VUKILE PROPERTY FUND LIMITED – Summarised audited results for the year ended 31 March 2018

SENS announcement for JSE listed company: VKE
                        

VKE 201805300003A
Summarised audited results for the year ended 31 March 2018

Vukile Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2002/027194/06)
JSE share code: VKE ISIN: ZAE000056370
NSX share code: VKN
(granted REIT status with the JSE)
(Vukile or the group or the company)

Summarised audited results for the year ended 31 March 2018

Highlights
– Dividend per share growth of 7.7% to 168.82 cents per share in line with guidance
– Southern Africa operating metrics remain solid in poor trading environment
– Like-for-like net income growth of 6.5%, vacancies reduced to 3.7% and positive reversions of 5.1%
– Prudent balance sheet with gearing ratio of 29.6% with term debt fully hedged
– Significant progress in Spanish strategy
– Concluded €260 million worth of acquisitions
– Recruited high-calibre local management team and created an operating platform

Commentary

1. Nature of operations
The group is a long-term investor in retail-focused property portfolios with strong contractual cash flows managed
for sustainability and capital appreciation.

2. Summary of group financial performance
The group’s direct property investments were valued at R19.1 billion at 31 March 2018, and are located in South Africa,
Namibia and Spain (March 2017: R13.6 billion). The Spanish properties were valued at R4.5 billion (€308 million)
at year-end.

Additionally, Vukile held the following listed investments at year-end:
– A 34.9% shareholding in an associate, Atlantic Leaf Properties Limited (Atlantic Leaf) with a carrying value of
R1.2 billion. The net asset value of Atlantic Leaf at its February 2018 year-end amounted to £204 million;
– A 31.4% shareholding in Fairvest Property Holdings Limited (Fairvest) valued at R595 million; and
– A 26.3% shareholding in Gemgrow Properties Limited (Gemgrow) (previously named Synergy Income Fund Limited)
valued at R790 million.

Ongoing improvements in financial and operating metrics
The dividend for the six months ended 31 March 2018 increased by 7.9% to 96.16625 cents per share. Dividends for the
full year rose by 7.7% to 168.8198 cents per share.

The group’s net profit available for distribution was R1.31 billion for the year ended 31 March 2018, representing an
increase of 17% (March 2017: R1.12 billion).

The proposed total dividend comprises:

Cents
Rm % per share
First 550.7 42.2 72.65350
Second(1) 754.7 57.8 96.16625
Total 1 305.4 100.0 168.81975
(1) Based on shares in issue at 31 March 2018.

2018 2017 %
Key financial measures March March change
Dividends per share (cents) 168.82 156.75 7.7
Earnings (Rm) 2 402 1 499 60.2
Net asset value per share (cents) 2 010 1 868 7.6
Loan to value ratio (%)(i) 32.9 29.2(iv)
Loan to value ratio net of cash (%)(ii) 28.2 22.6(iv)
Gearing ratio (%)(iii) 29.6 23.0
(i) Based on directors’ valuations of the group’s portfolio and the market value of equity investments at 31 March 2018.
(ii) Based on (i) above less cash (excluding cash held on deposit from tenants).
(iii) The gearing ratio is calculated by dividing total interest-bearing borrowings by total assets.
(iv) Prior year excludes the market value of equity investments as the Domestic Medium Term Note (DMTN) and bank covenants
had not been amended at that stage.

Share price and liquidity
Vukile’s share price increased by 13.7%, from 31 March 2017 (R19.25 per share) to R21.88 per share at year-end. Vukile’s
market capitalisation at year-end amounted to R17.2 billion.

Total shareholders’ return for the year ended 31 March 2018 equated to 21%.

During the 12 months ended 31 March 2018, 354 million Vukile shares were traded, which equates to approximately 29.5 million
shares per month. The total value of shares traded during the year amounted to R7.1 billion or 41% of the company’s market
capitalisation at 31 March 2018 (March 2017: 28%). This demonstrates a significant improvement in the liquidity of
Vukile’s shares.

Equity issuances
Equity issuance and dividend reinvestments for the year amounted to R1.6 billion:
– Vukile issued 34 574 468 shares under an accelerated bookbuild on 26 July 2017 at R18.80 per share – raising R650 million.

Shares issued under an election to reinvest cash dividend in return for shares:
– 28 June 2017 – 21 581 475 shares at R18.16 – R392 million.
– 19 December 2017 – 12 126 352 shares at R20.55 – R249 million.
– Vukile issued 14 598 540 shares under a specific issuance at R20.55 per share on 21 December 2017 – raising R300 million.

