Income and expense items are translated at the average exchange rates for the period.

Exchange differences arising from foreign joint ventures are recognised in other comprehensive income andaccumulated in equity.



3.19 Share-based paymentThe Company's subsidiary issues shares to selected employees as part of its forfeitable share plan or/and co-investment share plan. The forfeitable share plan vests in three years after grant date and is subject to the Group'sand the individual employee's performance. The co-investment plan vests in three to five years. Both plans aresubject to the employee's retention.

These plans are recognised and measured as: � an equity-settled plan on Group level; and � a cash-settled plan on the subsidiary level.

Equity-settled payments to employees are measured at the fair value of the equity instruments, at the grant date.The fair value determined on grant date is expensed over the vesting period. The number of the vested shares isrevised at each reporting date. All required adjustments are recognised in profit of loss.

Cash-settled payments to employees, recognised as a liability, are initially measured at the fair value of the liability.At the end of each reporting date the liability is re-measured at fair value, where the fair value adjustments arerecognised in the profit or loss for the year.

4. Critical accounting estimates and judgementsEstimates and judgements are continually evaluated and are based on historical experience as adjusted for currentmarket conditions and other factors.

The Group and Company makes estimates and assumptions concerning the future. The resulting accounting estimateswill, by definition, seldom equal the related actual results. The estimates or assumptions that have a significantrisk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial yearare discussed below.

4.1 Significant estimates and judgements include:

Estimate of the fair value of investment propertiesThe best evidence of fair value is current prices in an active market for similar leases and other contracts. Inthe absence of such information, the Group determines the amount within a range of reasonable fair valueestimates. In making its judgement the Group considers information from a variety of sources including:� Current prices in an active market for properties of different nature, condition or location (or subject to different lease or other contracts), adjusted to reflect those differences;� Recent prices of similar properties in less active markets, with adjustments to reflect any changes in economic conditions since the date of the transactions that occurred at those prices;� Discounted cash flow projections based on reliable estimates of future cash flows, derived from the terms

of any existing leases and other contracts and (where possible) from external evidence such as current market rents for similar properties in the same location and condition, and using discount rates that reflect

current market assessments of the uncertainty in the amount and timing of the cash flows; and� The fair value of the inner-city retail, residential and commercial investment properties was based on the

capitalisation of the net income earnings in perpetuity. The discounted cash flow method is not appropriatein these portfolios due to the short term nature of the portfolio's leases.

Principal assumptions of the Directors estimation of fair valueIf information on current or recent prices is not available, the fair values of investment properties are determinedusing discounted cash flow valuation techniques. The Group used assumptions that are mainly based on marketconditions existing at each reporting date.

The principal assumptions underlying management's estimation of fair value are those related to:� The receipt of contracted rentals, expected future market rentals, lease renewals, maintenance requirements and appropriate discount and capitalisation rates.� These valuations are regularly compared to actual market yield data, actual transactions by the Group and those reported by the market.





4. Critical accounting estimates and judgements ›› (continued)

Estimate of the fair value of investment properties ›› (continued)Principal assumptions of the Directors estimation of fair value ›› (continued)The expected future market rentals are determined with reference to current market rentals for similarproperties in the same location and condition.

4.2 Other estimates and judgements include:

(a) Doubtful debt provisionIn the industrial, retail, commercial storage sectors, all legal arrears that have been summonsed, as well astenants with arrears older than 90 days, have been provided against. Exceptions are applied based on anassessment of the individual debtor. Management applies judgement based on the following:� The historical recoverability of the debt;� The financial viability of the debtor; and� Whether there are any disputes pending with the debtor.

In the residential and other sectors management has provided based on the assessment of the individualdebtor.

(b) Intangible assetThe brand's fair value was determined using the Relief from Royalty method. The brand was valued using adiscount rate equal to the weighted average cost of capital and assumed an indefinite useful life. The indefiniteuseful life was used due to the relative strength, market recognition and the time in existence of the brand.The brand will be assessed for impairment at the end of each reporting period.

Impairment is tested based on a discounted cash flow method over an indefinite period, using the Group'sweighted average cost of capital as the discount rate and an assumed increase in net income based on theyield as at acquisition. The period over which projected cash flows were forecast was 3 years.

(c) Swap derivativesThe swap derivatives fair value is determined at the end of each reporting period through a discounted cashflow of the net interest payable or receivable over the instrument's remaining life. The net interest is determinedas the difference between the fixed agreed upon price and the variable rate. The variable rate is subject tomarket conditions. The credit risk of the instrument is used to determine the discount rate.

(d) Impairment of goodwillDetermining whether goodwill is impaired requires an estimation of the value in use of the cash-generatingunits to which goodwill has been allocated. The value in use calculation requires the Directors to estimate thefuture cash flows expected to arise from the cash-generating unit and a suitable discount rate in order tocalculate the present value. Where the actual future cash flows are less than expected, a material loss mayarise.

(e) Identification of business combinations and investment property acquisition:Upon acquisition of a property through the acquisition of shares or the direct underlying property, managementshall assess whether the acquisition is in terms of IAS 40: Investment Property or IFRS 3 Business Combinations.In the event that there are no adequate processes identified within these properties to warrant classificationas a business, the acquisition of properties shall be recognised under IAS 40. Processes specifically includethe leasing structures that are acquired as part of the business combination.

5. New accounting standards and IFRIC interpretations5.1 New standards and interpretations in issue, but not yet effective:

Certain new accounting standards and IFRIC interpretations have been published that are applicable for futureaccounting periods. These new standards and interpretations have not been early adopted by the Group andCompany. The directors do not expect that the adoption of the standards and interpretations will have a materialimpact on future financial statements.

5. New accounting standards and IFRIC interpretations ›› (continued)

5.1 New standards and interpretations in issue, but not yet effective: ›› (continued)

The amended and new standards and interpretations in issue, but not yet effective, that are relevant to the Groupand Company are:

IFRS 2: Share-based Payment (effective 1 January 2018);The amendments clarify:i) the accounting for cash-settled share-based payment transactions that include a performance condition to follow the same approach as for equity-settled share-based payments;ii) the classification of share-based payment transactions with net settlement features, where such an arrangement should be classified as equity-settled in its entirety, provided that the share-based payment

would have been classified as equity-settled had it not included the net settlement feature; andiii) the accounting for modifications of share-based payment transactions from cash-settled to equity-settled.

The directors anticipate that the application of these amendments will not have an impact on the Group'sconsolidated financial statements in future periods. This is because the measurement of the liability arising fromcash-settled share based payments is adjusted by the best available estimate of the number of awards that areexpected to vest on a monthly basis. Share-based payment transaction with a net settlement feature are notclassified as equity-settled because these would not be classed as such had they not included the net settlementfeature. In the instance that the terms of a share-based payment transaction are modified, the amendmentwill be applied.

IFRS 9: Financial Instruments (2014) (effective 1 January 2018);IFRS 9 (2014) was issued as a complete standard including the requirements previously issued and additionalamendments to introduce a new expected loss impairment model and limited changes to the classification andmeasurement requirements for financial assets. This standard replaces the reclassification and measurementsmodels in IAS 39 with a single model that has only two classification categories: amortised cost or fair value.

The group has assessed the impact on the application of IFRS 9 as follows:Classification and measurementi) Loans are classified and measured at amortised costs, these are held within the business model whose objective is to collect the contractual cash flows that are solely payments of principal and interest on the

principal outstanding. Accordingly these financial assets will continue to be subsequently measured at amortised cost upon application of IFRS 9.ii) Investments in subsidiary companies and joint ventures have been designated as at FVTPL, under IFRS 9 however, an entity may make an irrevocable election on initial recognition to present the fair value gains

and losses accumulate on these equity investments in the other comprehensive income. The directors anticipate that classification of these equity investment will be presented in profit or loss.

All other financial assets and financial liabilities will continue to be measured on the same bases as currentlyadopted under IAS 39.

ImpairmentThe directors anticipate that the application of the expected credit loss model of IFRS 9 will result in the earlierrecognition of credit losses for trade receivables, and will increase the amount of loss allowances recognisedfor these items.







IFRS 15: Revenue from contracts with customers (effective 1 January 2018);The objective of IFRS 15 is to establish the principles that an entity should apply to report useful informationto users of the financial statements about the nature, amount, timing and uncertainty of revenue and cash flowsfrom a contract with a customer. The standard introduces a 5 step approach on revenue recognition, where anentity only recognises revenue when (or as) a performance obligation is satisfied.

The Group recognises revenue from the following major sources:i) Rental and recovery incomeii) Interestiii) Dividend incomeiv) Other income (management fee, structuring fee, property management fee and put option)

The directors have preliminary assessed the following:- the rental and recovery income falls outside of the scope of IFRS 15, as this is included in IAS 17: Leases scope;- the interest, dividend income and other income (put) option falls outside of the scope of IFRS 15, as this is included in the IAS 39: Financial Instruments: Recognition; and- the other income (management fee, structuring fee, property management fee) will be recognised for

each of these performance obligations when control over the corresponding services is transferred tothe customer. This is similar to the current identification of revenue components under IAS 18: Revenue.

Apart from providing more extensive disclosures on the Group's revenue transaction, the directors do notanticipate that the application of IFRS 15 will have significant impact on the financial position of the Group andCompany.

IFRS 16: Leases (effective 1 January 2019);IFRS 16 provides a comprehensive model for the identification of lease arrangements and their treatment inthe financial statements of both leases and lessors. The standard distinguishes leases and service contracts onthe basis of whether an identified assets is controlled by a customer. Distinctions of operating leases and financeleases are removed for lessee accounting, and is replaced by a model where a right-of-use of the asset and acorresponding liability have to recognised for all leases by lessees, except for short-term leases and leases oflow value assets.

The directors do not anticipate that the application of the amendment in the future will have a significant impacton the consolidated financial statements as the leasehold properties are recognised as investment propertiesmeasured at fair value under IAS 40: Investment Property other than the ability to provide information to tenantsfor their IFRS 16 compliance.

IAS 28: Investments in Associates and Joint Ventures (effective 1 January 2018);The amendments to IAS 28 clarify that the option for a venture capital organisation and other similar entitiesto measure investments in associates and joint ventures at FVTPL is available separately for each associate orjoint venture, and the election should be made at initial recognition of the associate or joint venture.

The directors do not anticipate that the application of the amendments in the future will have any impact onthe separate and consolidated financial statements as the Company is not a venture capital organisation.





IAS 40: Investment Property (effective 1 January 2018);The amendments clarify that a transfer to, or from investment property necessitates an assessment of whethera property meets, or has ceased to meet, the definition of investment property, supported by observable evidencethat a change in use has occurred. A change in management’s intention for use of the property by itself doesnot constitute evidence of a change in use.

The directors do anticipate that the application of these amendments may have no impact on the separate andconsolidated financial statements in future periods should there be a change in use of any of its properties. Thisis because the Company already considers observable evidence when a change in use occurs, in a way that isconsistent with the amendment.

IFRIC 22 Foreign Currency Transactions and Advance Consideration (effective 1 January 2018).IFRIC 22 addresses how to determine the date of the transaction for the purposes of determining the exchangerate to use on initial recognition of an asset, expense or income when consideration of the item has been paidor received in advance in a foreign currency which resulted in the recognition of a non-monetary asset or liability.

The directors do not anticipate that the application of the amendments in the future period will have a significantimpact on the Group's consolidated financial statements. This is because the Group already accounts for thetransactions relating to payments or receipts in advance consideration in foreign currency in a way that isconsistent with the amendments.

5.2 New standards and interpretations adopted in the current year:The Group and Company adopted the following revised accounting standards in the current year:

IAS 7: Cash Flow Statement (effective 1 January 2017);The amendments require an entity to provide disclosures that enable users of financial statements to evaluatechanges in liabilities arising from financing activities including both cash and non-cash changes.

The liabilities arising from financing activities consists of borrowings and certain other financial liabilities. Areconciliation between the opening and closing balances of these items is provided in note 16. Apart from theadditional disclosures in (note 16), the application of these amendments has had no impact on the separateand consolidated annual financial statements.

IAS 12: Income Taxes (effective 1 January 2017);The amendments clarify how an entity should evaluate whether there will be sufficient future taxable profitsagainst which it can utilise a deductible temporary difference.

The application of these amendments has had no impact on the separate and consolidated financial statementsas the Group and Company already assessed the sufficiency of future taxable profits in a way that us consistentwith these amendments.

IFRS 12: Disclosure of Interests in Other Entities (effective 1 January 2017);IFRS 12 states that an entity need not provide summarised financial information for interest in subsidiaries,associates or joint ventures that are classified (or included in a disposal group that is classified) as held for sale.The amendments clarify that this is in the only concession from the disclosure requirements of IFRS 12 for suchinterest.

The application of these amendments has had no impact on the separate and consolidated financial statementsas none of the interest in these entities is classified or included in a disposal group that is classified, as heldfor sale.

The adoption of these new and revised accounting standards has not resulted in any restatement of informationpreviously presented.

Tygerberg Business Park, Trans Karoo Street, Parow Industria, Western Cape

Company Company Company2017 2016 2017 2016 2017 2016R000 R000 R000 R000 R000 R000

Current loans Non-current loans Investment

Subsidiary companies AFHCO Holdings Proprietary Limited (115 500) (48 151) 3 221 825 2 029 572 626 873 578 930 Blue Heron Proprietary Limited (6 502) (10 325) 11 045 9 743 51 287 54 414 Dune Lark Investments Proprietary Limited (3 446) (3 075) 8 937 8 479 40 314 26 857 Erf 84-85-86 Shakas Head Proprietary Limited (850) (2 121) 20 809 19 355 23 443 20 814 Grey Heron Investments Proprietary Limited (3 159) (5 056) 5 375 5 375 25 477 25 381 Jrad Investments Proprietary Limited 80 (989) - 2 053 - - Madison Park Properties 24 Proprietary Limited - 5 - - - - Rock Kestrel Investments Proprietary Limited (1 430) (1 236) 2 038 1 809 14 653 7 210 SA Corporate Real Estate Fund Managers Proprietary Limited 43 234 19 984 - - - 541 SA Retail Properties Proprietary Limited (1 311 052) (547 058) (619 706) (27 237) 8 782 304 8 514 139 Stondell Investments Proprietary Limited (367) 121 1 852 1 852 7 700 7 018 Umlazi Mega City Proprietary Limited 60 618 50 557 142 015 135 296 136 213 139 644 Whirlprops 25 Proprietary Limited - - 38 100 38 100 73 756 16 281 Wood Ibis Investments Proprietary Limited (4 868) (4 250) 11 042 10 703 64 984 47 408 (1 343 242) (551 594) 2 843 332 2 235 100 9 847 004 9 438 637

Non-current intercompany asset - - 3 463 038 2 262 337 9 847 004 9 438 637Non-current intercompany liability - - (619 706) (27 237) - -Current intercompany asset 103 932 70 667 - - - -Current intercompany liability (1 447 174) (622 261) - - - -

(1 343 242) (551 594) 2 843 332 2 235 100 9 847 004 9 438 637

The intercompany loans are unsecured and interest free. The non-current loans are viewed as equity contributions to thesubsidiaries and as such are not expected to be redeemed.

The Company has pledged properties owned by certain of its subsidiary companies, to secure loan facilities. Refer to note 16for details of borrowings.

The Company's claims against Madison Park Properties 24 Proprietary Limited and Jrad Investments Proprietary Limited duringthe prior year, and against SA Corporate Real Estate Fund Managers Proprietary Limited and AFHCO Property ManagementProprietary Limited during the current year, were subordinated in favour of creditors to the extent of the deficit on shareholderequity in these companies. The total deficit on the shareholder equity in these companies amounts to R9 749 568 (2016: R97418 222) due to a write off of R99 986 000 as detailed in note 33.