Cash flow
The major items reflected in the composition of cash generated and utilised during the year under review, are set out below:
Rm
Cash from operating activities 1 334
Issue of shares 1 557
Borrowings and advances 3 095
Acquisitions/improvements to investment properties (4 703)
Dividends paid (1 180)

Net proceeds from the sales of properties of R175 million, additional debt raised of R3.1 billion and share issuances of
R1.6 billion were utilised to acquire investment properties of R4.7 billion in South Africa and Spain.

Net asset value (cents per share)
The net asset value (NAV) of the group increased over the reporting period by 7.6% from 1 868 cents per share to 2 010 cents
per share at 31 March 2018.

Extract from the summarised audited consolidated statement of group profit or loss for the year ended 31 March 2018
2018 2017
%
R000 R000 R000 R000 variance Notes

Net profit from property operations(i) 1 309 075 1 246 232 5.0 (i)
Investment and other income 323 255 198 523 62.8 (ii)
– Dividends received 137 889 87 021 58.5
– Interest and other income 185 366 111 502 66.2
Profit on sale of asset management subsidiary – 54 813 (>100.0)
Share of income from associate (Atlantic Leaf) 95 485 45 251 111.0
Corporate and administrative expenditure (127 474) (96 155) (32.6) (iii)
Finance costs (367 808) (362 074) (1.6) (iv)
(i) Excludes straight-line rental income accrual.

Full details of distributable income are set out in the condensed segmental report below.

(i) Net group profit from property operations
Net group profit from property operations, excluding the straight-line income adjustment, increased by R63 million (5%),
from R1.25 billion to R1.31 billion. Castellana Properties Socimi SA (Castellana) contributed R174 million towards
the net profit from property operations. The prior year reflected six months of Synergy Income Fund Limited (Synergy)
net property revenue and the sale of a R2.4 billion portfolio to Gemgrow effective at 30 September 2016 resulted in net
property revenue for the current year being reduced by c.R100 million. The growth in net property revenue of the stable
portfolio was 6.5%.

Gross rental receivables (tenant arrears)
Group tenant arrears were R87.7 million at year-end or 4.9% of the gross rental income (March 2017: 4.3%). The retail sector
reported lower sales growth in general, and this difficult trading environment has affected certain non-national tenants
negatively. Our property managers report similar trends across the various portfolios they manage.

Impairment allowance – tenant receivables
The allowance for the impairment of tenant receivables increased by R11 million from R32.4 million at 31 March 2017 to
R43.7 million at 31 March 2018, which is considered adequate at this stage. The impairment allowance represents 2.2%
of gross property revenue (March 2017: 1.8%). In total, 50% of group tenant arrears have been accounted for as impaired.
A summary of the movement in the impairment allowance of trade receivables is set out below:
Group
R000
Movements on the group allowance for impairment of trade receivables are as follows:
At 1 April 2017 32 389
Allowance for receivables impairment 27 151
Receivables written off during the year as uncollectable (15 831)
At 31 March 2018 43 709
Rental written off 15 832

(ii) Group investment and other income
Investment and other income increased by R125 million to R323 million, made up as follows:
– Dividends received of R137.9 million during the year comprised of:
Fairvest R45.4 million
Gemgrow R92.5 million
R137.9 million

The main reason for the increase in dividends from R87 million to R138 million is that Gemgrow has been reflected as
a listed investment for a full year, compared to six months in the prior year.

– Interest and other income increased by R73 million, from R112 million to R185 million.

During the year interest income increased by R94 million from interest earned in respect of a €93.2 million cross
currency interest rate swap, and an increase of R5 million in the interest charged on loans to executive directors
and senior management to fund the acquisition of Vukile shares, offset by a reduction in non-recurring sundry income.

(iii) Group corporate and administrative expenditure
Group corporate administrative expenditure of R127.5 million is R31 million higher than the previous year’s expenditure.

The creation of a solid platform in Spain, with a high-calibre management and staff complement, has led to an increase in
corporate costs, namely:
– An additional R9.3 million for a full 12 months period (March 2017: three months) which also incorporates additional
legal and other fees incurred in the acquisition of investment properties in June and December 2017.
– Additional audit fees and additional staff costs incurred in Castellana, mainly from September 2017, have added
R11 million to the year-on-year increase.

The increase in Vukile’s short and long-term bonus schemes of R7.5 million also contributed to the rise in group
corporate administration costs.

(iv) Group finance costs
Group finance costs increased marginally by R6 million, from R362 million to R368 million.

– During the year, the group repaid bank debt and corporate bonds amounting to R813 million and R240 million respectively,
which resulted in a total interest saving of R56 million.