6. Investment in subsidiary companiesThe following property owning subsidiaries, incorporated in South Africa, are directly held and wholly owned by SA CorporateReal Estate Limited:



Consolidated Company2017 2016 2017 2016R000 R000 R000 R000

7. Investment property and lettingcommissions and tenant installationsCarrying value at beginning of year 14 357 675 11 631 267 - - at valuation 11 723 226 9 688 399 - - straight line rental adjustment (219 436) (206 603) - - property under development 2 853 885 2 149 471 - -

Acquisitions and improvements through business combination 178 207 271 733 - - at valuation 178 207 271 809 - - straight line rental adjustment - (76) - - Acquisitions and improvements 1 725 060 1 149 640 - - at valuation 1 282 505 687 260 - - property under development 385 123 386 490 - -

capitalised interest at valuation # 7 706 428 - - capitalised interest property under development # 49 726 75 462 - -

Disposals (109 497) (117 615) - - at valuation (83 473) (103 866) - - property under development (26 024) (13 749) - -

Fair value adjustment 407 465 1 499 813 - - at valuation 389 405 1 128 244 - - straight line rental adjustment (31 387) (13 094) - - property under development 49 447 384 663 - -

Net transfer from property under development 151 907 128 452 - - Net transfer to investment property (151 907) (128 452) - -

Transfer of properties classified as held for disposal (846 570) (77 163) - - at valuation * (865 536) (77 500) - - straight line rental adjustment 18 966 337 - -

Carrying value at end of year 15 712 340 14 357 675 - - at valuation 12 783 947 11 723 226 - - straight line rental adjustment (231 857) (219 436) - - property under development 3 160 250 2 853 885 - -

Letting commissions and tenant installations

Carrying value at beginning of year 54 410 75 706 - - Amortisation during the year (22 661) (21 918) - - Additions during the year 17 973 1 616 - - Transfer to property held for disposal * (1 535) (994) - -Carrying value at end of year 48 187 54 410 - -

# As detailed in note 25.* As detailed in note 8.



96,15th Road, Randjespark, Midrand, Gauteng

7. Investment property and letting commissions and tenant installations ›› (continued)

The fair value of the portfolio for the current year was determined by an independent registered valuer, Quadrant PropertiesProprietary Limited. The fair value of the industrial, retail, commercial and storage portfolio of investment properties, excludingproperties subject to unconditional contracted sales, was based on the discounted cash flow method.

The fair value of the inner-city retail, residential and commercial investment properties was based on the capitalisation of thenet income earnings in perpetuity. The discounted cash flow method is not appropriate due to the short term nature of theportfolio's leases.

The valuer has appropriate qualifications and experience in the valuation of properties in the relevant locations.

The fair value was approved on 23 February 2018 by the Board of Directors.

The independent valuers applied current market related assumptions to the risks in rental streams of properties. Discount ratesin the respective sectors ranged as follows:

2017 2016

Discount Capitalisation Discount Capitalisationrates (%) rates (%) rates (%) rates (%)

Industrial 14.25 - 17.00 8.25 - 11.00 14.25 - 17.75 8.25 - 11.75Retail 13.75 - 17.75 7.75 - 11.50 13.75 - 17.50 7.75 - 11.50Commercial 14.75 - 16.50 8.75 - 10.50 14.50 - 16.50 8.50 - 10.50Storage 17.00 11.00 - -AFHCO N/A 10.00 - 11.25 N/A 10.00 - 11.00

Certain properties are subject to mortgage bonds in favour of lenders as detailed in note 16.

The table below analyses the investment properties that are measured at fair value, subsequent to initial recognition andprovides information about the fair value hierarchy.



Level 3: Financial assets designated as at FVTPL sensitivity analysisManagement has reviewed the methodology and assumptions and are satisfied that the valuations are representative of the

current and projected portfolio performance.

The sensitivity analysis is based on the exposure to the discount rates and growth rates at the reporting date.

A 50 basis points increase or decrease in the discount rate and a 100 basis points increase or decrease in growth rates representsmanagement's reasonable assessment of the possible change in market rates which will have the following impact on theinvestment property value:

Growth rate(1.0%) Current 1.0%

2017 2017 2017R000 R000 R000

Investment in investment properties 2017Discount rate(0.5%) 16 479 024 17 295 365 18 221 520Current 16 059 323 16 832 933 17 762 2950.5% 15 657 046 16 421 750 17 303 781

Growth rate(1.0%) Current 1.0%

2016 2016 2016R000 R000 R000

Investment in investment properties 2016Discount rate(0.5%) 14 693 025 15 450 414 16 331 919Current 14 290 049 15 021 811 15 871 7860.5% 13 903 876 14 611 378 15 431 362

Consideration of business combination or investment property classificationDuring the year, the Group acquired investment properties through business combinations as detailed in note 22. Theseacquisitions are considered to be business combinations as we acquired the assets and liabilities of the buildings, together withthe underlying processes, which results in net property income flow to the Group. The acquisition of shares in a legal entitywere indicative of a business combination, as the Group acquired the associated processes that one would find in a propertybusiness, including lease management, vendor relationships and the statutory requirements to be able to transact as a business.Management does not consider any other acquisition of investment property to be the acquisition of businesses and has classifiedthis as acquisition of investment properties. The buildings were acquired without the relevant underlying business processesand adopted the processes of the Group, including lease management and vendor relationships. The assets acquired andclassified as investment properties adopted the governance structure of the Group.




7. Investment property and lettingcommissions and tenant installations›› (continued)

Level 3 (defined in note 33):

Investment properties: at valuation 12 783 947 11 723 226 - - property under development 3 160 250 2 853 885 - - held for disposal 888 736 444 700 - -

16 832 933 15 021 811 - -


8. Properties classified as held fordisposalReconciliation of properties classified as held for disposalCarrying value at beginning of year 444 700 553 700 - - Transfer from investment properties* 865 536 77 500 - - Disposal (421 500) (186 500) - -Carrying value at end of year 888 736 444 700 - - Straight line rental adjustment (23 645) (4 679) - - Straight line rental adjustment 23 645 4 679 - - Carrying value at end of year 888 736 444 700 - -

Letting commissions and tenant installationsCarrying value at beginning of year 994 2 336 - - Transfer from investment properties * 1 535 994 - - Disposal (994) (2 336) - - Carrying value at end of year 1 535 994 - -

* As detailed in note 7.

The above properties are expected to be transferred by December 2018. The properties that are contracted and unconditionalare valued at their expected proceeds on disposals. The properties that are contracted and conditional are valued at the netdiscounted cash flow amount as detailed in note 7. No impairment losses were recognised as at 31 December 2017 and 2016.The segmental classification of the above properties is disclosed in note 32.



Green Park Corner, Cnr West Road South & Lower Road, Sandton, Gauteng

Reconciliation of property, plant and equipment

AdditionsConsolidated through2017 Opening business Closing R000 Balance combinations Additions Disposals Depreciation Balance

Leasehold property 131 - 7 - (61) 77Plant and machinery 542 - 806 - (204) 1 144Furniture and fixtures 3 867 - 5 681 (326) (1 168) 8 054Motor vehicles 112 10 1 327 - (201) 1 248Office equipment 501 13 120 (22) (183) 429IT equipment 2 159 34 4 691 - (1 750) 5 134Computer software 1 057 - 119 - (559) 617

8 369 57 12 751 (348) (4 126) 16 703

Consolidated2016 Accumulated CarryingR000 Cost depreciation value

Leasehold property 238 (107) 131Plant and machinery 768 (226) 542Furniture and fixtures 4 720 (853) 3 867Motor vehicles 174 (62) 112Office equipment 820 (319) 501IT equipment 4 139 (1 980) 2 159Computer software 1 717 (660) 1 057

12 576 (4 207) 8 369

Reconciliation of property, plant and equipment

AdditionsConsolidated through2016 Opening business Closing R000 Balance combinations Additions Disposals Depreciation balance

Leasehold property 181 - 8 - (58) 131Plant and machinery 550 - 110 - (118) 542Furniture and fixtures 1 914 1 987 597 - (631) 3 867Motor vehicles 14 - 126 - (28) 112Office equipment 404 - 266 (5) (164) 501IT equipment 1 297 46 1 788 (7) (965) 2 159Computer software 1 141 - 374 - (458) 1 057

5 501 2 033 3 269 (12) (2 422) 8 369

9. Property, plant and equipmentConsolidated2017 Accumulated CarryingR000 Cost depreciation value

Leasehold property 245 (168) 77Plant and machinery 1 534 (390) 1 144Furniture and fixtures 9 717 (1 663) 8 054Motor vehicles 1 468 (220) 1 248Office equipment 955 (526) 429IT equipment 8 291 (3 157) 5 134Computer software 1 677 (1 060) 617

23 887 (7 184) 16 703



10. Intangible assets Consolidated2017 Accumulated CarryingR000 Cost impairment value

AFHCO Brand 71 800 - 71 800Goodwill on AFHCO Holdings 10 104 - 10 104

81 904 - 81 904

Additionsthrough

Opening business Closing balance combinations balance

Reconciliation of intangible assetsAFHCO Brand 71 800 - 71 800 Goodwill on AFHCO Holdings 10 104 - 10 104

81 904 - 81 904

Consolidated2016 Accumulated CarryingR000 Cost impairment value

AFHCO Brand 71 800 - 71 800Goodwill on AFHCO Holdings 10 104 - 10 104

81 904 - 81 904

Additionsthrough

Opening business Closing balance combinations balance

Reconciliation of intangible assetsAFHCO Brand 71 800 - 71 800 Goodwill on AFHCO Holdings 5 097 5 007 10 104

76 897 5 007 81 904

Goodwill arose on the acquisition of a subsidiary as detailed in note 22. The carrying value of the AFHCO Brand is R71 800 000and is assessed for impairment at the end of each reporting period as it has an indefinite useful life.

The period in which the Brand will generate net cash inflow is not limited, resulting in the useful life to be indefinite. The Brandis determined to have an indefinite useful life based on the relative strength and market recognition. The Brand has been inexistence for a considerable amount of time.

The fair value of the AFHCO Brand and the goodwill on AFHCO Holdings was determined on a value in use basis. Impairmentis tested based on a discounted cash flow method over an indefinite period, using the Group's weighted average cost of capitalat 10.1% (2016: 8.6%) as the discount rate and an assumed increase in net income based on the yield as at acquisition of9.9% (2016: 9.9%). The period over which projected cash flows were forecast was 3 years. Impairment was not required.




11. Other financial assetsNon-current assetsListed shares 1 170 260 52 800 170 260 52 800 Transcend Residential Property Fund 40 260 52 800 40 260 52 800 Safari Investments RSA Limited 130 000 - 130 000 -Loans receivable 2 611 1 806 499 550 City Kidz Preschool NPC 2 2 611 1 806 499 550

172 871 54 606 170 759 53 350Current assetsCalgro M3 Developments Limited 3 194 196 100 000 - - UHD Property Investments Proprietary Limited 4 11 729 12 090 - 1 347 Electprops Commercial property 5 9 870 - - -

215 795 112 090 - 1 347 388 666 166 696 170 759 54 697

Reconciliation of investment in listed sharesCarrying value at beginning of year 52 800 - 52 800 -Acquisition of investment in shares 152 000 44 550 152 000 44 550Revaluation recognised through profit or loss (34 540) 8 250 (34 540) 8 250Carrying value at end of year 170 260 52 800 170 260 52 800

1 In the prior year, the Group acquired 10% of the ordinary share capital of Transcend Residential Property Fund Limited, aspecialised residential property fund that is listed on the AltX Board of the JSE. During the current year, the Group acquired9% of the ordinary share capital of Safari Investments RSA Limited, a property investment company listed on the JSE as a RealEstate Investment Trust (“REIT”) that specialises in quality investments. The directors of the Company do not consider theGroup to have the ability to exercise any significant influence over the Companies.

2 This balance is made up of two loans to City Kidz: - A loan of R 2 112 700 (2016: R1 255 971) which is an unsecured, interest free loan and has no fixed repayment terms. AFHCO Holdings (Pty) Ltd will continue to provide funding and financial support to City Kidz Preschool NPC. The Group does not intend recalling the non-current assets within the next 12 months.- A loan of R 498 873 (2016: R550 271) is an unsecured and amortising loan, repayable by 29 August 2023 at a rate of prime less 0.5%.

3 The balance relates to an advance payment paid to the developer in respect of the construction of units to be acquired by theGroup during 2018.

4 Atkinson House and Platinum Place are properties that were held by the AFHCO Group as at 30 June 2014. Atkinson Housewas transferred to the Group on 1 March 2015 and Platinum Place was transferred on 1 July 2016. Up to the date of transfer,these properties are in the name of the AFHCO Group and have been economically transferred to UHD Property InvestmentsProprietary Limited (“UHD”) as of 1 July 2014. The operations of the business of these two properties, including the funding ofcapital expenditure and the servicing of the loan, have been paid by the AFHCO Group, resulting in an amount receivable fromUHD.

5 During the current year, the Group acquired Electprops 91 Proprietary Limited (“Electprops”). The amount above relates tocommercial investment property in Electprops, which the Group has an option to sell back to the sellers. There is a relatedliability on the balance sheet that represents the liability that needs to be settled, should the Group choose to incorporate thecommercial property into the investment property.




12. Trade and other receivables Trade receivables 91 062 57 378 - - Allowance for doubtful debts (22 509) (22 881) - - Trade receivables net of allowance for doubtful debts * 68 553 34 497 - - Other receivables, accrued income and accrued interest 282 540 315 935 35 749 35 250

351 093 350 432 35 749 35 250 * As detailed in note 33.

13. Loans to developers One Triple L Projects Propertiary Limited 9 275 8 363 9 275 8 363Loan bearing interest at 10.25% (2016: 10.50%) per annum.This loan is repayable on 30 April 2018 and is secured by aR20m mortgage bond, 100 ordinary shares of in CarelNolte Family Trust and suretyship from the developer.JR 209 Investments Proprietary Limited 131 027 - 131 027 -Loan bearing interest at 9.33% per annum.This loan is repayable on 31 July 2019 and is secured by aR130m and R26m mortgage bond.JR 209 Investments Proprietary Limited 254 619 252 346 254 619 252 346Loan bearing interest at 10.60% (2016: 10.00) per annum.This loan is repayable on 31 December 2018 and is secured by aR250m and R50m mortgage bond.Grandsap Investments Proprietary Limited - 3 247 - 3 247 Loan bearing interest at 9.60% (2016: 9.60) per annum.This loan was repaid on 1 March 2017 and was secured bya pledge of shares by the borrower and suretyship bythe owner and director of the borrower. Carrying value at end of year 394 921 263 956 394 921 263 956

Non-current asset 131 027 - 131 027 -Current asset 263 894 263 894 263 894 263 894Total loans to developers 394 921 263 956 394 921 263 956

Reconciliation of loans to developersCarrying value at beginning of year 263 956 53 263 956 -Loans settled (127 733) (53) (127 733) -Loans granted 258 698 263 956 258 698 263 956Carrying value at end of year 394 921 263 956 394 921 263 956

The Company has provided funding to developers who have raised the balance from third parties.




14. Cash and cash equivalents Cash and cash equivalents include cash on hand and in banks.

Cash and bank balances 47 361 47 940 16 416 29 879 Money market investments and call accounts 138 772 81 933 137 251 80 571 Distributions account 228 189 228 189 Tenant deposits 1 89 093 61 318 62 332 52 079

275 454 191 380 216 227 162 7181 The tenant deposits have a corresponding liability in trade andother payables.

15. Share capital and reserves 2 530 689 337 shares (2016: 2 417 481 790 shares) 9 212 029 8 649 058 9 243 736 8 675 167 Non-distributable reserves: Share-based payment reserve 7 432 7 565 - - Non-distributable reserves: Operational 1 3 218 537 2 891 603 3 915 070 3 382 634 Distributable reserves 570 355 521 783 (166 915) (15 138)Non-controlling interests 508 - - -

13 008 861 12 070 009 12 991 891 12 042 663

1 Included in non-distributable reserves: operational are items not included in the calculation of distributable income, includingrevaluation of investment properties, listed shares and capital profit and loss on disposal of investment properties, as detailedin the segmental results in note 32.

On 5 July 2017 the Group issued equity of 113 207 547 for cash at a price of 530 cents per share. This resulted in total capitalraised of R600m. The proceeds were used to finance acquisitions and developments.

During the prior year, the Group acquired the subsidiary, Sapphire Cove Investments 18 Proprietary Limited, as detailed in note22. R75 699 846 of this acquisition was funded by equity (16 007 242 shares at an average price of 473 cents per share). TheGroup issued further equity of 114 171 030 at a price of 530 cent per share. The proceeds were used to settle bridging facilitiesand finance developments.

These share issuances resulted in an antecedent distribution of R26 029 169 (2016: R17 623 799).

As part of the employee share scheme, the Group repurchased 1 799 712 (2016: 1 670 557) of its shares at at R5.60.

The non-distributable reserves include items of a capital nature which are not distributable to the shareholders.

The statement of changes in equity reflects a detailed analysis of movements in shareholders' funds.