Included in the prior year’s group finance cost was interest relating to Synergy (renamed Gemgrow) as a subsidiary, which
is now excluded as Gemgrow is recorded as a listed investment. This resulted in a R46 million reduction in finance costs.

These reductions/savings were offset by:
– New corporate bonds totalling R572 million issued during the year, incurring interest of R45 million.
– The interest impact of new € debt drawn from local banks off Vukile’s balance sheet of €97.7 million to fund the
additional shares issued to Vukile by Castellana, to part fund the acquisition of the 11 retail parks and the acquisition
of Alameda and Del Pinatar amounted to c.R23 million.
– Following the restructure of new/replacement Spanish debt of €146 million, Castellana’s funding costs increased by
R40 million. This restructure was implemented to conform with Vukile’s debt policies. The increased debt facilities
were used to part fund the acquisition of the 11 retail parks, Alameda and Del Pinatar. This new debt is compared to the
€11 million debt in place in the prior year. This debt is non-recourse to Vukile and secured against Spanish assets only.

The average cost of finance (including amortisation of capital raising fees) for the year equates to 5.74%, with
interest-bearing term debt fully hedged (March 2017: 95.1%).

(v) Listed investments
Fairvest – 31.4%
Fairvest owned 43 properties valued at R2.8 billion at its financial year-end of 31 December 2017, or R65 million per
property. The portfolio comprised 95.8% retail and 4.2% office properties.

Fairvest continues to focus on the lower LSM retail market, similar to Vukile’s strategy, but targeting smaller properties.
Fairvest’s management has forecast a distribution growth of 9% to 10% for the period ending 30 June 2018.

Vukile acquired 30.4 million shares in Fairvest in September/October 2017, at a weighted average price of R2.01 per share.

Vukile owned 270 394 812 shares in Fairvest at 31 March 2018. Dividends of R45.4 million were received during the year
ended 31 March 2018. Dividends calculated on a full 12-month period equate to a yield of 9% based on the valuation of
Fairvest’s shares at year-end.

Gemgrow – 26.3%
Vukile owned 4 691 084 A shares and 114 438 564 B shares in Gemgrow at year-end.

Gemgrow’s management has forecast dividend growth for the B shares of 7% to 9% and 5% for the A shares, for the year
ending 30 September 2018.

Dividends received in respect of the A and B shares held by Vukile for the year ended 31 March 2018 amounted to R92.6 million.

As part of the Vukile and Arrowhead Properties Limited (Arrowhead) asset exchange agreement set out in a circular to
Synergy shareholders dated 26 September 2016, Synergy disposed of its portfolio of retail properties to Vukile in exchange
for most of Vukile’s higher yielding office and industrial assets. As part of this asset exchange Vukile and Arrowhead
provided income guarantees in respect of the assets sold by both companies to Synergy (Gemgrow). As the actual net property
revenue for the guarantee period ended 30 September 2017 was lower than the net of the guarantee given by both parties,
this resulted in Vukile selling 3 748 549 Gemgrow B shares for R1 to place the parties in a comparable position. This
resulted in the loss on sale of listed investments of R26.2 million.

Vukile does not consider this investment core to its strategy and will seek to dispose of this investment at an appropriate
time and price, in order to reinvest the proceeds into investment opportunities in Spain or South Africa.

(vi) Investment in associate
Atlantic Leaf – 34.9%
Atlantic Leaf’s assets have increased by 14% to £363 million at 28 February 2018 while total revenue has increased by 13%
to £24.1 million for its financial year ended 28 February 2018.

The company’s focus on the UK industrial and warehouse distribution centres, an attractive market segment, has provided
strong real growth in distributions of 7%, from 8.5 pence to 9.1 pence for the year ended 28 February 2018.

Following Vukile’s participation in an accelerated equity book build undertaken by Atlantic Leaf, Vukile received
23 152 709 Atlantic Leaf shares at a subscription price of R17.60 per share (£1.015) on 30 September 2017. As a result
of this, Vukile’s aggregate shareholding in Atlantic Leaf increased to 65 951 117 shares or 34.9% of the enlarged issued
share capital of Atlantic Leaf, resulting in an obligation on Vukile under the Securities (Takeover) Rules of Mauritius
to make a mandatory offer for all the voting shares in Atlantic Leaf not already owned by Vukile, at a consideration of
R17.60 per share.

The offer was accepted by shareholders holding 7 489 Atlantic Leaf shares, resulting in Vukile’s shareholding in
Atlantic Leaf increasing to 65 958 606 shares.

Dividends of R87 million were received during the year to 31 March 2018. Vukile’s share of equity accounted profits
from Atlantic Leaf for the year ended 31 March 2018 amounted to R95.5 million. Dividend income has generated a c.9.5%
yield in pound sterling for Vukile based on the carrying value of the investment in Atlantic Leaf at year-end of R1.2 billion.