Shares Shares Shares Shares

Reconciliation of shares:Opening shares 2 411 922 894 2 283 415 179 2 417 481 790 2 287 303 518Vesting of shares 1 1 644 768 - - -Share buy back (1 799 712) (1 670 557) - -New issuance 113 207 547 130 178 272 113 207 547 130 178 272Closing shares 2 524 975 497 2 411 922 894 2 530 689 337 2 417 481 790

1 As detailed in note 35


16. Interest bearing borrowingsAbsa Bank Limited 2 159 163 947 983 - 370 983 Loan bearing interest at 9.025% (2016: 8.858%) per annum.This loan was repaid and terminated on 18 December 2017. 1 - 577 000 - -Loan bearing interest at 8.962% per annum. This loan is repayable on 11 December 2020. (Facility A). 6 250 000 - - -Loan bearing interest at 9.092% per annum.This loan is repayable on 11 December 2021. (Facility B) 6 250 000 - - -Loan bearing interest at 9.152% per annum.This loan is repayable on 11 December 2022. (Facility C) 6 150 000 - - - Loan bearing interest at 8.858% per annum.This loan is repayable on 3 January 2020. (Facility D) 6 500 000 - - - Loan bearing interest at 8.728% per annum.This loan is repayable on 1 November 2019. (Facility E) 5 - - - - Loan bearing interest at 8.458% per annum.This loan is repayable on 26 June 2018. (Facility F) 5,6 675 357 - - -Loan bearing interest at 3.191% (2016: 2.412%) per annum.This loan was repayable on 1 November 2020. 4 - 370 983 - 370 983Loan bearing interest at 3.191% per annum.This loan is repayable on 1 November 2020. 4 333 806 - - -

Agense Francaise Developpement (AFD) Loan bearing interest at 6.880% (2016: 6.880%) per annum.This loan is repayable in instalments until 15 April 2024. 3,7 110 624 129 494 - -

Investec Bank Limited Loan bearing interest at 8.992% (2016: 9.208%) per annum.This loan is repayable on 13 December 2021. 2 550 000 550 000 - -

Nedbank Limited Loan bearing interest at 8.942% (2016: 9.158%) per annum.This loan is repayable on 15 December 2019. 1 548 000 548 000 - -

Old Mutual Specialised Finance Proprietary Limited 500 000 500 000 - - Loan bearing interest at 8.700% (2016: 9.008%) per annum.This loan is repayable on 13 August 2018. 270 000 270 000 - -Loan bearing interest at 8.700% (2016: 9.008%) per annum.This loan is repayable on 13 August 2018. 30 000 30 000 - -Loan bearing interest at 8.750% (2016: 9.058%) per annum.This loan is repayable on 13 August 2018. 200 000 200 000 - -

Standard Bank of South Africa Limited 1 700 000 1 725 000 - - Loan bearing interest at 9.025% (2016: 8.858%) per annum.This loan is repaid and terminated on 18 December 2017. 1 - 575 000 - -Loan bearing interest at 8.942% (2016: 9.158%) per annum.This loan is repayable on 15 December 2019. 1 300 000 300 000 - -Loan bearing interest at 8.962% per annum. This loan is repayable on 11 December 2020. (Facility A). 6 250 000 - - -Loan bearing interest at 9.092% per annum.This loan is repayable on 11 December 2021. (Facility B) 6 250 000 - - -Loan bearing interest at 9.152% per annum.This loan is repayable on 11 December 2022. (Facility C) 6 150 000 - - - Loan bearing interest at 8.608% (2016: 8.808%) per annum.This loan is repayable on 24 March 2019. 5 - 100 000 - - Loan bearing interest at 8.922% (2016: 9.138%) per annum.This loan is repayable on 13 June 2020. 2 750 000 750 000 - -




16. Interest bearing borrowings ›› (continued)

State Bank of IndiaLoan bearing interest at 8.922% (2016: 9.138%) per annum.This loan is repayable on 13 June 2020. 2 200 000 200 000 - -

5 767 787 4 600 477 - 370 983

Non-current borrowings - local 4 481 806 3 318 983 - 370 983Non-current borrowings - foreign 93 605 112 475 - -Current borrowings - local 1 175 357 1 152 000 - -Current borrowings - foreign 17 019 17 019 - -

Total interest bearing borrowings 5 767 787 4 600 477 - 370 983

1. Forms part of the R2bn Syndicated loan of which R1.152m was settled during the current year.2. Forms part of the R1.5bn Syndicated loan.3. The Group holds the loan as part of the acquisition of Atkinson House and Platinum Place.4. During the prior year, the Group entered into a United States Dollar (USD) Facility Agreement of $27m. The loan has been transferred from SA Corporate Real Estate Limited to SA Retail Properties Proprietary Limited. The loan has been restated at the prevailing USD to Rand exchange rate at year end.5. Unused facility of R300m, R200m and R75m available to draw down.6. Forms part of the R3.75m Megapool.7. These loans are denominated in Rands.

All loans are linked to JIBAR (“Johannesburg Interbank Agreed Rate”), except for the loan with Agense Francaise Developpementand the USD loan with ABSA which are linked to LIBOR (“London Interbank Offered Rate”).

These loans are secured by first mortgage bonds over a portion of the property portfolio to the value of R14 182m (2016:R12 799m), as listed below and in note 7.

PropertyAgense Francaise Developpement (AFD)Atkinson House - Johannesburg CBDPlatinum Place - Johannesburg CBD

Old Mutual Specialised Finance Proprietary Limited112 Yaldwyn Road - Jet ParkBeryl Street - Jet ParkBluff Shopping Centre - DurbanWhirlprops 25 Proprietary Limited - Durban

Syndicated loan - R2.bn1/5 Stockville Road - Westville102 Essenwood Road - Durban11 Wankel Street - Jet Park147/149 Old Main Road - Pinetown2 Beechfield Crescent - Springfield Park2 Kuba Avenue - Riverhorse Valley22 Voortrekker Road - Vredenburg28 Durham Street - Mthatha28 Goodwood Road - Mahogany Ridge30/34 Hillclimb Road - Mahogany Ridge31 Allen Drive - Bellville32 Yaldwyn Road - Jet Park33 Ontdekkers Road - Roodepoort






PropertySyndicated loan - R2.bn ›› (continued)33/37 Aloefield Crescent - Springfield Park530 Nicholson Road - Nampak-DenverBridgeport - JohannesburgCnr Koornhof Road & Essex Street - MeadowdaleCnr Old Pretoria & Alexandra Roads - MidrandCoachmans Crossing - SandtonCullinan Jewel Shopping Centre - CullinanErf 84/85/86 Shakas Head - Shakas HeadHayfields Mall - PietermaritzburgJabulani Mews - SowetoNobel Street Office Park - BloemfonteinPine Walk Centre - PinetownRhodesdene Shopping Centre - KimberleyThe Eveready Building - Port ElizabethWillow Way Shopping Centre - Lynwood

Syndicated loan - R1.5bn1 Irvine Bell Drive - Empangeni111 Mimets Road - Denver155/157 Old Main Road - Pinetown2 Fobian Street - Boksburg21 Fricker Road - Illovo24 Westmead Road - Westmead27 Jet Park Rd - Jet Park35 Surprise Road - Pinetown40 Electron Avenue - Isando5 Yaldwyn Road - Jet Park50 Mangosuthu Highway - Durban6/8 Mahogany Road - Mahogany RidgeAnchor Towers - Johannesburg CBDBlue Heron Investments - DurbanCambridge Building - Johannesburg CBDCeltis Ridge Shopping Centre - CeltisdaleChapel Court - JohannesburgCity Main II - JohannesburgCorner Handel & Crownwood Roads - OrmondeCorner Staal & Stephenson Roads - PretoriaDavenport Square Shopping Centre - GlenwoodDune Lark Investments - DurbanElmol House - JohannesburgErf 1144 Bardene Extention 48 - BoksburgGrey Heron Investments - DurbanIlanga House - JohannesburgImpilo (Jeppe Street Mall) - JohannesburgMaxwell Hall - JohannesburgMelbourne Court - JohannesburgMidway Mews - Halfway GardensMontana Crossing - MontanaMoray House - JohannesburgNewgate - NewtownNormandi Court Flat - JohannesburgQueens Court - JohannesburgSambro House - Johannesburg


PropertySyndicated loan - R1.5bn ›› (continued)Springbok Hotel - JohannesburgStellenbosch Square - StellenboschStuttaford House - JohannesburgUmlazi Mega City - Umlazi

Megapool - R3.75bn120 End Street - Doornfontein1 Marconi Street - Montague Gardens1 Holwood Park - La Lucia10 Industrial Avenue - Kraaifontein12 Sookhai Place - Westville120 Loper Avenue - Aeroport121 Malacca Road - Red Hill121 Intersite Avenue - Springfield14/24 Mahoganyfield Way - Springfield Park141 Hertz Close - Meadowdale153 Old Main Road - Pinetown18 Covora Street - Jet Park37 Yaldwyn Road - Jet Park3 The Terrace - Westway3 Wankel Street - Jet Park41 Yaldwyn Road - Jet Park5 Westgate Place - Westmead51 Pritchard Street - Johannesburg8 Director Drive - Aeroport85 Newton Street - Meadowdale88 Loper Avenue - Aeroport *89 Flanders Drive - Mt Edgecombe9/15 Lanner Road - New GermanyBurgundy - Johannesburg *Cambridge Crossing - SandtonCavendish House - Johannesburg *Corner Isotope & Bridge Streets - BellvilleCorner Rudo Nel & Tudor Streets - Jet ParkCorner Giel Basson Drive & Nathan Malach Street - GoodwoodCorner Gillits & Young Roads - PinetownComaro Crossing - OakdeneEast Point - Boksburg *Forest Road Design & Décor Centre - FourwaysFrank & Hirsch - JohannesburgGolf Park - Johannesburg *Greatermans - JohannesburgGreenpark Corner - SandtonIndlovu Complex - Johannesburg *Kempton Park Shoprite Checkers - Kempton ParkKomati Complex - Johannesburg *Legae - JohannesburgLethabong Complex - Johannesburg *Minuet - Johannesburg *Morning Glen Shopping CentreMusgrave Centre - Durban *Northpark Mall - Pretoria North




PropertyMegapool - R3.75bn ›› (continued)Panama House - JohannesburgSpringfield Value Centre - SpringfieldSuffert Street - PinetownTable Bay Industrial Park - Milnerton *Tubatse Village - LimpopoTygerberg Business Park - ParowTown Square Shopping Centre - Weltevredenpark

* Bond lodged before year end, but only registered after year end.

The Group is subject to, and is in compliance with, the following covenants:

2017 2016Covenants Ratio RatioABSA Bank Limited� Transactional loan to value A - Including all facilities - <0.50� Transactional loan to value (including mark to market value) A - Including all facilities - <0.55� Transactional interest cover - >1.40� Corporate loan to value - <0.50� Corporate interest cover - >2.00

The Standard Bank of South Africa Limited� Transactional interest cover ratio - >2.00� Transactional loan to value - <0.50� Corporate interest cover ratio - >2.00 � Corporate loan to value - <0.50 � Loans to third parties to total investment portfolio - <2.50

Old Mutual Specialised Finance Proprietary Limited� Interest cover ratio >2.00 >2.00 � Security portfolio loan to value <0.50 <0.50 � Total loan to value <0.40 <0.50 � Security tenancy level >0.90 >0.90 � Vacancy level <0.10 <0.10 � Hedging - total debt >0.70 >0.70

Syndicated loans� Transactional loan to value <0.50 <0.50 � Transactional interest cover ratio >2.00 >2.00 � Corporate loan to value (including guarantees) <0.50 <0.50 � Corporate interest cover ratio >2.00 >2.00� Loans to third parties to total investment portfolio (%) <2.50 <2.50

Megapool� Transactional loan to value - including all facilities <0.60 - � Transactional loan to value (including mark to market value) including all facilities <0.65 -� Transactional interest cover ratio >1.75 - � Corporate loan to value (including guarantees) <0.45 - � Corporate interest cover ratio >2.00 -

Agense Francaise Development (AFD)� Transactional loan to value <0.70 - � Debt Service cover ratio >1.10 - � Consolidated loan to value <0.60 -



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Debt funding capacityLoan facilities 5 767 787 4 600 477 - 370 983 Guarantee facilities 211 439 - - -Unutilised facility 574 643 900 000 - - Total facilities in place 6 553 869 5 500 477 - 370 983Difference between facility and debt funding capacity 1 947 728 529 367 6 740 151 4 335 622 Total debt funding capacity 1 8 501 597 6 029 844 6 740 151 4 706 605Less: Net swap derivatives (liability)/asset (21 570) 30 810 8 983 173 Less: Facility utilised (5 979 226) (4 600 477) - (370 983)

Debt funding capacity available at end of year 2 500 801 1 460 177 6 749 134 4 335 795 Adjusted for future capital commitments and proceeds ondisposal (1 730 774) 36 927 - - Total capital commitments 2 (2 619 510) (407 773) - - Expected proceeds on disposal 888 736 444 700 - -

Anticipated available debt capacity 3 770 027 1 497 104 6 749 134 4 335 795

1 Calculated as 50% (2016: 40% as guarantees were not included)of portfolio.2 As detailed in note 373 Anticipated available debt capacity will be adjusted as acquistionsand disposals are concluded.

The table below details changes in the Group's and Company'sliabilities arising from financing activities, including both cash andnon-cash changes. Liabilities arising from financing activities arethose for which cash flows were, or future cash flows will be,classified in the Group's and Company's statement of cash flowsas cash flows from financing activities.

Reconciliation of interest bearing borrowings withlocal lendersInterest bearing borrowings - local opening balance 4 470 983 3 770 503 370 983 420 503Repayment of interest bearing borrowings - local (1 152 000) (350 000) (344 142) -Proceeds on interest bearing borrowings - local 2 375 357 1 100 000 - -Non-cash changes - Foreign exchange adjustments (37 177) (49 520) (26 841) (49 520)Interest bearing borrowings - local closing balance 5 657 163 4 470 983 - 370 983

Reconciliation of interest bearing borrowings withforeign lendersInterest bearing borrowings - foreign opening balance 129 494 74 114 - -Repayment of interest bearing borrowings - foreign (18 870) (21 595) - -Acquisition of subsidiary - 76 975 - - Interest bearing borrowings - foreign closing balance 110 624 129 494 - -




17.Swap derivatives Designated and accounted for at fair value through profit or loss:

Interest rate swap derivativesNon-current asset 9 323 37 444 3 156 2 667Current asset 1 319 10 009 - - Non-current liability (24 591) (8 355) - -Current liability (13 527) (8 288) (79) (2 494)Carrying amount of net (liability)/asset (27 476) 30 810 3 077 173

Carrying value at beginning of year 30 810 120 972 173 (2 401)Fair value adjustment (58 286) (90 162) 2 904 2 574 Carrying value at end of year (27 476) 30 810 3 077 173

Interest rate swap agreements, for 3 - 7 years linked to JIBARor LIBOR, have been concluded to convert floating rates to fixedrates. The total nominal value of the swaps is R3 803m (2016:R3 380m).

Cross currency swap derivativesNon-current asset 129 526 - 129 526 -Current asset 11 290 - 11 290 - Non-current liability (129 963) - (129 963) -Current liability (4 947) - (4 947) - Carrying amount of net asset 5 906 - 5 906 -

Carrying value at beginning of year - - - - Fair value adjustment 5 906 - 5 906 - Carrying value at end of year 5 906 - 5 906 -

The ABSA cross currency loan is made up of the following facilities: - the ABSA cross currency R131 800 000 receivable bearinginterest at 9.152% per annum. This loan is receivable 19 September2022; and- the ABSA cross currency USD 10 000 000 payable bearinginterest at 2.174% per annum. This loan is repayable on 19September 2022.

The Group and Company carry the derivatives as financial assetsand liabilities at fair value through profit or loss.

The following table indicates the periods in which the netundiscounted cash flows are expected to occur and impact profitor loss:

Expected cash inflow/(outflow) 11 927 39 436 44 987 332Not later than 1 year (5 926) 1 917 6 702 (2 505)Later than 1 year and not later than 5 years 18 067 34 167 38 285 2 837More than 5 years (214) 3 352 - -




18.Non-controlling interestAFHCO Calgro M3 Consortium Proprietary Limited is 51% held

by Afhco Holdings Proprietary Limited and the Group has a non-controlling interest of 49% as detailed in note 22. Summarisedfinancial information in respect of the Group's subsidiaries withsignificant non-controlling interests is set out below. The

information is after inter-company eliminations with other Groupcompanies.

Revenue 1 037 - - - Profit for the year 1 037 - - - Profit attributable to non-controlling interest 508 - - -

Non-current assets 185 089 - - - Current assets 106 112 - - - Non-current liabilities 1 90 191 - - - Current liabilities 199 973 - - - Net asset 1 037 - - -

Net assets attributable to non-controlling interest 508 - - -

1 The non-controlling shareholder provided funding for AFHCO Calgro M3 Consortium Proprietary Limited to acquire investment

property. This loan is interest free and unsecured and will be settled when the company procures its borrowings.

19. Deferred taxationBalance at the beginning of year 1 909 2 016 - - Acquired through business combination (411) - - -Charged to the statement of comprehensive income 1 (3 114) (107) - -

Balance at the end of year (1 616) 1 909 - -

Comprising:Prepayments (3 243) (786) - -Provision and accruals 375 2 416 - -Assessed loss 1 228 267 - -Straight line adjustment on rental expense 24 12 - -

(1 616) 1 909 - -

The Group qualified as a REIT, with effect from 1 January 2014.In determining the aggregate capital gain or capital loss of aREIT or a controlled property company for purposes of theEighth Schedule of the Income Tax Act of 1958, as amended,any capital gain or capital loss determined in respect of thedisposal of immovable property; or a share in a controlledproperty company, must be disregarded.