Atlantic Leaf’s management are forecasting a dividend of 9.55 pence per share for the year ending 28 February 2019, or a
5% growth in dividends. As 75% of the dividends received by Vukile are subject to forward exchange contracts, the total
Rand year-on-year growth in dividends from Atlantic Leaf is forecast at c.9.9%.

Atlantic Leaf continues to perform in line with expectations, but given its high cost of equity and yield compression in
its preferred asset class in the UK. There are limited opportunities to invest further in this current financial year but
Vukile will work with management to unlock value.

(vii) Investment in subsidiary
Castellana – 98.74%
Further to Castellana’s acquisition of 11 retail parks for €193 million in June 2017 and in line with Vukile’s expansion
strategy in Spain, further acquisitions were made in December 2017 as follows:
– Alameda Park (a shopping centre and retail park) adjacent to Castellana’s Kinepolis Retail and Leisure Centre,
at a purchase price of €54.6 million.
– Pinatar Park (newly built retail park) at a purchase price of €10.7 million.

The total purchase price including transaction costs amounted to €67.8 million.

The seller of Alameda Park has provided Castellana with a minimum income guarantee as follows:
– Year one – €3.49 million.
– Year two – €3.56 million.
– Year three – €3.65 million.

Key financial measures
March 2018
Cash dividends (net of withholding Declared and paid to Vukile in May 2018
taxes of 2.66%) €10.4 million for year ended 31 December 2017
Investment properties €308 million
Interest-bearing debt €146 million
Loan to value ratio 47.4%
Loan to value ratio net of cash 42.2%

It should be noted that under Spanish law, Castellana and its subsidiaries are required to utilise Spanish GAAP in
the preparation of their individual annual financial statements and also require Castellana’s consolidated annual
financial statements to be prepared under International Financial Reporting Standards (IFRS) and these consolidated
IFRS financial statements have been used in the Vukile group’s consolidation, in terms of the basis of preparation
as set out in note 10.

(viii) Group borrowings
The group’s finance strategy is to optimise funding costs and minimise refinance risk. Total group debt as at
31 March 2018 amounted to c.R7.1 billion. A detailed breakdown is provided below:
Rm
Foreign Spanish funders (€) 2 128 Secured only against Castellana’s balance sheet
Local funders (€) 1 613
Local funders (£) 476 Secured against Vukile’s SA balance sheet
Local funders (R) 1 105
DMTN (R) 1 749 Partly secured against Vukile SA balance sheet
Total 7 071

Vukile’s funding of c.R7 billion (includes R77 million commercial paper issued by Vukile to its Namibian subsidiaries
and which is eliminated on consolidation reducing group debt to R6.9 billion), is well diversified across a number of
funders, in line with its strategy of reducing refinancing risk.

Debt %
Debt exposure Swaps
Funder R000 per bank R000
Absa 1 286 156 18.19 2 567 829
Banco Popular 164 253 2.32 164 253
Banco Santander 855 857 12.10 855 857
Caixabank 1 107 548 15.66 1 107 548
DMTN term debt 1 432 000 20.25 –
DMTN corporate paper 317 000 4.48 –
Investec 544 019 7.69 926 911
Nedbank 100 000 1.41 –
RMB 364 057 5.15 36 433
SCM 81 666 1.15 –
Standard Bank 818 324 11.57 928 511
Grand total 7 070 880 100.00 6 587 342

The Vukile group’s loan and swap expiry profile at 31 March 2018 is provided below:

2019 2020 2021 2022 2023 2024 2025 Total
Loan expiry profile Rm 1 631(1) 1 011 1 381 1 274 833 941 – 7 071
Swap expiry profile Rm 273 463 1 374 1 796 1 495 1 164 22 6 587
Loan expiry profile (%) 23.1 14.3 19.5 18.0 11.8 13.3 – 100
Swap expiry profile (%) 4.1 7.0 20.9 27.3 22.7 17.7 0.3 100
(1) Includes R77 million commercial paper issued by Vukile to its Namibian subsidiaries.

The strategy of ensuring that no more than 25% of debt expires in any one financial year has been achieved.

A summary of group debt ratios at 31 March 2018 is provided below:
Group South Africa Spain
R000 R000 €000
Total debt (excluding access facilities
and commercial paper) 6 504 566 4 376 908 146 000
Interest-bearing debt hedged (%) 101.27 101.9 100.00
Debt maturity profile (years) 2.7 1.9 4.6
Swaps – maturity profile (years) 3.6 3.1 4.6
Directors’ valuation loan to value ratio
(excluding MTM of derivatives)(1) (%) 32.9 29.1 47.4
Gearing ratio(3) (%) 29.6 28.0 42.7
Directors’ valuation loan to value ratio
(excluding MTM of derivatives) and net of cash (%) 28.2 24.6 42.2
External valuation loan to value ratio
(excluding MTM of derivatives)(2) (%) 33.9 30.2 47.4
Interest cover ratio (times) 3.2 3.1 3.8
(1) Directors’ valuation loan to value (LTV) ratio calculated as a ratio of interest-bearing debt divided by the sum of
(i) the amount of the most recent directors’ valuation of all the properties in the Vukile group property portfolio,
on a consolidated basis and (ii) the market value of equity investments.
(2) External valuation LTV loan to value ratio calculated as a ratio of interest-bearing debt divided by the sum of (i)
the amount of the most recent external valuation of all the properties in the Vukile group property portfolio, on
a consolidated basis and (ii) the market value of equity investments.
(3) Gearing is calculated as a ratio of total interest-bearing borrowings to total assets.

Undrawn available facilities at 31 March 2018
Undrawn available facilities amount to c.R489 million and are detailed as follows:
Facility Facility Facility
amount drawn available
R000 R000 R000
Absa RCF(1) 350 000 – 350 000
Investec access 100 000 60 472 39 528
RMB access 150 000 148 843 1 157
RMB term (EUR/ZAR) 163 344 65 214 98 130
Grand total 763 344 274 529 488 815
(1) A two-year revolving credit facility has been concluded post-year-end increasing this access facility from
R350 million to R850 million.

Our headroom facilities have therefore, significantly increased since year-end.

Ratings
Global Credit Rating Company (Pty) Ltd (GCR) recently affirmed an A corporate rating with a positive outlook and an
AA+ (RSA) rating on Vukile’s senior secured bonds.

Group debt movement during the year ended 31 March 2018
During the 12-month period ending 31 March 2018:
– c.R813 million of bank debt was repaid.
– VKE03 R240 million corporate bond was repaid.
– R500 million of new corporate bonds were issued (VKE09 R378 million and VKE10 R122 million) to repay VKE03 and
bank debt.
– R72 million (VKE10 tranche 2) corporate bond was issued to fund senior management’s share purchase plan.
– R317 million of corporate paper was refinanced (VKC23 R140 million, VKC24 R100 million and VKC25 R77 million).
– c.R144 million of access facilities were utilised for South African development/expansion projects.
– c.€137 million of EUR bank debt was entered into to acquire shares in Castellana to part fund the acquisition of
11 retail parks, Alameda and Pinatar.
– c.€146 million of bank debt was restructured in December 2017; expiring between four and six years. This debt is
non-recourse to Vukile.
– c. €146 million interest rate swaps were entered/restructured within Castellana, which swaps are non-recourse to Vukile.
– Vukile concluded new interest rate swaps totalling c.R1.562 billion (R72 million, £2.675 million and c.€127.2 million),
at an estimated annualised additional cost of R5.7 million.
– Vukile extended ZAR swaps amounting to c.R1 162 billion, at an estimated net annualised additional cost of R2.7 million.
– ZAR swaps amounting to c.R716 million matured, were terminated or were restructured into a new currency.

The group has complied with all the banks’ LTV covenants of 50%. The group has also complied with the DMTN’s LTV covenants
of 45% in respect of those properties mortgaged as security under the DMTN programme, and 50% in respect of total group debt
as a percentage of the value of total group investment properties and the market value of equity investments.

Noteholders’ approval was obtained under the DMTN programme to amend covenant terms to include the value of equity
investments in calculating the ‘V’ in the LTV ratio and to increase the LTV ratio by 5% to 45% for the transactional
LTV and to 50% for the corporate LTV. Banks have similarly agreed or are in the process of amending their covenant
terms to include the value of equity investments in calculating LTV ratios, thereby achieving a common measurement
regime across the portfolio.

Group foreign exchange currency hedges at 31 March 2018
Vukile has adopted a strategy of hedging its foreign dividend exposure at c.75% over a three-year period in line with
anticipated dates of dividend receipts.