1 As detailed in note 26

20. Trade and other payablesTrade and other payables 347 974 300 472 27 776 23 070Unclaimed distributions 1 099 1 610 1 099 1 610

349 073 302 082 28 875 24 680

The Group and Company have cash management policies in place to ensure that all amounts are paid within the credit timeframe.






21. Distributions paidBalance at the beginning of year - - - - Distribution attributable to shareholders 1 088 134 949 330 1 088 134 949 330 Distributions paid (1 088 134) (949 330) (1 088 134) (949 330)Balance at the end of year - - - -

22. Business combinationsDuring the year the Group acquired the following subsidiaries and joint ventures:

Portion ofownership Consideration

Date of interest and transferredCompanies Principal activities acquisition voting rights R000

2017Subsidiaries

Shanike Investments No 85 (RF) Investment property 1 February 2017 100% 692Proprietary Limited company

Autumn Star Trading 6 Investment property 1 March 2017 100% 4 652Proprietary Limited company

Electprops 91 Investment property 1 March 2017 100% 29 930Proprietary Limited company

Vaxirox Investment 3 Investment property 1 July 2017 100% 67 790Proprietary Limited companyTotal 103 064

2016Subsidiaries

Sapphire Cove Investments 18 Investment property 11 June 2016 100% 75 255Proprietary Limited company

Rainbow Place Properties 80 Investment property 1 November 2016 100% 164Proprietary Limited company

AFHCO Calgro M3 Consortium Investment property 15 August 2016 51% * -Proprietary Limited company

Afhco Holdings investment of Investment property 1 July 2016 100% 11 648Platinum Place 1 companyTotal 87 067

* Company acquired at no consideration. There was no non-controlling interest in 2016 recognised as there were no retainedincome or loss at year end. Operational activity commenced in 2017.

Musgrave Centre, Durban, KwaZulu Natal


22. Business combinations ›› (continued)

During the year the Group acquired the following subsidiaries and joint ventures:

Portion ofownership Consideration

Date of interest and transferredCompanies Principal activities acquisition voting rights R000

2017Joint ventures 2

Graduare Mauritius Limited Holding company of 1 May 2017 50% 22 401Phase 3A development property company

earning net rentalincome

Graduare Mauritius Limited Holding company of 1 December 2017 50% 38 511Phase 3B development property company

earning net rentalincome

Total 60 912

The AFHCO Group was acquired on 1 July 2014 to enter the residential Johannesburg inner-city sector and thus to furtherdiversify the Group's property portfolio. The additional acquisitions in subsidiaries in 2016 and 2017 provided further supportto this strategy.

On 1 November 2015, the Group entered into the Zambian market in order to diversify internationally. Additional investmentswere made during the current year.

On 1 July 2017, the Group entered into the storage sector with the acquistion of Vaxirox Investment Proprietary Limited dueto its defensive characteristics. As part of the storage sector acquisition, the Group earned income from the deal structuringof R10 668 750. This has been recognised as other income in the statement of comprehensive income.

Control of the subsidiaries were acquired through the acquisition of shares.

Under a contingent consideration arrangement:1.) The purchase price may be adjusted in the event that AFHCO Holdings Proprietary Limited and its subsidiaries (“AFHCOGroup”) do not meet the forecasted income within two years from acquisition used in determining the price of this acquisition.This adjustment is limited to 12.5% of the aggregate gross value of the AFHCO Group's property portfolio.

2.) Refer to note 41 for details regarding the yield, purchase price and the tax guarantee.

3.) The purchase price may be adjusted in the event that Vaxirox Investment Proprietary Limited does not meet the forecastedincome within two years from acquisition.




The directors are of the opinion that no adjustment to the purchase price is necessary as at the date of acquisition as theyexpect the acquisitions to meet their forecasts. This opinion had not changed at the reporting date and no asset has been raisedfor this amount as at 31 December 2017.

Investment in Investment in Investment insubsidiaries joint ventures Total subsidiary

2017 2017 2017 2016R000 R000 R000 R000

Non-current assetsInvestment property 178 207 88 176 266 383 271 809Straight line rental adjustment - - - (76)Rental receivable - straight line adjustment - - - 76Property, plant and equipment 57 - 57 2 033Current assetsTrade and other receivables 5 320 - 5 320 1 447Taxation receivable 456 - 456 -Cash and cash equivalents 186 - 186 2 562Non-current liabilitiesLoans from shareholder 60 823 - 60 823 114 297Interest-bearing borrowings - foreign - 27 264 27 264 76 975Current liabilitiesTrade and other payables 4 302 - 4 302 4 287Deferred taxation 411 - 411 -Current loan 15 626 - 15 626 -

103 064 60 912 163 976 82 292Gain on acquisition:Consideration 103 064 60 912 163 976 87 067Less fair value of identifiable assets acquired and liabilitiesassumed (103 064) (60 912) (163 976) (82 292)

- - - 4 775

Gain on bargain purchase - - - (232)Goodwill - - - 5 007

- - - 4 775

During the prior year the goodwill and gain on acquisition of subsidiaries arose due to: � Rainbow Place Properties 80 Proprietary Limited: the Group received the property, plant and equipment at no consideration. � Afhco Holdings investment of Platinum Place: The goodwill relates to a consideration being paid in respect of a preferential

debt rate inherited from the sellers.


2017 2017 2017 2016R000 R000 R000 R000

Net cash flow on acquisition:Consideration 103 064 60 912 163 976 87 067Settlement of shareholder loan - - - 114 296Deferred compensation (1 306) - (1 306) (11 371)Other non-cash items - - - (75 700)Less cash and cash equivalent balances acquired (186) - (186) (2 562)

101 572 60 912 162 484 111 730




The consolidated profit and revenue for the year attributable to the acquisition of subsidiaries and joint ventures had thesebusiness combinations been in effect at the beginning of the year is set out below. Management considers these estimatednumbers represent an approximate measure of the performance of the combined group on an annualised basis and to providea reference point for future comparisons.


2017 2017 2017 2016R000 R000 R000 R000

From date of acquisitionProfit / (loss) 116 992 1 841 118 833 8 045Revenue 114 743 2 385 117 128 14 003

Full yearProfit / (loss) for the year 190 511 1 841 192 352 19 161Revenue 137 720 2 385 140 105 38 669


23. IncomeOperating rent 1 490 729 1 306 211 - -Turnover based rent 19 204 21 970 - -Rent 1 509 933 1 328 181 - -

Straight line rental adjustment 31 387 13 094 - - Recovery of property expenses 572 524 491 810 - -

Interest income 1 78 263 48 349 55 474 29 254 Dividends from subsidiary companies 1 - - 963 326 851 581

Dividends from investment in listed shares 1 16 138 - 16 138 -Other income 1 17 096 - 6 427 -Total income 2 225 341 1 881 434 1 041 365 880 835

1. Excluded from the consolidated revenue, but included in theCompany's revenue, as this income stream arises from the

Company's ordinary activities.

Interest incomeMoney markets investments and call accounts 60 855 31 628 52 289 23 465Tenant deposits 2 994 3 541 1 983 2 769Cash and bank balances 2 917 3 485 1 202 3 020Tenant 11 497 9 695 - -

78 263 48 349 55 474 29 254

24. Interest expenseBorrowings 385 942 274 662 14 142 14 720Operational 764 256 - -

386 706 274 918 14 142 14 720




25. Capitalisation of interestInterest capitalised during development phases 57 432 75 890 - -

Interest was capitalised at annual rates ranging from 8.9% to 9.5% (2016: 8.7% to 9.4%).

The capitalised interest is included in the investment propertyas detailed in note 7.

26. TaxationSouth African normal taxationCurrent taxation (542) (901) - - Deferred taxation (3 114) (107) - - Deferred taxation other (3 114) (107) - -

Total (3 656) (1 008) - -

Deferred taxation is not provided on the revaluation ofproperties. Refer to note 19.

28 Goodwood Road, Mahogany Ridge, KwaZulu Natal




26. Taxation ›› (continued)

Taxation rate reconciliation % % % %

Standard rate 28.0 28.0 28.0 28.0Distributions vested in beneficiary 1 (20.3) (11.5) (21.6) (12.0)Non-taxable income (7.5) (16.5) (6.4) (16.0) Foreign exchange loss on capital loan (0.7) (0.6) (0.7) (0.6) Revaluation of investment properties (8.1) (16.9) - - Revaluation of investment in subsidiaries - - (9.8) (17.5) Swap derivatives 1.0 1.0 (0.2) - Profit from joint ventures 0.4 (1.0) 0.5 - Revaluation of investment in listed shares 0.6 - - - Loan write-off - - 1.9 - Other 2 (0.7) 1.0 1.9 2.1

Effective rate 0.2 - - -

1 No taxation is provided for against operating profit, to the extent that it is declared as tax deductible distributions in termsof section 25BB of the Income Tax Act.

2 Other non-taxable income includes profit and loss on disposal and unvested dividends from listed companies.

Deductible temporary differences and unutilised tax losses for which no deferred tax asset has been raised as it is unlikely thattaxable income will arise against which to utilise this asset.

Consolidated Company

2017 2016 2017 2016R000 R000 R000 R000

Estimated taxation losses for which no deferred taxation assetraised, due to the REIT tax status of the Group, probability ofutilising the tax benefit is unlikely. 42 606 32 606 10 888 10 888

Consolidated

2017 2016R000 R000

27. Earnings and diluted earnings per shareEarnings 1 525 629 2 480 003

Weighted earnings and diluted earnings per share (cents) 61.68 106.86

* Calculated on the profit after tax and the weighted average number of shares in issue 2 473 310 169 (2016: 2 320 804 764)and diluted weighted average number of shares in issue 2 467 596 329 (2016: 2 316 036 268). As the diluted weighted earningsper share is anti-dilutive, the earnings per share is the assumed diluted earnings per share.



Consolidated Consolidated2017 2017 2016 2016R000 CPS R000 CPS

28.Headline earnings per shareThe calculation of headline earnings per share is based onheadline earnings of R 1 058 265 000 (2016: R953 777 000)of the Group and 2 473 310 169 (2016: 2 320 804 764)weighted number of shares in issue during the year.

Reconciliation of profit after taxation to headlineearnings.

Profit after taxation attributable to shareholders 1 525 629 61.68 2 480 003 106.86 Adjustments for: Capital loss/(profit) on disposal of investment properties 8 430 (299) Revaluation of investment properties (407 465) (1 499 813) Revaluation of investment property in joint ventures (68 329) (25 882) Gain on acquisition of subsidiary - (232)

Headline earnings 1 058 265 42.79 953 777 41.10

Consolidated Company2017 2016 2017 2016cents cents cents cents

per share per share per share per share

29. DistributionNo. 3 declared 29 August 2016 and paid 3 October 2016 - 21.44 - 21.44No. 4 declared 24 February 2017 and paid 29 March 2017 - 21.58 - 21.58No. 5 declared 29 August 2017 and paid 2 October 2017 22.38 - 22.38 -No. 6 declared 27 February 2018 and to be paid 29 March 2018 22.54 - 22.54 -

44.92 43.02 44.92 43.02



30. Operating lease arrangementsThe minimum future lease payments receivable undernon-cancellable operating leases are as follows:Not later than 1 year 1 162 342 1 004 129 - - Later than one year and not later than 5 years 2 348 432 1 971 501 - - Later than 5 years 1 927 314 1 262 468 - -

5 438 088 4 238 098 - -

31. Operating lease expense andcommitmentsRent paid recognised as an expense:Minimum rental expense 16 236 4 780 - - Contingent rental expense 1 203 878 - - Total rental expense 17 439 5 658 - -



31. Operating lease expense and

commitments ›› (continued)

The minimum future lease payments payable undernon-cancellable operating leases are as follows:

Not later than 1 year 10 889 6 894 - - Later than 1 year and not later than 5 years 45 511 - - - Later than 5 years 249 912 - - - 306 312 6 894 - -The minimum future sub-lease payments receivable undernon-cancellable operating leases are as follows:

Not later than 1 year 58 887 25 669 - - Later than 1 year and not later than 5 years 147 117 3 650 - - Later than 5 years 168 954 - - - 374 958 29 319 - -

Operating lease expense relates to leases of land with leases expiring during 2049.Operating lease income from leasehold properties with non-cancellable opearing leases relates to leases expiring during 2044.The contingent rental expense is calculated as a percentage of the net rental income generated by the property.


East Point, Cnr Northrand & Rietfontein Roads, Jansen Park, Boksburg, Gauteng


Industrial Retail Commercial AFHCO Storage Corporate ConsolidatedR000 R000 R000 R000 R000 R000 R000

32. Segmental results2017 Information on reportablesegments

Revenue 605 400 932 048 128 889 437 652 9 855 - 2 113 844

Rental income (excluding straight linerental adjustment) 516 069 555 598 96 945 331 541 9 780 - 1 509 933Net property expenses (46 328) (1 770) (19 062) (67 487) (4 262) - (138 909) Property administration fees (6 128) (23 326) (2 577) (51 025) - - (83 056) Property expenses (139 135) (317 839) (47 105) (119 961) (4 337) - (628 377) Recovery of property expenses 98 935 339 395 30 620 103 499 75 - 572 524

Net property income 469 741 553 828 77 883 264 054 5 518 - 1 371 024Straight line rental adjustment (9 604) 37 055 1 324 2 612 - - 31 387Dividends from investments in listedshares - - - - - 16 138 16 138Other income - - - - - 17 096 17 096Interest income - - - - - 78 263 78 263 Interest expense - - - - - (386 706) (386 706)Profit from investment in joint ventures - - - - - 121 333 121 333Foreign exchange adjustments - - - - - 37 176 37 176Group expenses - - - - - (68 033) (68 033)Capital loss on disposal of investmentproperties - - - - - (8 430) (8 430)Revaluation of investment properties 106 454 293 587 (18 130) 11 789 13 765 - 407 465 Investment properties 96 850 330 642 (16 806) 14 401 13 765 - 438 852 Straight line rental adjustment 9 604 (37 055) (1 324) (2 612) - - (31 387)Revaluation of investment in shares - - - - - (34 540) (34 540)Revaluation of swap derivatives - - - - - (52 380) (52 380)Taxation - - - - - (3 656) (3 656)Profit after taxation 566 591 884 470 61 077 278 455 19 283 (283 739) 1 526 137Other comprehensive income, net of taxation - - - - - (88 018) (88 018)

Total comprehensive income 566 591 884 470 61 077 278 455 19 283 (371 757) 1 438 119

Profit after taxation attributable to Owners of the company 566 591 884 470 61 077 277 947 19 283 (283 739) 1 525 629 Non-controlling interest - - - 508 - - 508

Total 566 591 884 470 61 077 278 455 19 283 (283 739) 1 526 137




Consolidated2017R000

32. Segmental results ›› (continued)

2017 Information on reportable segments ›› (continued)

Reconciliation between profit after tax and distributable earnings

Profit after taxation 1 525 629Capital loss on disposal of investment properties 8 430Revaluation of investment properties (407 465)Revaluation of investment property in joint ventures (68 329)Headline earnings 1 058 265Foreign exchange adjustments (37 176)Revaluation of swap derivatives 52 380Revaluation of investment in shares 34 540Depreciation 4 126 Non-distributable expenses on investment in joint venture 491Straight line rental adjustment (31 387)Dividend from investment in shares not yet declared 7 645Antecedent distribution 26 029Non-distributable expenses 21 797Distributable income attributable to shareholders 1 136 710

Industrial Retail Commercial AFHCO Storage Corporate ConsolidatedR000 R000 R000 R000 R000 R000 R000

Properties (excluding straight

line rental adjustments) 4 766 350 7 158 886 1 078 100 3 713 529 116 068 - 16 832 933Non-current investment property 4 146 377 6 886 103 882 786 3 681 006 116 068 - 15 712 340 At valuation 3 906 700 4 441 900 846 000 3 473 279 116 068 - 12 783 947 Straight line rental adjustment (63 323) (131 297) (18 314) (18 923) - - (231 857) Under development 303 000 2 575 500 55 100 226 650 - - 3 160 250Non-current investment property heldfor sale 539 182 139 399 173 332 13 178 - - 865 091 Classified as held for disposal 556 650 141 486 177 000 13 600 - - 888 736

Straight line rental adjustment (17 468) (2 087) (3 668) (422) - - (23 645)

Other assets 153 587 333 860 54 110 210 153 12 067 2 049 688 2 813 465Total assets 4 839 146 7 359 362 1 110 228 3 904 337 128 135 2 049 688 19 390 896Total liabilities 69 765 110 906 19 426 316 816 5 040 5 860 082 6 382 035

Acquisitions and improvements 70 000 461 017 51 206 1 218 741 102 303 - 1 903 267

The Group acquired storage properties in 2017 resulting in an additional segment.