EUR net income exposure – as at 31 March 2018
June December June December June December June
2018 2018 2019 2019 2020 2020 2021
Dividend payment dates € € € € € € €
Interest cost on Vukile EUR debt(I) (712 588) (1 425 175) (1 425 175) (1 425 175) (1 425 175) (1 425 175) (1 425 175)
Existing CCIRS hedge interest
costs(I) (418 106) (900 157) (895 238) (900 157) (909 994) (895 238) (895 238)
Existing FEC hedges on dividends (928 000) (2 165 000) (2 300 000) (2 300 000) (2 400 000) (2 457 000) (2 508 000)
Average FEC EUR/ZAR rate 16.0102 16.7111 17.7177 18.3974 19.1304 18.2643 18.9581
Unhedged dividend income 366 563 843 544 866 292 919 079 921 706 938 869 952 802
FEC hedges/(net distribution plus
CCIRS hedge) (%) 71.68 71.96 72.64 71.45 72.25 72.35 72.47
Average hedge (%) 72.16
(I) Funded out of Euro dividends receivable from Castellana.

GBP net income exposure – as at 31 March 2018
May November May November May November
2018 2018 2019 2019 2020 2020
Dividend payment dates £ £ £ £ £ £
Interest cost on Vukile GBP debt(I) (472 325) (472 325) (472 325) (472 325) (472 325) (472 325)
FEC hedges on dividends (1 953 000) (1 885 000) (1 930 000) (1 880 000) (1 935 000) (1 930 000)
Average FEC GBP/ZAR rate 18.0295 18.5992 19.2221 19.9144 20.6192 21.3807
Unhedged dividend income 608 771 755 921 783 476 780 709 791 668 829 647
FEC hedges/net distribution (%) 76.24 71.38 71.13 70.66 70.97 69.94
Average hedge (%) 71.72
(I) Funded out of GBP dividends receivable from Atlantic Leaf.

Group cost of finance at 31 March 2018
Although debt costs are forecast to increase in each respective currency in FY19 compared with FY18, the overall cost is
expected to reduce from 5.74% to 5.20% in FY19, due to a change in funding mix and as a larger percentage of debt will be in
foreign currency over the full period in FY19 compared to FY18.

The make-up for the year ended 31 March 2018 of the historic weighted average interest cost of 5.74% comprises the following:
– ZAR – 9.24%.
– EUR – 2.28%.
– GBP – 3.34%.

3. Southern African property portfolio overview
The Southern African property portfolio at 31 March 2018 consisted of 61 properties with a total
value of R14.5 billion (excluding the 20% non-controlling interest in Moruleng Mall) and gross
lettable area (GLA) of 937 463m2, with an average value of R238 million per property.

The geographical and sectoral distribution of the Southern African portfolio is indicated in the
tables below. The portfolio is well represented in most of the South African provinces and Namibia.
Some 76% of the gross income is derived from Gauteng, KwaZulu-Natal, Namibia and Western Cape.

Total
portfolio
Geographic profile %
% of gross income
Gauteng 37
KwaZulu-Natal 23
Namibia 8
Western Cape 8
Limpopo 6
Free State 6
Northwest 5
Mpumalanga 4
Eastern Cape 3

Based on value, 91% of the Southern African portfolio is in the retail sector, followed by 4% in the
industrial, 3% in the office, 1% in the motor related and 1% in the residential sector.

The tenant profile is listed in the table below:
Total
portfolio Retail
Tenant profile % %
% of GLA
A – Large national and listed tenants and major franchises 66 74
B – National and listed tenants, franchised and medium to large
professional firms 11 8
C – Other 23 18

The retail portfolio’s exposure to national, listed and franchised tenants is 82% in total.

The portfolio has low tenant concentration risk with the top 10 tenants accounting for 46.0% of total rent
and 54.4% of total GLA. Based on rent the STAR group is the single largest tenant,
with 8.3% of total rent (7.9% of total GLA), with Shoprite the second largest at 5.8% of total rent
(9.7% of total GLA).

The top 15 properties, all of which are retail assets, have 84% exposure to national, listed and franchised
tenants and represent 57.3% of the Southern African portfolio value and 44.6% of the Southern African portfolio
GLA.

Top 15 properties by value
Directors’
valuation
at
Rentable 31 March
area 2018 % Valuation
Property Location m2 Rm of total R/m2
Boksburg East Rand Mall* Gauteng 34 047 1 389 9.6 40 797
Pinetown Pine Crest KwaZulu-Natal 40 087 914 6.3 22 800
Durban Phoenix Plaza KwaZulu-Natal 24 351 914 6.3 37 534
Gugulethu Square Western Cape 25 322 544 3.8 21 483
Soweto Dobsonville Mall Gauteng 26 628 513 3.5 19 265
Queenstown Nonesi Mall Eastern Cape 27 927 472 3.3 16 901
Oshakati Shopping Centre Namibia 24 632 465 3.2 18 878
Phuthaditjhaba Maluti Crescent Free State 21 538 412 2.8 19 129
Daveyton Shopping Centre Gauteng 17 774 409 2.8 23 011
Moruleng Mall# Northwest 25 137 401 2.8 15 953
Germiston Meadowdale Mall** Gauteng 31 861 399 2.8 12 523
Randburg Square Gauteng 40 767 397 2.7 9 738
Thohoyandou Thavhani Mall*** Limpopo 17 658 396 2.7 22 426
Bloemfontein Plaza Free State 38 255 341 2.4 8 914
Atlantis City Shopping Centre Western Cape 22 115 331 2.3 14 967
Total top 15 properties 418 099 8 297 57.3 19 845
% of total portfolio 44.6 57.3
% of retail portfolio 51.6 62.7
* Represents an undivided 50% share in this property.
** Represents an undivided 67% share in this property.
*** Represents an undivided 33% share in this property.
# Represents 80% share in the company.