Industrial Retail Commercial AFHCO Corporate ConsolidatedR000 R000 R000 R000 R000 R000

32. Segmental results›› (continued)

2016 Information on reportablesegments

Revenue 574 036 816 697 133 516 308 836 - 1 833 085

Rental income (excluding straight linerental adjustment) 493 970 493 928 103 369 236 914 - 1 328 181Net property expenses (31 521) (8 804) (18 831) (63 603) (412) (123 171) Property administration fees (5 880) (21 433) (2 650) (37 208) (412) (67 583) Property expenses (128 206) (283 927) (43 533) (91 732) - (547 398) Recovery of property expenses 102 565 296 556 27 352 65 337 - 491 810

Net property income 462 449 485 124 84 538 173 311 (412) 1 205 010Straight line rental adjustment (22 499) 26 213 2 795 6 585 - 13 094Interest income - - - - 48 349 48 349 Interest expense - - - - (274 918) (274 918)Gain on acquisition of subsidiary - - - - 232 232 Profit from investment in joint ventures - - - - 85 288 85 288 Foreign exchange adjustments - - - - 49 520 49 520Group expenses - - - - (63 764) (63 764)Capital profit on disposal of investmentproperties - - - - 299 299Revaluation of investment properties 225 004 1 151 157 19 027 104 625 - 1 499 813 Investment properties 202 505 1 177 370 21 822 111 210 - 1 512 907 Straight line rental adjustment 22 499 (26 213) (2 795) (6 585) - (13 094)

Revaluation of investment in shares - - - - 8 250 8 250Revaluation of swap derivatives - - - - (90 162) (90 162)Taxation - - - - (1 008) (1 008)Profit after taxation 664 954 1 662 494 106 360 284 521 (238 326) 2 480 003Other comprehensive income, net of taxation - - - - (117 773) (117 773)

Total comprehensive income 664 954 1 662 494 106 360 284 521 (356 099) 2 362 230


20 Kyalami Road, Pinetown, KwaZulu Natal


Consolidated2016R000

32. Segmental results ›› (continued)

2016 Information on reportable segments ›› (continued)

Reconciliation between profit after tax and distributable earningsProfit after taxation 2 480 003Capital profit on disposal of investment properties (299)Revaluation of investment properties (1 499 813)Revaluation of investment property in joint ventures (25 882)Gain on acquisition of subsidiary (232)Headline earnings 953 777Foreign exchange adjustments (49 520)Revaluation of swap derivatives 90 162Revaluation of investment in shares (8 250)Depreciation 2 422 Non-distributable expenses on investment in joint venture 944Straight line rental adjustment (13 094)Antecedent distribution 17 624Non-distributable expenses 21 644 Distributable income attributable to shareholders 1 015 709

Industrial Retail Commercial AFHCO Corporate ConsolidatedR000 R000 R000 R000 R000 R000

Properties (excluding straight linerental adjustments) 4 642 500 6 774 200 1 043 700 2 561 411 - 15 021 811 Non-current investment property 4 537 104 6 271 371 1 015 440 2 533 760 - 14 357 675 At valuation 4 380 300 4 049 700 1 019 700 2 273 526 - 11 723 226 Straight line rental adjustment (90 396) (96 329) (16 260) (16 451) - (219 436) Under development 247 200 2 318 000 12 000 276 685 - 2 853 885Non-current investment propertyheld for sale 14 980 402 123 12 000 10 918 - 440 021 Classified as held for disposal 15 000 406 500 12 000 11 200 - 444 700 Straight line rental adjustment (20) (4 377) - (282) - (4 679)

Other assets 215 914 261 610 48 484 34 305 1 631 202 2 191 515Total assets 4 767 998 6 935 104 1 075 924 2 578 983 1 631 202 16 989 211Total liabilities 51 694 117 853 22 744 191 538 4 535 373 4 919 202

Additions and acquisitions 87 095 643 496 15 078 675 780 - 1 421 449

Revenue reported above represents revenue, from external tenants, generated in South Africa. The Group does not placesignificant reliance on any single tenant. No single tenant contributed 10% or more to the Group's revenue for either 2017 or2016.

The segmental reporting represents the sectors in which the information is regularly provided to the chief decision makers aseach sector has an associated risk profile and is managed separately.



33. Financial instruments and financial risk managementThe Group and Company is exposed to strategic and business risk, financial risk, regulatory and compliance risk.

This note deals with certain financial analysis relating to the financial risks.

Capital risk managementThe Group's and Company's capital comprises shareholders' equity and interest-bearing borrowings. Capital is actively managedto ensure that the Group and Company is properly capitalised and funded at all times, having regard to its regulatory needs,prudent management and the needs of its stakeholders.

The Group and Company has a business planning process that runs on an annual cycle with regular updates to projections. Itis through this process, which includes risk and sensitivity analysis of forecasts, that the Group's and Company's capital ismanaged. Specifically, the Group and Company has adopted the following capital management policies:

� Maintenance, as a minimum, of capital sufficient to meet the statutory requirements and such additional capital as management believes is necessary.� Maintenance of an appropriate level of liquidity at all times. The Group and Company further ensures that it can meet its expected capital and financing needs at all times, having regard to the business plans, forecasts and any strategic initiatives.� Maintenance of an appropriate level of issued shares based on approval from the shareholders and the Board.

The Group and Company has both qualitative and quantitative risk management procedures to monitor the key risks andsensitivities of the business. This is achieved through scenario analysis and risk assessments. From an understanding of theprincipal risks, appropriate risk limits and controls are defined.

The Group's and Company's capital risk management strategy has remained unchanged from the prior year.

Gearing ratioThe Group's and Company's Investment Committee reviews the capital structure on a quarterly basis. As part of this review,the committee considers the cost of capital and the risks associated with each class of capital. The Group and Company limitsits borrowing capacity inclusive of its guarantees to 50% (2016: 50%) of the total investment portfolio value and 40% (2016:40%) exclusive of its guarantees.

The debt to total investment portfolio ratio at the year-end was as follows:


Debt (before effective interest rate adjustment) 5 767 787 4 600 477 - 370 983Total investment portfolio * 17 850 226 15 874 000 13 707 629 12 525 926 Gearing ratio 32% 29% 0% 3%

* Total investment portfolio includes investment property (at valuation), property under development, properties classified as held for disposal, investment in subsidiary companies, joint ventures and shares.

Financial risk management objectivesIn the normal course of operations, the Group and Company is exposed to interest rate risk, credit risk, liquidity and foreigncurrency risk arising from its financial instruments. In order to manage these risks, the Group and Company may enter intotransactions which make use of derivatives. The Group and Company does not speculate in or engage in the trading of derivativeinstruments.

Interest rate risk managementInterest rate movements impact on the net cost of the Group's and Company's short term cash investments and interest-bearingborrowings. The risk is managed by the Group and Company by maintaining an appropriate mix between fixed and floating rateborrowings, monitoring cash flows and investing surplus cash at negotiated rates. The Group and Company enters into interestrate swap contracts, from time to time, for the purposes of cash flow hedging.



33. Financial instruments and financial risk management ›› (continued)

Interest rate sensitivity analysisThe sensitivity analysis is based on the exposure to interest rates at the reporting date. For floating rate assets and liabilities,the analysis assumes that the amount of asset or liability outstanding at the reporting date was outstanding for the whole year.A 50 basis point increase or decrease is used when reporting interest rates internally to key management personnel and representsmanagement's reasonable assessment of the possible change in interest rates. If interest rates were 50 basis points higher orlower and all other variables were constant, the Group's and Company's net profit for the year ended 31 December 2017 woulddecrease or increase by R7,8m (2016: increase or decrease by R5,1m) and R1,0m (2016: increase or decrease by R0,8m)respectively.

Credit risk managementCredit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Groupand Company. The Group's and Company's financial assets that are subject to credit risk are cash and cash equivalents andtrade and other receivables. The maximum exposure to credit risk at the end of the year was:


Cash and cash equivalents 275 454 191 380 216 227 162 718 Trade receivables 68 553 34 497 - - Other receivables, accrued interest and current loans to subsidiary companies (excluding VAT receivable andprepayments) 480 845 390 656 125 232 92 866Non-current portion of loans to subsidiary companies - - 3 463 038 2 262 337Loans to developers 394 921 263 956 394 921 263 956Other financial assets 388 666 166 696 170 759 54 697Loans and receivables (including cash and cash equivalents) 1 608 439 1 047 185 4 370 177 2 836 574

Credit risk with regard to trade and other receivables is minimised by the large and diverse tenant base, spread across diverseindustries and geographical areas.

The Group and Company does not have any significant credit risk exposure to any single tenant counterparty.

Credit risk attached to the Group's and Company's cash and cash equivalents is minimised by its cash resources being placedin money market investments with several financial institutions of high credit standing, in terms of pre-determined exposurelimits. Exposure limits and underlying money market exposures are assessed bi-annually and reviewed by the Audit Committeeto limit concentration to a single institution and to monitor the risks associated with the underlying money market exposures.

Management has established a credit policy in terms of which each new tenant is individually analysed for credit worthinessbefore the Group's standard payment terms and conditions are offered which include a provision of a deposit. Managementmonitors the financial position of its tenants on an ongoing basis.

Loans to subsidiary companies are monitored and provision is made, where necessary, for any irrecoverable amounts.

Foreign currency risk managementThe Group undertakes transactions denominated in foreign currencies, consequently, exposure to exchange rate fluctuationsarise.


East Park Mall, Lusaka, Zambia




33. Financial instruments and financialrisk management ›› (continued)

The carrying amounts of the Group's foreign currencydenominated assets and liabilities at the end of the reportingperiod are as follows:

Non-current assetInvestments in joint ventures 847 033 799 389 847 033 799 389Non-current liabilityInterest bearing borrowings (333 806) (370 983) - (370 983)Cross currency swap * (123 632) - (123 632) -

* The Group entered into a cross currency swap to furthermitigate its exposure to its foreign exchange risk as detailed innote 17.

Foreign currency sensitivity analysisThe Group is mainly exposed to the US Dollar currency.

The following table details the Group's sensitivity to a 5%increase and decrease in the Rand against the US Dollar. 5%is the sensitivity rate used when reporting foreign currency riskinternally to key management personnel and representsmanagement's assessment of the reasonably possible changein foreign exchange rates. The sensitivity analysis includes onlyoutstanding foreign currency denominated items and adjuststheir translation at the year-end for a 5% change in foreigncurrency rates. A positive number below indicates an increasein profit or equity where the Rand strengthens 5% against theUS Dollar. For a 5% weakening of the Rand against the USDollar, there would be a comparable impact on the profit orequity, and the balances below would be negative.

Profit or loss on financial assets and liabilities 25 661 21 420 42 351 21 420Profit or loss on derivaties (6 181) - (6 181) -Total profit or loss 19 480 21 420 36 170 21 420

The Group's sensitivity to foreign currency has decreased during the latter part of the current year, due to the Group enteringa cross currency swap.




The following table represents relevant information on tradereceivables at the reporting date:

Trade receivables 91 062 57 378 - - Past due but not impaired 68 553 34 497 - - Impaired (excluding VAT) 22 509 22 881 - - Allowances for doubtful debts (22 509) (22 881) - - Trade receivables net of allowance for doubtful debts 68 553 34 497 - - Ageing of trade receivables past due but not impaired 68 553 34 497 - - < 30 days 15 128 10 411 - - 30 days 7 013 3 985 - - 60+ days 46 412 20 101 - -

Ageing of impaired trade receivables 22 509 22 881 - - < 30 days 547 328 - - 30 days 508 765 - - 60+ days 21 454 21 788 - -

Allowance for doubtful debtsThe movement in the provision for doubtful debts during theyear was as follows:

Balance at the beginning of the year 22 881 29 909 - - Acquired through business combination - 90 - - Amounts written off during the year (6 704) (12 069) - (97)Additional provisions recognised 6 332 4 951 - 97Balance at the end of the year 22 509 22 881 - - The carrying amount of financial assets recorded in the financialstatements, which is net of impairment losses, represents theGroup's and Company's maximum exposure to credit risk withouttaking into account the value of any collateral obtained.

The calculation of the allowance for doubtful debts as a percentageof arrear rentals is shown in the table below. The provision iscarried exclusive of VAT whilst the arrear rentals include VAT.This has been taken into account in the calculation below.

Provision excluding VAT 22 509 22 881 - - VAT thereon 3 151 3 203 - - Provision including VAT 25 660 26 084 - -

Trade receivables 91 062 57 378 - -

Provision as a % of trade receivables 28% 45% 0% 0%

Management and the Board do not consider there to be any material credit risk exposure, which is not adequately providedfor.





Liquidity risk management

Repayment profileLess than three months 473 761 351 039 27 559 26 269 Trade and other payables * 347 974 300 471 27 776 23 070 Swap derivatives 1 922 (56) (217) 815 Interest on interest-bearing borrowings 123 865 50 624 - 2 384 Between three months and one year 1 539 071 1 330 484 (6 485) 9 562 Interest-bearing borrowings - local 1 175 357 1 152 000 - - Interest-bearing borrowings - foreign 17 019 17 019 - - Swap derivatives 4 004 (1 861) (6 485) 1 690 Interest on interest-bearing borrowings 342 691 163 326 - 7 872

Between one and five years 5 375 714 3 670 211 (38 285) 409 435 Interest-bearing borrowings - local 4 481 806 3 318 983 - 370 983 Interest-bearing borrowings - foreign 68 075 112 475 - - Swap derivatives (18 067) (34 167) (38 285) (2 837) Interest on interest-bearing borrowings 843 900 272 920 - 41 289 After five years 117 690 (3 352) - - Interest-bearing borrowings - foreign 25 530 - - - Swap derivatives 214 (3 352) - - Interest on interest bearing borrowings 1 755 - - - Loan from non-controlling shareholder 90 191 - - -

Total 7 506 236 5 348 382 (17 211) 445 266

* Excluding unclaimed distributions.

The Group and Company expects to meet its other obligationsfrom operating cash flows, existing facilities as detailed in note16 and refinancing long term debt.

Categories of financial instrumentsNon-derivative financial instruments:Financial assets Designated as at fair value through profit or loss 170 260 52 800 10 864 297 10 290 826 Investment in fixed companies - - 9 847 004 9 438 637 Investment in shares 170 260 52 800 170 260 52 800 Investment in joint ventures - - 847 033 799 389 Loans and receivables (including cash and cash equivalents) 1 163 362 880 489 4 198 960 2 781 877 Non-current portion of loans to subsidiary companies - - 3 463 038 2 262 337 Trade receivables 68 553 34 497 - - Other receivables and accrued interest (excluding VAT receivable and prepayments) 206 028 276 760 20 343 20 302 Current portion of loans to subsidiary companies - - 103 932 70 667 Other financial assets 218 406 113 896 499 1 897 Loans to developers 394 921 263 956 394 921 263 956 Cash and cash equivalents 275 454 191 380 216 227 162 718

1 333 622 933 289 15 063 257 13 072 703





Financial liabilities Amortised cost 6 142 778 4 845 292 2 095 560 1 044 966 Interest-bearing borrowings 5 767 787 4 600 477 - 370 983 Trade and other payables (exluding VAT and rentals received in advance) 284 800 244 815 28 680 24 485 Loans from subsidiary companies - - 2 066 880 649 498 Loan from non-controlling shareholder 90 191 - - - Derivative financial instruments:Designated as at fair value through profit or lossInterest rate swap derivatives 27 476 (30 810) (3 077) (173)Cross currency swap derivatives (5 906) - (5 906) - Fair value of financial assets and liabilities that aremeasured at fair value on a recurring basis:

Fair value measurements recognised in the statement of financialposition. The table below analyses financial instruments that aremeasured at fair value, subsequent to initial recognition. Thefinancial instruments are grouped into levels 1 to 3 based on thedegree to which the fair value is observable. The different levelshave been defined as follows:� Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;� Level 2 fair value measurements are those derived from inputs, other quoted prices included within level 1, that are

observable for the asset or liability, either directly (i.e. asprices) or indirectly (i.e. derived from prices); and

� Level 3 fair value measurements are those derived from valuation techniques that include inputs for the assets or liability that are not based on observable market data i.e.

unobservable inputs.

Level 1Financial assets designated as at FVTPL Investment in listed shares 170 260 52 800 170 260 52 800

Level 2Derivative financial (liability)/assets 1

Interest rate swap derivatives (27 476) 30 810 3 077 173 Cross currency swap derivatives 5 906 - 5 906 -

Level 3Financial assets designated as at FVTPL Investment in subsidiary companies 2 - - 9 847 004 9 438 637 Investment in joint ventures 3 847 033 799 389 847 033 799 389

There were no transfers between the levels.