3.1 Valuation of Southern African portfolio
The accounting policies of the group require that the directors value the entire portfolio every six months
at fair value. Approximately one-half of the portfolio is valued every six months, on a rotational basis,
by registered independent third-party valuers. The directors have valued the Southern African property
portfolio at R14.5 billion(1) as at 31 March 2018. This is R1.4 billion or 10.6% higher than the valuation
as at 31 March 2017. Acquisitions of R389 million (Thohoyandou Thavhani Mall 33% and Bloemfontein Jet)
exceeded sales of R171.3 million (Hartbeespoort Sediba Shopping Centre, Sandton Rivonia Tuscany, Pretoria
Hatfield 1166 Francis Baard Street and Pretoria Lynnwood undeveloped land). The value of the stable portfolio
increased by 8.6%. The calculated recurring forward yield for the portfolio is 8.2%.

During the year all Southern African properties were valued by external valuers and the valuations by
Quadrant Properties (Pty) Ltd and Knight Frank (Pty) Ltd are in line with the directors’ valuations.

(1) The Southern African property portfolio overview takes into account Moruleng Mall at 80%, whereas in
the financial statements the Southern African property value reflects 100% of Clidet No 1011, which owns
Moruleng Mall.

3.2 Southern African property portfolio performance
March March
Financial performance for the stable portfolio (excluding 2018 2017 %
acquisitions and sales) Rm Rm change
Property revenue 945.5 894.4 5.7
Recurring net property expenses (152.4) (149.6) 1.9
Net property income 793.1 744.8 6.5
Property net expense ratios (%) 16.1 16.7

New leases and renewals in excess of 180 000m² with a contract value of R1.32 billion were concluded
during the year.

Details of large contracts concluded:
Contract Lease
value duration
Tenant Property Rm years
Pick n Pay Dobsonville Mall 94.9 25
Barloworld South Africa Bellville Barons 43.3 10
Spar Ruimsig Shopping Centre 35.3 10
Pick n Pay Bloemfontein Plaza 27.7 25
Food Lovers Market Dobsonville Mall 24.5 10
Dis-Chem Pine Crest 15.8 10
Cashbuild Meadowdale Mall (67%) 14.7 10
Mr Price Pine Crest 13.0 5
Betsa Dobsonville Mall 12.7 10
Shoprite Checkers Katutura Shoprite Centre 11.5 5

Expiry profile
The lease expiry profile table reflects that 29%, based on rent, of the leases are due for renewal in
the 2019 financial year. Approximately 38% of leases are due to expire in 2022 and beyond (up from 25%
beyond 2021 in the prior year).

Beyond
March March March March March
2019 2020 2021 2022 2022
Lease expiry % of rent % % % % %
Rent 29 18 15 11 27
Cumulative as at March 2018 29 47 62 73 100
Cumulative as at March 2017 48 65 75 85 100

Beyond
March March March March March
Vacant 2019 2020 2021 2022 2022
Lease expiry % of GLA % % % % % %
GLA 4.2 27 15 13 9 32
Cumulative as at March 2018 4.2 31 46 59 68 100
Cumulative as at March 2017 4.3 47 61 69 78 100

Vacancies
At 31 March 2018, the portfolio’s vacancy (measured as a percentage of gross rental) was 3.7% compared
to 4.2% at 31 March 2017. The retail portfolio vacancies based on rental decreased from 3.6% to 3.4%.

31 March 31 March
2018 2017
Vacancies (% of gross rental) % %
Retail 3.4 3.6
Industrial 6.0 7.2
Offices 10.3 12.6
Motor related 0.0 0.0
Total 3.7 4.2

The vacancy per sector (measured as a percentage of gross lettable area) is indicated in the table
below.