37 Yaldwyn Road, Jet Park, Gauteng




Investment in subsidiary companiesFinancial assets designated as at FVTPLCarrying value at beginning of year - - 9 438 637 7 960 866Revaluation of investment in subsidiaries recognised throughprofit or loss - - 505 079 1 477 771Impairment - - (99 986) -Reclassified as loan from subsidiary - - 3 274 -Carrying value at end of year - - 9 847 004 9 438 637

Investment in joint venturesFinancial assets designated as at FVTPLCarrying value at beginning of year - - 799 389 850 068Revaluation of investment in joint ventures recognised throughprofit or loss 4 - - 33 315 (32 488)Net cash movement: - - 14 329 (18 191) Additions in investment in joint ventures - - 60 912 - Advance from investment in joint ventures - - (46 583) (18 191)

Carrying value at end of year - - 847 033 799 389

Valuation technique:1 The interest rate and cross currency swap derivatives are valued based on the discounted cash flow method. Future cash flowsare estimated based on exchange and forward interest rates (from observable yield curves at the end of the reporting period)and contract interest rates, discounted at a rate that reflects the credit risk of various counterparties.

2 The value of the investment in the property companies is deemed to be that of the underlying investment properties, as the property companies fully distribute all distributable income. The fair value of the entire portfolio of investment properties was

determined by independent registered valuers and approved on 23 February 2018 by the Board of Directors as detailed in note 7.



33. Financial instruments and financial risk management ›› (continued)Valuation technique: ›› (continued)3 The value of the investment in the joint ventures is deemed to be that of the underlying investment properties, as the joint ventures fully distribute all distributable income. The fair value of the entire portfolio of investment properties was determined

by independent registered valuers and approved on 23 February 2018.

4 The revaluation of the investment in the joint ventures is due to the profit in the underlying company and the foreign exchangeadjustment since acquisition.

Level 3: Financial assets designated as at FVTPL sensitivity analysisThe sensitivity analysis is based on the exposure to the discount rates and growth rates at the reporting date. A 50 basis pointsincrease or decrease in the discount rate and a 100 basis points increase or decrease in growth rates represents management'sreasonable assessment of the possible change in market rates:

Growth rateDiscount rate (1.0%) Current 1.0%

R000 R000 R000

Investment in subsidiary companies 2017Discount rate(0.5%) 9 493 095 10 309 436 11 235 591Current 9 073 394 9 847 004 10 776 3660.5% 8 671 117 9 435 821 10 317 852

Investment in subsidiary companies 2016Discount rate(0.5%) 9 109 850 9 867 240 10 748 744Current 8 706 875 9 438 637 10 288 6120.5% 8 320 702 9 028 203 9 848 188

Investment in joint ventures 2017Discount rate(0.5%) 846 425 849 506 853 329Current 844 116 847 033 850 6860.5% 841 954 844 693 848 156

Investment in joint ventures 2016Discount rate(0.5%) 792 649 829 931 876 216Current 764 696 799 389 844 2230.5% 737 908 771 673 813 592

Fair value of financial instrumentsThe fair value of financial assets and financial liabilities are determined as follows:� the fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid

markets is determined with reference to quoted market prices;� the fair value of other financial assets and liabilities (excluding derivative instruments) is determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes for similar instruments;� the fair value of derivative instruments is calculated using quoted prices. Where such prices are not available, use is made of discounted cash flow analysis using the applicable yield curve for the duration of the instruments for non-optional derivatives

and option pricing models for optional derivatives; and� swap derivatives are measured at the present value of future cash flows estimated and discounted based on the applicable

yield curves derived from quoted interest rates.


Beryl Street, Jet Park, Gauteng



34.Related party transactionsPARTY TRANSACTION TERMS CONCERNED TYPE & CONDITIONS

Related party transactionsNedbank Limited Rental Income Based on market-related 7 397 8 480 - -Sponsor of the ratesCompany Interest income Based on market-related 6 071 6 947 6 071 6 947

ratesSponsor fees Based on JSE regulations (148) (148) - -

SA Corporate Real Recoveries Cost recovery basis - - (9 734) (10 080)Estate Fund ManagersProprietary LimitedManaging Company

Subsidiaries Distributions Based on ownership - - 973 306 851 581

Balances owing/receivable at year endSA Corporate Prepayments of Based on the direct Real Estate Fund recoveries recoveries - - 45 424 19 984

Managers Proprietary Limited Recoveries payable Based on the direct - - (7 847) (2 634)

Managing Company recoveries

The related party transactions and balances are at arm's length. The directors are deemed to be key management. Refer tonotes 35 and 36 for the directors' emoluments for compensation paid to key management personnel by the Group or Companyand to note 6 for intergroup loans, interest rates and repayment terms.



35. Share-based paymentsThe Group has a forfeitable share plan and co-investment plan for executives and senior employees. The terms of the plans,as approved by shareholders at the annual general meeting are:

Forfeitable share plan (“FSP”)Executives and senior employees were offered shares in the Group at no cost to the employee, that would vest based on thefollowing vesting conditions:� remaining in the employment of the Group for a duration of a three year period from the date of the award;� distribution growth relative to the SAPY index over three years (financial);� share price growth relative to the SAPY index over three years (financial); and� average personal score over three years (non-financial).

The fair value of the share plan, is determined by reference to the fair value of the equity instruments.

Co-investment plan (“CIPS”)Executives were offered matched shares in the Group, at no cost to the recipient, that vest over a period of three to five years,provided that the executive remained in the employment of the Company or a company in the Group for the duration of theperiod. No performance vesting conditions were set.

The weighted average remaining contractual life of the CIPS and FSP are two years. The shares issued for the forfeitable shareplan and co-investment plan carry the right to participate in the distributions. The number of shares granted is calculated inaccordance with the performance-based formula approved by the remuneration committee.

The valuation of the CIPS and FSP is calculated based on the following:� the probability that it would vest based on the above conditions; and� the market price of the share on grant date.

The fair value of the CIPS and FSP granted was valued using a binomial pricing model. The expected vesting period used inthe model has been adjusted based on managements' best estimate for the effects of exercise restrictions and behaviouralconsiderations.

The valuation was determined based on the following inputs:

Type Expected vesting % Dividend yield% Vesting period (years)

FSP 1 60 7.85 3FSP 2 60 7.97 3FSP 3 60 7.81 3FSP 4 60 7.75 3CIPS 1 100 N/A 3 - 5CIPS 2 100 N/A 3 - 5CIPS 3 100 N/A 3 - 5CIPS 4 100 N/A 3 - 5CIPS 5 100 N/A 3 - 5CIPS 6 100 N/A 3 - 5



35. Share based payments ›› (continued)The following payment arrangements were in existence during the current year:

Exercise price Fair value at grant dateType Number Grant date Expiry date (R) (R)

FSP 2 1 389 050 19 June 2015 18 June 2018 - 4.67FSP 3 1 521 561 17 June 2016 16 June 2019 - 4.91FSP 4 1 581 575 15 June 2017 14 June 2020 - 5.56CIPS 2 163 677# 22 December 2014 22 December 2017 - 4.71 163 677 22 December 2014 22 December 2018 - 4.71 163 677 22 December 2014 22 December 2019 - 4.71CIPS 6 25 759 20 June 2017 20 June 2020 - 5.60

25 759 20 June 2017 20 June 2021 - 5.6025 759 20 June 2017 20 June 2022 - 5.60

5 060 494

# TR Mackey had not exercised his option in respect of the 163 677 shares that vested at the time when the Group enteredinto a closed period. These shares are therefore not reflected in the co-investment plan balance at 31 December 2017.

FSP CIPSMovement in shares during the year 2017 shares shares

Balance at beginning of year 4 918 137 577 002Granted during the year 1 809 966 107 710Forfeited during the year (761 343) (109 887)Vested during the year (1 474 573) (170 195)Balance at end of year 4 492 187 404 630

Movement in shares during the year 2016

Balance at beginning of year 3 211 163 577 002Granted during the year 1 765 400 -Forfeited during the year (58 426) -Balance at end of year 4 918 137 577 002

Movements in units 2017

Valuation price Year-end valuation basedper share *Fair value on time elapsed

Plan Shares R R000 R000

FSP 4 492 187 4.82 21 661 6 325CIPS 404 630 4.88 1 975 1 107

4 896 817 23 636 7 432

Movements in units 2016

FSP 4 918 137 4.91 24 148 6 182CIPS 577 002 4.71 2 718 1 383

5 495 139 26 866 7 565

* Restated to reflect forfeited shares.



36. Directors' emolumentsShort-term benefits paid to directors:

Consolidated 2017 R000 Director fees Basic salary Bonus Pension Other Total

contribution benefitsExecutive: AM Basson - 1 618 1 632 291 4 3 545TR Mackey - 2 154 3 143 340 2 5 639

Non-executive directors:RJ Biesman-Simons 759 - - - - 759A Chowan * 270 - - - - 270GP Dingaan 444 - - - - 444KJ Forbes 556 - - - - 556EM Hendricks 396 - - - - 396J Molobela 634 - - - - 634MA Moloto 678 - - - - 678E S Seedat 488 - - - - 488 4 225 3 772 4 775 631 6 13 409

* Appointed 13 April 2017

Consolidated 2016 R000 Director fees Basic salary Bonus Pension Other Total

contribution benefitsExecutive: AM Basson - 1 610 1 635 187 5 3 437TR Mackey - 2 133 3 221 214 50 5 618

Non-executive directors:RJ Biesman-Simons 583 - - - - 583GP Dingaan 313 - - - - 313KJ Forbes 410 - - - - 410EM Hendricks 398 - - - - 398J Molobela 444 - - - - 444MA Moloto 365 - - - - 365E S Seedat 332 - - - - 332 2 845 3 743 4 856 401 55 11 900



36. Directors' emoluments ›› (continued)

Share-based payments to directors:

Consolidated Consolidated2017 2016

Award Share options: Number of shares Number of shares

AM Basson Forfeitable Shares Opening number of shares 1 328 485 892 420New number of share awards 1, 2 407 610 436 065Vested shares 2 (436 534) -Forfeited shares 2 (17 461) -Closing number of shares 1 282 100 1 328 485

AM Basson Co-investment Shares Opening number of shares - -New number of share awards 1, 4 77 276 -Closing number of shares 77 276 -

TR Mackey Forfeitable Shares Opening number of shares 2 345 291 1 585 811New number of share awards 1, 2 709 920 759 480Vested shares 2 (776 061) -Forfeited shares 2 (31 042) -Closing number of shares 2 248 108 2 345 291

TR Mackey Co-investment Shares Opening number of shares 491 031 491 031Shares vested 3 (163 677) -Closing number of shares 327 354 491 031

Total share expense R000 R000 AM Basson Forfeitable Shares 2 579 968TR Mackey Forfeitable Shares 4 561 1 713AM Basson Co-investment Shares 60 -TR Mackey Co-investment Shares 597 604

7 797 3 285

1. Strike price is Rnil.

2. Forfeitable share options: The 2014 share issuance was granted on 20 June 2014 and has vested on 19 June 2017. The 2015 share issuance was granted on 19 June 2015 and will vest on 18 June 2018. The 2016 share issuance was granted on 17 June 2016 and will vest on 16 June 2019. The 2017 share issuance was granted on 15 June 2017 and will vest on 14 June 2020. These shares are subject to vesting conditions.

3. Co-investment share options: The 2014 share issuance was granted on 22 December 2014 and will vest one-third each on22 December 2017, 22 December 2018 and 22 December 2019. The vested shares were not accepted by TR Mackey beforethe Group entered into a closed period.

4. Co-investment share options: The 2017 share issuance was granted on 20 June 2017 and will vest one-third on 20 June2020, 20 June 2021 and 20 June 2022.




37. Capital commitmentsTotal capital commitments 2 619 510 407 773 - -

The Group has the ability to fund the commitments from its available cash and debt facilities as detailed in note 16.

38. Events after the reporting periodThe Company has declared distributions of 22.54 cents on 27 February 2017. The directors are not aware of other significantevents between the end of the financial year under review and the date of signature of these financial statements.

39. Going concernThe directors are of the opinion that the Group and Company have adequate resources to continue in operation for the foreseeablefuture. The financial statements have accordingly been prepared on the going concern basis.

40.Investments in joint operationsDetails of the Group's and Company's material joint arrangements at the end of the reporting period are as follows:

Name of the Principal activity Place of incorporation Portion of ownership Distributionjoint operation and principal place of

business2017 2016 2017 2016

% % R000 R000

Consolidated:Umlazi Mega City Property entity Durban, KwaZulu Natal, 75% 75% 48 459 31 294

earning net rental South Africaincome

50 Mangosuthu Property entity Durban, KwaZulu Natal, 75% 75% 3 568 -Highway 1 earning net rental South Africa

income

Pinecrest Shopping Property entity Durban, KwaZulu Natal, 0% 50% 21 946 29 888Centre 2 earning net rental South Africa

income

Stellenbosch Square Property entity Stellenbosch, Western 50% 50% 7 048 6 099earning net rental Cape, South Africaincome

1. 25% of 50 Mangosuthu Highway was disposed to an external party in May 2016.2. 50% of Pinecrest Shopping Centre was disposed to an external party in March 2017.

All joint arrangements are strategic to the Group's activities.



Cnr Isotope & Bridge Streets, Belville, Western Cape

40.Investments in joint operations ›› (continued)

The reconciliation of the below summarised financial is based on the joint arrangement in full and not the Company's ownershipthereof.

Umlazi Mega 50 Mangosuthu Pinecrest Shopping Stellenbosch City Highway Centre Square

2017 2016 2017 2016 2017 2016 2017 2016R000 R000 R000 R000 R000 R000 R000 R000

Non-current assets 899 956 855 614 54 488 50 266 - 812 591 200 251 173 722Current assets 32 663 29 403 4 337 2 695 - 13 634 10 588 11 840Total assets 932 619 885 017 58 825 52 961 - 826 225 210 839 185 562

Non-current liabilities 266 738 248 821 46 800 46 800 - 18 145 132 523 132 207Current liabilities 303 204 264 348 2 076 1 644 - 192 755 7 185 9 050Total liabilities 569 942 513 169 48 876 48 444 - 210 900 139 708 141 257

Revenue 116 577 89 129 7 216 5 166 8 645 91 394 23 479 21 355Profit and loss fromjoint operations 55 441 224 185 10 190 4 517 10 586 162 674 40 921 48 185




41.Investments in joint venturesSummarised information:The joint ventures are accounted for using the equity method in these consolidated financial statements. The principal place of businessis Lusaka, Zambia.

The fair value of the identifiable assets and liabilities and the revenue and profit or loss are shown below. This is representative of100% of the respective entities and not the Company's ownership thereof.

Ancona Mauritius Graduare Mauritius Premier LM&C Limited Limited Mauritius Limited Total Total

2017 2016 2017 2016 2017 2016 2017 2016R000 R000 R000 R000 R000 R000 R000 R000

Non-current assets 237 848 261 168 1 159 606 1 081 838 351 824 391 562 1 749 278 1 734 568Current assets - - 161 924 120 270 41 698 3 882 203 622 124 152Total assets 237 848 261 168 1 321 530 1 202 108 393 522 395 444 1 952 900 1 858 720

Non-current liabilities 37 186 51 716 75 944 154 426 1 804 - 114 934 206 142Current liabilities 6 844 5 316 98 646 48 482 38 410 - 143 900 53 798Total liabilities 44 030 57 032 174 590 202 908 40 214 - 258 834 259 940

Revenue 21 147 24 752 121 933 119 440 43 411 48 463 186 491 192 655Profit and loss fromjoint ventures 10 700 (3 009) 187 003 137 589 44 963 24 313 242 666 158 893

Reconciliation of the above summarised financial information to the carrying amount of the interest in the joint ventures recognisedin the consolidated financial statements.

Net assets of the jointventures 193 818 204 136 1 146 940 999 200 353 308 395 444 1 694 066 1 598 780Proportion of the Group's ownership interest in the jointventures 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0%Carrying amount of theGroup's interest in theJoint ventures 96 909 102 068 573 470 499 600 176 654 197 722 847 033 799 389

In 2015, the joint venture companies were acquired with the following guarantees:1.) Two year net income guarantee linked to the joint ventures' net income, excluding interest.2.) Four year purchase price guarantee linked to the joint ventures' yield.3.) Tax indemnity

During the current year, the group acquired ownership in additional developments in Graduare Mauritius Limited under the followingguarantee.1.) Phase 3A: two year net income guarantee linked to the joint ventures net income, excluding interest and taxation.2.) Phase 3B: two year net income guarantee linked to the joint ventures net income, excluding interest.

During the year there was a shortfall in the income linked guarantee, resulting in the income guarantee receivable of R5 465 461 (2016:R7 871 467) recognised through profit and loss. This guarantee is not included in the investment in the joint ventures. This has beenrecognised as other income in the statement of comprehensive income.


There have been no changes in the direct or indirect beneficial interest of the directors between the end of the financial year under reviewand the date of signature of these financial statements.

SHAREHOLDER INFORMATION:Number of % of total

Shareholder Type shareholdings shareholdings Shares held % Holding

Non-Public Shareholders 10 0.15 599 148 513 23.68 Directors and associates of the company (direct holding) 6 0.09 1 777 546 0.07 Directors and associates of the company (indirect holding) 2 0.03 1 612 753 0.06Holders holding more than 10% Government Employees Pension Fund 1 0.02 589 886 028 23.32Share Schemes SA Corporate Real Estate Fund Managers Proprietary Limited 1 0.01 5 872 186 0.23

Public Shareholders 6 593 99.85 1 931 540 824 76.32

Total 6 603 100.00 2 530 689 337 100.00

Investment Manager Shareholders (>3%) Shares Held % Holding Public Investment Corporation 617 410 511 24.40 Prudential Investment Managers 269 664 505 10.66 Stanlib Asset Management 209 077 294 8.26 Old Mutual Investment Group 205 261 573 8.11 Investec Asset Management 107 462 681 4.25Total 1 408 876 564 55.68

Beneficial Shareholders (>3%) Shares Held % Holding Government Employees Pension Fund 589 886 028 23.31 Old Mutual Group 208 068 765 8.22 Prudential 182 919 383 7.23 Stanlib 151 506 628 5.99 Alexander Forbes Investments 87 318 191 3.45 State Street (Custodian) 87 176 387 3.44 MMI 82 807 338 3.27Total 1 389 682 720 54.91

DIRECTORATE:The table below sets out the directors' holdings in shares:

2017 2016Director Holding Type of Holding Holding Type of Holding

Shares Shares000 000

J Molobela 51 Direct beneficial 51 Direct beneficialRJ Biesman-Simons 72 Indirect beneficial 72 Indirect beneficialAM Basson 395 Indirect beneficial 155 Direct beneficial AM Basson 1 359 Direct beneficial (FSP1 & CIPS2) 1 328 Indirect beneficial (FSP1)KJ Forbes 300 Direct beneficial 250 Direct beneficialTR Mackey 2 739 Indirect beneficial (FSP1 & CIPS2) 2 836 Indirect beneficial (FSP1 & CIPS2)TR Mackey 945 Direct beneficial 696 Direct beneficialTR Mackey 1 541 Indirect beneficial 1 364 Indirect beneficialMA Moloto 24 Direct beneficial 11 Direct beneficialES Seedat 62 Direct beneficial 42 Direct beneficial

7 488 6 8051 FSP = Forfeitable Share Plan2 CIPS = Co-investment Plan

APPENDIX A: STATUTORY INFORMATION


SPECIAL RESOLUTIONS:It was resolved that the basis of payment of remuneration to the non-executive directors in respect of the financial year ending 31December 2017 be approved.

It was resolved that the Company is authorised to generally provide any financial assistance, for the purpose of or in connection withthe acquisition of the shares of the Company or of a related company, in terms of sections 44 and 45 of the Companies Act, to anydirector, prescribed officer or senior employee of the Company pursuant to and in connection with the Forfeitable Share IncentiveScheme and participants thereunder.

It was resolved that the directors of the Company may authorise the Company to provide direct or indirect financial assistance, ascontemplated in section 45 of the Companies Act, by way of loans, guarantees, the provision of security or otherwise, to any of itspresent or future subsidiaries for any purpose or in connection with any matter, such authority to endure for a period of not morethan two years.

It was resolved that the directors will be authorised to issue shares to shareholders to reinvest their distribution in accordance withthe Distribution Reinvestment Alternative.

It was resolved that the directors of the Company are authorised by way of general authority to acquire shares issued by the Companyand/or its subsidiaries upon such terms and conditions and in such amounts as the directors may from time to time decide, but subjectto the JSE Limited (“JSE”) Listings Requirements.

APPENDIX A: STATUTORY INFORMATION›› (continued)

Morning Glen Mall, Kelvin Dr & Bowling Avenue, Sandton, Gauteng


Sectoral and geographical profile:The regional and sectoral composition of the property portfolio is depicted in the following tables:

Geographical profileGauteng KwaZulu Natal Limpopo Western Cape Other Total

R000 R000 R000 R000 R000 R000

Rental area (m2) 970 067 409 405 12 670 73 661 71 260 1 537 063Revenue (R'000) 1 289 305 657 278 8 514 88 948 69 801 2 113 846

Sectoral profileSpecialised:

Specialised: AutoIndustrial Retail Commercial AFHCO Hospital dealerships Storage Total

R000 R000 R000 R000 R000 R000 R000 R000

Rental area (m2) 700 375 360 528 55 972 351 254 7 265 38 201 23 468 1 537 063Revenue (R'000) 561 443 932 048 113 442 437 652 15 447 43 957 9 855 2 113 844

Tenant profile:The tenants are classified in terms of the following grading:“A”: Large national tenants, large listed tenants, government and major franchisees; "Large national tenants" is defined as tenants occupying premises that have on average greater than 500m2 of GLA.“B”: National tenants, listed tenants, franchisees, medium to large professional firms; and "National tenants" is defined as tenants occupying premises that have on average greater than 1 000m2 of GLA in one region. "Medium professional firms" is defined as professional firms occupying premises that have on average between 500m2 and 2 000m2 of GLA. "Large professional firms" is defined as professional firms occupying premises that have on average greater than 2 000m2 of GLA.“C”: Other

Tenant profile:Grading % of occupied space

2017 2016

A 59.3 59.7B 27.1 28.7C 13.6 11.6

100.0 100.0

Vacancies, expiries and average rental income:

The vacancies are set out below:

The lease expiry profile and vacancies (as a % of GLA) are set out below:

TRADITIONAL PORTFOLIO:

Property Vacancy (%) Expiries (%) type 2016 2017 Monthly 2018 2019 2020 2021 Thereafter

Industrial 1.1 1.5 0.9 26.9 17.4 11.0 17.8 24.5 Retail 4.5 3.1 6.9 16.1 13.6 17.5 11.1 31.7 Commercial 8.8 6.4 5.7 17.9 16.6 22.2 24.9 6.3

Total 2.7 2.3 3.0 23.1 16.2 13.7 16.3 25.4

APPENDIX B: PROPERTY PORTFOLIO REVIEW


AFHCO PORTFOLIO:

Property Vacancy (%) Expiries (%)type 2016 2017 Monthly 2018 2019 2020 2021 Thereafter

Residential 10.4 7.3 45.9 46.7 0.1 - - - Retail/Commercial 3.4 2.1 11.1 17.8 11.4 25.1 10.6 21.9

Total 8.7 7.0 35.8 39.8 2.9 6.3 2.6 5.6

The lease expiry profile and vacancies (as a % of rental income) are set out below:

TRADITIONAL PORTFOLIO:


Industrial 0.9 1.0 4.2 30.0 12.1 9.8 22.1 20.8 Retail 3.3 3.0 7.6 17.6 16.0 20.2 11.5 24.1 Commercial 5.4 6.0 4.0 19.6 20.4 23.4 20.8 5.8

Total 2.5 2.6 5.8 22.9 14.8 16.2 16.7 21.0

Weighted average rental per square metre by GLA calculated on the total of basic rent, basic operating cost and rates:

2017 2016

Property type R/m2 R/m2

Industrial 60.92 61.26Retail 156.65 146.97Commercial 117.77 133.92Storage 81.95 -AFHCO Retail/ Commercial 98.63 111.11AFHCO Residential 102.04 110.70

Total 95.49 97.23

Weighted average rental escalation profile:

2017 2016

Property type % %

Industrial 8.0 8.0Retail 7.6 7.7Commercial 7.9 8.1AFHCO Retail/ Commercial 9.0 9.0AFHCO Residential - 8.5

Total 7.9 8.1

Due to the short term nature of the storage leases, there is no weighted average rental escalations.

The annualised property yield is 8.6% (2016: 8.9%)

APPENDIX B: PROPERTY PORTFOLIO REVIEW›› (continued)

AFHCO PORTFOLIO:


Retail/Commercial 3.3 1.7 9.5 14.2 18.4 25.70 12.8 17.7 Residential 11.1 9.2 43.4 47.3 0.1 - - -

Total 8.7 7.4

The expiry profile of the storage sector is not disclosed due to the short term nature of the leases.


Stellenbosch Square (g) (i) Cnr R44 & Webersvallei Road Stellenbosch 34 753 5 807 129 100 000

Property address Location Site area (m2)Rentable

area (m2)

Weightedaverage rental

per m2 (R)ValueR000

Retail - Western Cape

Property company/name Key

Retail - Other

Rhodesdene Centre (f) (j) Cnr Caters Way & Selous Avenue Kimberley 8 584 2 968 112 52 000


area (m2)


per m2 (R)ValueR000Property company/name Key

APPENDIX C: PROPERTY PORTFOLIO

Retail - Gauteng

Atterbury Décor (j) Cnr Atterbury Road & Nieuwhout Street Pretoria 14 784 5 827 128 86 786Cambridge Crossing (c) Cnr Witkoppen Road & Stone Haven Street, Paulshof Sandton 12 478 4 715 167 144 000Celtis Ridge Shopping Centre, Centurion (g) Cnr Main Arterial Ruimte Road & Seedcracker Road, Celtisdale 21 231 7 223 160 126 000

HeuwilsigCoachman’s Crossing (f) Cnr Peter Place & Karen Street, Bryanston West Sandton 15 860 6 377 173 134 000Comaro Crossing (c) Cnr Comaro Street & Boundary Lane Oakdene 24 067 13 712 136 262 000Cullinan Jewell Shopping Centre (f) (j) Cnr Main Road & Oak Avenue Cullinan 10 753 3 499 103 39 200East Point (c) Cnr Northrand & Rietfontein Roads, Jansen Park Boksburg 98 202 45 690 171 1 210 000Forest Road Design & Décor Centre (c) Cnr Forest Drive & Sunset Avenue, Pineslopes Fourways 21 933 11 460 211 136 000Kempton Shoprite Checkers (c) Cnr Langenhoven Avenue & Voortrekker Road Kempton Park 49 124 10 224 70 95 000Midway Mews (g) Cnr Harry Galaun Drive & Seventh Street Halfway Gardens 28 198 6 756 162 160 000Montana Crossing (g) Cnr Zambesi Drive & Dr Swanepoel Road Montana 69 733 23 229 113 309 000Northpark Mall (c) 526 Rachel De Beer Street Pretoria North 20 415 12 152 112 92 000Town Square Shopping Centre (c) Cnr Hendrik Potgieter Road & Albert Street Waltevredenpark 25 027 5 655 190 146 000Willow Way Shopping Centre (f) Cnr Lynwood Road & Power Avenue Lynwood 26 482 7 957 135 115 800Morning Glen Mall (c) Kelvin Dr & Bowling Avenue Sandton 21 499 17 871 156 369 00051 Pritchard Street (c) 51 Pritchard Street Johannesburg 4 974 15 030 107 190 000African City Eloff Street Johannesburg 10 605 3 387 173 70 000


area (m2)


per m2 (R)ValueR000Property company/name Key

50 Griffiths Mxenge Highway (a) (g) 50 Griffiths Mxenge Highway, Umlazi Umlazi 4 867 3 237 127 41 100(h)

Bluff Shopping Centre (e) Cnr Grays Inn & Tara Roads Bluff 48 637 24 551 150 463 000Davenport Square Shopping Centre (g) Cnr Clark & Brand Roads Glenwood 18 544 8 520 194 195 000Hayfields Mall (f) Cnr Blackburrow Road & Cleland Roads, Hayfields Pietermaritzburg 34 683 11 942 188 258 000Musgrave Centre (c) 115 Musgrave Road Musgrave 25 892 39 249 222 1 096 000Pine Walk Centre (f) 22 Kings Road Pinetown 13 889 8 513 147 132 000Springfield Value Centre (c) Cnr Umgeni & Electron Roads Springfield 52 020 20 317 174 462 000Umlazi Mega City (a) (g) 50 Griffiths Mxenge Highway Umlazi 163 300 34 660 163 675 000

(h)


area (m2)


per m2 (R)ValueR000

Retail - Kwazulu Natal


11 Enterprise Close Linbro Business Park Linbro Business Park 4 414 1 913 - 15 40011 Wankel Street (f) 11 Wankel Street Jet Park 16 905 6 729 - 38 300111 Mimets Road (g) 111 Mimets Road Denver 33 881 18 051 - 114 000112 Yaldwyn Road (e) 112 Yaldwyn Road Jet Park 55 675 30 299 - 330 000120 Loper Avenue (c) 120 Loper Avenue Aeroport Industrial Estate 10 111 3 575 - 24 000137 Kuschke Street 137 Kuschke Street Meadowdale 2 820 1 541 - 11 100141 Hertz Close (c) 141 Hertz Close Meadowdale 6 694 3 616 - 23 800144 Kuschke Street 144 Kuschke Street Meadowdale 2 536 1 488 - 7 900


area (m2)


per m2 (R)ValueR000

Industrial - Gauteng



APPENDIX C: PROPERTY PORTFOLIO›› (continued)

145 Kuschke Street 145 Kuschke Street Meadowdale 2 262 1 518 - 8 600148 Fleming Street 148 Fleming Street Meadowdale 2 652 1 417 - 9 300149 Fleming Street 149 Fleming Street Meadowdale 3 382 2 090 - 12 20015 Patrick Road 15 Patrick Road Jet Park 8 140 2 275 - 17 000150 Fleming Street 150 Fleming Street Meadowdale 3 180 1 835 - 11 10016 Friesland Crescent (UPM Raflatac), 16 Friesland Street Rembrandt Park 4 304 1 622 - 12 800Longmeadow18 Covora Street (c) 18 Covora Street Jet Park 10 498 4 638 - 28 00019 Brunton Circle (Webco Tools), 19 Brunton Circle, Founders View South Modderfontein 4 151 2 720 - 14 400Founders View2 Fobian Street (g) 2 Fobian Street Boksburg 12 047 5 258 - 34 3002 Webb Road 2 Webb Road Jet Park 6 009 1 859 - 10 80021 Pomona Road (j) 21 Pomona Road Pomona 20 229 4 585 - 18 25027 Jet Park Road (g) 27 Jet Park Road Jet Park 55 256 12 582 - 75 4003 Wankel Street (c) 3 Wankel Street Jet Park 7 391 3 952 - 24 20032 / 34 Yaldwyn Road (f) 32 / 34 Yaldwyn Road Jet Park 7 758 4 000 - 20 60033 Ontdekkers Road (f) 33 Ontdekkers Road Roodepoort 14 805 6 386 - 84 10037 Yaldwyn Road (c) 37 Yaldwyn Road Jet Park 59 759 39 738 - 281 00040 Electron Avenue (g) 40 Electron Avenue Isando 28 959 13 172 - 65 00041 Yaldwyn Road (c) 41 Yaldwyn Road Jet Park 12 654 6 249 - 56 7005 Yaldwyn Road (g) 5 Yaldwyn Road Jet Park 41 194 17 552 - 110 000530 Nicholson Road (f) 530 Nicholson Road Denver 31 009 24 880 - 64 00057 Sarel Baard Crescent 57 Sarel Baard Crescent Centurion 80 999 34 460 - 303 0007 Belgrade Avenue 7 Belgrade Avenue Aeroport Industrial Estate 3 525 1 535 - 9 2008 Director Drive (c) 8 Director Drive Aeroport Industrial Estate 6 948 3 750 - 21 10085 Newton Street (c) 85 Newton Street Meadowdale 5 600 3 178 - 21 60088 Loper Avenue (c) 88 Loper Avenue Aeroport Industrial Estate 10 953 7 711 - 53 00096 - 15th Road 96, 15th Road, Randjespark Midrand 44 682 10 443 - 78 800Beryl Street (e) (j) Beryl Street Jet Park 130 418 27 681 - 394 000Cnr Bismuth & Graniet Streets Cnr Bismuth & Graniet Streets Jet Park 4 005 1 800 - 9 100Cnr Fleming St & Koornhof Road Cnr Fleming St & Koornhof Road Meadowdale 5 471 2 914 - 16 800Cnr Koornhof Rd & Essex Street (f) Cnr Koornhof Rd & Essex Street Meadowdale 20 929 9 783 - 63 500Cnr Rudo Nel & Tudor Streets (c) Cnr Rudo Nel & Tudor Streets Jet Park 22 627 10 786 - 60 400Cnr Staal & Stephenson Road (g) Cnr Staal & Stephenson Road Pretoria 43 957 28 538 - 75 000Stondell Investments Proprietary Limited 684 Pretoria Main Road, Wynberg Wynberg 7 435 2 551 - 9 000Erf 1144 Bardene Ext 48, Bardene (g) 39 Viewpoint Road, Bartlett Boksburg 10 204 10 204 - 20 500


area (m2)


per m2 (R)ValueR000

Industrial - Gauteng ›› (continued)


1 Baltex Road 1 Baltex Road Isipingo 53 080 9 964 - 95 00010 Yarborough Road 10 Yarborough Road Pietermaritzburg 38 712 3 400 - 39 8001 Irvine Bell Drive (g) 1 Irvine Bell Drive Empangeni 12 788 2 736 - 15 1001 / 5 Stockville Road (f) (j) 1 / 5 Stockville Road Westmead 20 033 8 078 - 50 00011 Coconut Grove (j) 11 Coconut Grove Shakashead 1 254 453 - 2 400121 Intersite Avenue (a) (c) 121 Intersite Avenue Durban 7 579 2 734 - 21 300121 Malacca Road (c) 121 Malacca Road Red Hill 7 565 3 751 - 21 00014 / 24 Mahoganyfield Way (c) 14 / 24 Mahoganyfield Way Springfield Park 7 263 4 986 - 27 000147 / 149 Old Main Road (f) 147 / 149 Old Main Road Pinetown 12 950 6 186 - 65 600153 Old Main Road (c) 153 Old Main Road Pinetown 9 044 3 408 - 32 400155 / 157 Old Main Road (g) 155 / 157 Old Main Road Pinetown 14 576 5 858 - 59 80017 Young Road 17 Young Road Pinetown 8 942 3 970 - 18 2002 Beechfield Crescent (f) 2 Beechfield Crescent, Springfield Park Durban 4 636 3 815 - 23 70020 Kyalami Road 20 Kyalami Road Pinetown 6 614 3 052 - 16 200


area (m2)


per m2 (R)ValueR000

Industrial - KwaZulu Natal



24 Westmead Road (g) 24 Westmead Road Westmead 9 952 3 542 - 19 600264 Aberdare Drive 264 Aberdare Drive Phoenix 10 000 3 648 - 16 00028 Goodwood Road (f) 28 Goodwood Road Mahogany Ridge 21 409 7 848 - 48 4002A, B & C Kuba Avenue (f) 2A, B & C Kuba Avenue Riverhorse Valley 9 979 4 463 - 39 50030 / 34 Hillclimb Road (f) 30 / 34 Hillclimb Road Mahogany Ridge 15 966 10 132 - 42 50033 / 37 Aloefield Crescent (f) 33 / 37 Aloefield Crescent Springfield Park 6 804 5 672 - 34 80033 Surprise Road (g) 33 Surprise Road Pinetown 15 894 5 869 - 28 0005 Westgate Place (c) 5 Westgate Place Westmead 27 828 4 633 - 45 2006 Cedarfield Close (j) 6 Cedarfield Close Springfield Park 17 137 10 063 - 57 0006 / 8 Mahogany Road (g) 6 / 8 Mahogany Road Mahogany Ridge 15 173 7 324 - 54 10089 Flanders Drive (c) 89 Flanders Drive Mount Edgecombe 10 479 8 473 - 53 8009 Twilight Road 9 Twilight Road Umhlanga 2 106 823 - 14 8009 / 15 Lanner Road (c) (j) 9 / 15 Lanner Road New Germany 8 260 6 960 - 35 000Blue Heron Investments Proprietary (a) (g) Cnr Shadwell & Jenkyn Roads, Maydon Wharf Durban 15 703 14 587 - 56 600LimitedCnr Gillitts & Young Roads (c) Cnr Gillitts & Young Roads Pinetown 12 354 4 616 - 28 300Dune Lark Investments Proprietary Limited (a) (g) 34 Shadwell Road, Maydon Wharf Durban 16 779 13 091 - 46 800Erf 84 / 85 / 86 Shakas Head Proprietary (f) 15 Coconut Grove Shakashead 24 537 10 705 - 43 800LimitedGrey Heron Investments Proprietary (a) (g) 137 Johnston Road, Maydon Wharf Durban 7 894 7 393 - 28 000LimitedRock Kestrel Investments Proprietary (a) Shadwell Road, Maydon Wharf Durban 14 408 397 - 15 800LimitedSuffert Street (c) Suffert Street Pinetown 33 653 14 055 - 69 400Whirlprops 25 P Proprietary Limited (a) (e) 59 Intersite Avenue, Umgeni Business Park Durban 21 753 16 702 - 104 300Wood Ibis Investments Proprietary Limited (a) Methven Road, Maydon Wharf Durban 19 150 18 060 - 72 600


area (m2)


per m2 (R)ValueR000

Industrial - KwaZulu Natal ›› (continued)


1 Marconi Street (c) 1 Marconi Street Montague Gardens 12 141 3 970 - 35 10010 Industrial Avenue (c) 10 Industrial Avenue Paarl 24 875 3 259 - 51 6009 Milner Road (c) 9 Milner Road, Paarden Eiland Paarden Eiland 31 244 16 169 - 108 000Cnr Bridge Street and Molecule Road Cnr Bridge Street and Molecule Road Bellville 29 083 8 558 - 50 000Cnr Giel Basson Drive & Nathan Mallach (c) Cnr Giel Basson Drive & Nathan Mallach Road Goodwood 10 430 5 902 - 88 000RoadCnr Isotope & Bridge Streets (c) Cnr Isotope & Bridge Streets Bellville 10 756 4 573 - 26 600Tygerberg Business Park (c) Trans Karoo Street, Parow Industria Parow 49 030 17 408 - 153 000


area (m2)


per m2 (R)ValueR000

Industrial - Western Cape


The Eveready Building (f) Eveready Road, Struandale Port Elizabeth 56 412 56 412 - 155 000


area (m2)


per m2 (R)ValueR000

Industrial - Other


21 Fricker Road (g) 21 Fricker Road, Illovo Sandton 3 718 2 800 - 50 900252 Montrose Ave 252 Montrose Ave Northriding 12 237 - - 34 100Cnr Handel & Crownwood Roads (g) Cnr Handel & Crownwood Roads Ormonde 36 073 6 131 - 51 400Cnr Old Pretoria & Alexandra Roads (f) Cnr Old Pretoria & Alexandra Roads Midrand 5 857 - - 21 000Lebombo Road (j) Lebombo Road, Garsfontein -Ashlea Gardens Pretoria 3 966 3 340 - 27 100Green Park Corner (c) Cnr West Road South & Lower Road, Morningside Sandton 23 636 15 800 - 391 300


area (m2)


per m2 (R)ValueR000

Offices and Other - Gauteng




22 Voortrekker Street (f) (j) 22 Voortrekker Street Vredenberg 9 507 3 067 - 78 50031 Allen Drive (f) 31 Allen Drive Bellville 2 969 3 255 - 29 300


area (m2)


per m2 (R)ValueR000

Offices and Other - Western Cape


28 Durham Road (f) (j) 28 Durham Road Mthatha 4 342 4 198 - 86 50034 Mangold Street 34 Mangold Street Port Elizabeth 1 606 968 - 7 400Nobel Street Office Park (f) Noble Street, Brandwag Bloemfontein 7 808 6 713 - 80 900


area (m2)


per m2 (R)ValueR000

Offices and Other - Other



1 Holwood Park (c) La Lucia Ridge Office Estate Umhlanga Ridge 16 736 7 504 - 113 20012 Sookhai Place (c) 12 Sookhai Place Derby Downs Office Park Westville 5 806 2 513 - 24 0003 The Terrace (c) 3 The Terrace, Westway Westville 3 017 2 278 - 25 200102 Essenwood Road (f) 102 Essenwood Road Durban 2 718 4 670 - 57 300


area (m2)


per m2 (R)ValueR000

Offices and Other - KwaZulu Natal


Blue Valley 55 Rooihuiskraai Road, Blue Valley Mall, Centurion Centurion 33 002 1 170 - 5 000Bryanston 82 Homestead Avenue Bryanston Bryanston 8 574 1 609 - 10 900Fourways Stone River Boulevard Midrand 80 936 2 408 - 6 800Hillfox Rhinoceros Road Hillfox Roodepoort 62 141 698 - 1 680Parkview Netcare Street and the M30 Moreleta Park Pretoria 64 497 2 025 - 8 450Pomona 57 Maple Road Pomona AH Kempton Park 13 691 3 938 - 900Princess Crossing President Street Roodepoort 28 346 2 014 - 6 100Randburg 242 Beyers Naude Drive Blackheath Randburg 1 983 113 - 1 100Rivonia 17 Wessels Road Rivonia 17 839 2 565 - 17 350Rosebank Rosebank Road Rosebank 968 968 - 1 950Sandton Ninth Avenue Sandton 529 529 - 250Stoneridge 55 Rooihuiskraal Raod, Blue Valley Mall Centurion 105 078 3 454 - 12 550Wandereres 55 Rooihuiskraal Raod, Blue Valley Mall Centurion 934 934 - 3 600Zambezi 55 Rooihuiskraal Raod, Blue Valley Mall Centurion 1 046 1 046 - 900SAC Storage Proprietary Limited Erand Agricultural Holdings Ext 1, 391 9th Street Midrand 25 697 - - 14 188


area (m2)


per m2 (R)ValueR000

Storage - Gauteng


Lykoi Proprietary Limited 1 Link Road, Bothasig Milnerton 11 327 - - 24 350


area (m2)


per m2 (R)ValueR000

Storage - Western Cape


120 End Street (c) 120 End Street and 55 Davies Street Doornfontein 8 302 33 439 - 322 00050 Stiemens Street 50 Stiemens Street, Braamfontein Braamfontein 1 427 1 427 - 11 700Afhco Corner 64 Siemert Road New Doornfontein 4 136 4 740 - 25 500Anchor Towers (g) 2 Plein Street (Cnr Harrison Street) Johannesburg 4 362 2 496 - 22 000Bridgeport (f) 98 De Korte, Street, Braamfontein Braamfontein 3 714 3 715 - 21 000Cavendish House (c) 183 Rahima Moosa Street Johannesburg 993 5 604 - 79 200Legae (c) 217 Lilian Ngoyi Street (Formerly Bree Street) Johannesburg 1 242 7 199 - 90 200Hayani House 112 End Street and 5 Rockey Street Doornfontein 4 729 5 133 - 75 300


area (m2)


per m2 (R)ValueR000

Residential, retail and commercial - Other Inner-City - Gauteng



Frank & Hirsch (c) 352 Lilian Ngoyi Street Johannesburg 2 680 10 206 - 116 600Hoeksbury 3 Hoek Street Johannesburg 686 613 - 8 200Impilo Place (g) 141 Rahima Moosa Street (Formerly Jeppe Street) Johannesburg 990 3 729 - 54 700Khan Corner 104 & 106 End Street Doornfontein 933 3 522 - 37 000Cambalala House 30 Eloff Street Johannesburg 1 982 5 354 - 55 200Maxwell Hall (g) 96 Smal Street Johannesburg 6 864 6 938 - 68 700Moray House (g) 197 Rahima Moosa Street Johannesburg 991 4 507 - 86 000Multi Glass 4-8 Mooi Street Johannesburg 3 968 1 655 - 4 350Newgate (g) 180 Lilian Ngoyi Street Newtown 7 148 12 716 - 154 300Normandie Court (g) 96 Kerk Street Johannesburg 5 440 3 373 - 46 300Sidelsky 56, 58 & 60 Davies Street Doornfontein 2 344 - - 35 200Small Street Mall 195 Rahima Moosa Street Johannesburg 574 536 - 25 800Station View 62 Davies Street Doornfontein 886 - - 30 000Stuttafords House (g) 60 Pritchard Street Johannesburg 1 485 7 546 - 101 800Atkinson House (d) 28 Albert Street Johannesburg 1 984 8 795 - 107 800Lustre House 114 Goud Street Johannesburg 992 4 252 - 47 700Nukerk 73 Nugget Street Johannesburg 1 983 8 533 - 87 000Ilanga House (g) 131 Pritchard Street Johannesburg 1 982 7 308 - 87 200Sambro House (g) 25 Kruis Street Johannesburg 1 985 4 743 - 57 000129 Jeppe Street Cnr 68 Simmonds & 129 Rahima Moosa Street Johannesburg 496 944 - 9 800Chapel Court (g) Cnr Wanderers & 39 Plein Street Johannesburg 995 2 331 - 48 000CityMainII (g) Cnr Lilian Ngoyi & Von Weilligh Street Johannesburg 497 354 - 15 600Danina 19 Wanderers Street Johannesburg 249 173 - 8 600Elmol House (g) Cnr Lilian Ngoyi & Delvers Street Johannesburg 248 944 - 17 700Georgetown 36 Railway Street Germiston 1 129 878 - 9 000Johannesburg Shopping Centre 229 Rahima Moosa Street Johannesburg 1 984 2 398 - 48 000Melbourne Court (g) 237 Lilian Ngoyi Street Johannesburg 249 565 - 27 400Queens Court (g) 247 Lilian Ngoyi Street Johannesburg 498 2 395 - 38 000Springbok Hotel (g) Cnr Lilian Ngoyi & Joubert Street Johannesburg 1 495 1 402 - 31 000Stanop House 72 Siemert Road New Doornfontein 1 018 6 456 - 13 700The Mall (j) Cnr DF Malan & Paul Sauer Street Vanderbijlpark 3 755 2 838 - 13 600Greatermans (c) 220 Commissioner Street Johannesburg 3 470 11 720 - 120 500Beechwood Cnr Raven and Nightingale Roads Randfontein 2 610 2 610 - 18 850Rosewood Cnr Raven and Nightingale Roads Randfontein 2 016 2 016 - 11 100Jeppe Post Office Rahima Moosa Street Johannesburg 9 600 14 568 - 139 500Platinum Place (d) 40 Van Beek New Doornfontein 7 084 9 081 - 90 30081 Rissk Street 81 Rissk Street Johannesburg 994 3 741 - 82 200Hartmann and Keppler 43 Sherwell Street Doornfontein 468 4 800 - 8 950Jabulani Mews (f) (j) 2345 Dikgathehong Street Soweto 7 380 7 359 - 73 00042-44 De Villiers Street (g) 42-44 De Villiers Street Johannesburg 992 1 821 - 21 000Andrea Close Cnr Club and General Hertzog Roads Peacehaven Vanderbijlpark 4 660 2 672 - 7 900Burgundy (c) Forrest Hill Centurion 23 451 7 986 - 75 780Calderwood Lifestyle Estate The Stewards, Benoni Benoni 46 154 20 029 - 165 300Indlovu Complex (c) 2670/2/3 Doberman Street, Commercia Ext 9, Midrand Midrand 10 549 5 058 - 35 600Komati Complex (c) 2670/2/3 Doberman Street, Commercia Ext 9, Midrand Midrand 7 380 2 248 - 16 000Lethabong Complex (c) 2670/2/3 Doberman Street, Commercia Ext 9, Midrand Midrand 8 256 3 372 - 24 000Minuet (c) 44 Mozart Lane, Sagewood Midrand 14 253 4 726 - 48 710Panama House (c) 200 Commissioner Street, City and Suburban Johannesburg 2 082 7 497 - 98 000South Hills Nephin Road Johannesburg 1 217 7 650 - 153 511Dennehof and Bloekomhof Cnr Club and General Hertzog Roads Peacehaven Vanderbijlpark 26 244 11 728 - 34 000Golf Park (c) Phillip Nel Park Pretoria 16 067 9 986 - 98 800Reef Acres 8 Myrtle Road, Krugersrus Springs 4 698 5 519 - 41 000Long Street Preccinct Long Street, Jeppestown Johannesburg 48 587 6 866 - 37 100Pink Houses and Rockey Retail Cnr Davies and Rocky Streets Doornfontein 943 - - 5 900Northgate Heights Phase 1a 243 Montrose Ave, Northgate Randburg 31 275 4 082 - 55 300


area (m2)


per m2 (R)ValueR000

Residential, retail and commercial - Other Inner-City - Gauteng ›› (continued)




Total 3 507 559 1 537 063 16 832 933

Investment property - at valuation 12 783 947Properties under development 3 160 250Properties classified as held for disposal 888 736Total 16 832 933

Keys:(a) Indicates leasehold properties with leases expiring between 2025 and 2049.(b) Before straight line rental adjustment(c) Indicates properties bonded with Mega Pool(d) Indicates properties bonded with Agense Francaise Developpement (AFD)(e) Indicates properties bonded with Omsfin(f) Indicates properties bonded to R2bn Syndicated loan(g) Indicates properties bonded to R1.5bn Syndicated loan(h) Indicates a 75% share in property(i) Indicates a 50% share in property(j) Indicates properties held for disposal

Due to the sensitivity of the weighted average rental per m2 in the industrial and commercial portfolios, the weighted average has been disclosed in Appendix B.

(b)


Tubatse Village (c) Steelport Ext 9 Township Limpopo 26 105 12 670 - 81 500


area (m2)


per m2 (R)ValueR000

Residential and other Inner-City - Limpopo


Scottsdene Scottsdene, Kraaifontein Cape Town 3 837 1 693 - 31 578


area (m2)


per m2 (R)ValueR000

Residential and other Inner-City - Western Cape


Bluff Shopping Centre Durban, Tara Road, KwaZulu Natal

audited annual financial 2017statements...the annual financial statements, the going concern basis...

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