31 March 31 March
2018 2017
Vacancies (% of GLA) % %
Retail 3.9 3.8
Industrial 3.5 7.2
Offices 13.5 8.4
Motor related 0.0 0.0
Total 4.2 4.3

GLA summary GLA m²
Balance at 1 April 2017 936 458
GLA adjustments 2 036
Disposals (24 847)
Acquisitions and extensions 23 816
Balance at 31 March 2018 937 463

Vacancy summary Area m² %
Balance at 31 March 2017 40 167 4.3
Less: Properties sold since 31 March 2017 (2 745) 11.0
Remaining portfolio balance at 31 March 2017 37 422 4.1
Leases expired or terminated early 187 308
Renewal of expired leases (117 141)
Contracts to be renewed (37 858)
New letting of vacant space (30 050)
Balance at 31 March 2018 39 681 4.2

Base rentals (excluding recoveries)
The weighted average monthly base rental rates per sector, between 31 March 2017 and 31 March 2018, are
set out in the table below.

March March Escalations
Weighted average base rentals (R/m²) excluding recoveries 2018 2017 %
Retail 130.44 122.88 6.2
Industrial 54.42 51.96 4.7
Offices 95.74 90.25 6.1
Motor related 128.64 135.46 (5.0)
Total 122.77 115.42 6.4

The increased average rental rates on the total portfolio is due to the focused retail exposure.

The average contractual rental escalation of 7.2% is slightly lower than the previous year (7.4%). Positive
reversions of 5.1% were achieved across all sectors with retail at 5.2% and industrial at 7.3%. No transactions
were concluded in the office sector during the year.

Expense categories and ratios
The top four expense categories contribute 81% of the total expenses. These are: government services (45%),
rates and taxes (17%), cleaning and security (12%) and property management fees (7%).

The group continuously evaluates methods of containing costs in the portfolio. The stable portfolio’s recurring
net cost to income ratio has improved from 16.7% in March 2017 to 16.1% in March 2018.

3.3 Southern African portfolio – developments, acquisitions and sales
Acquisitions
Thavhani Mall, Thohoyandou, Limpopo
Acquired a 33.3% stake for R367 million at a guaranteed initial yield of 8%
Size: 53 509m2
Occupancy: fully occupied

Thavhani Mall is a new regional shopping centre that opened in August 2017 with a strong national tenant
component of 89%, including Edgars, Spar, Woolworths and Pick n Pay. It caters to a high-growth node
with over 87 000 households. The centre is trading exceptionally well. It is located in the heart of a
growing mixed-use urban precinct designed to be the future economic hub of Northern and Eastern Limpopo,
which is under development.

Acquiring Thavhani Mall allowed Vukile to enter and establish a dominant position in this Limpopo market
with an asset ideally matched to its investment strategy.

Completed upgrade projects
Phoenix Plaza, Durban, KwaZulu-Natal
Phoenix Plaza underwent a R35 million upgrade that refreshed and brightened the mall significantly with new
lighting, vibrant colours, fresh entrances and new façades. Internal sections of the mall were also
refurbished and new public ablution facilities added.

The upgrade is defensive and modernises Phoenix Plaza to ensure it remains the primary shopping destination
of choice for its loyal customer base.

Dobsonville Mall, Soweto, Gauteng
Dobsonville Shopping Centre was given a R117 million major expansion and upgrade with a 9.5% projected yield
on capital expenditure. Its total GLA is now 26,628m2. The project was completed in September 2017 and added
a new mall, food court and improved tenant mix to the centre, while also converting office space beside the
centre into better performing retail space linked to the original centre. It has been modernised in line with
the latest shopper and retailer expectations and changed its name from Dobsonville Shopping Centre to Dobsonville
Mall.

The upgrade strengthens the overall variety and experience at the centre, thus elevating its appeal to
retailers and customers alike. It has been optimised for the next generation of shoppers.

Bellville: Barons VW building
The Bellville Barons VW building is situated at the Durban Road intersection with the N1 highway in Bellville
Western Cape.

The last phase of the reconfiguration of the vacant premises into a Barloworld Ford dealership complete with
showrooms and a workshop, was completed in August 2017. The first phase consisted of the workshop and services
areas while the new and second-hand car show rooms and offices were completed in the second phase.

The total capex was R35 million. A 10-year lease has been concluded with Barloworld Auto. A yield of 15.1%, net
of costs, was achieved.

Barloworld is now considering the possibility of relocating the Western Cape Ford spare parts facility to this
property as well.

Larger redevelopment projects in progress
Maluti Crescent, Phuthaditjhaba, Free State
Maluti Crescent, formerly Setsing Crescent, is undergoing a major R368 million redevelopment with a projected
yield of c.8.3% on capital expenditure. On the back of strong tenant demand, this innovative redevelopment is
transforming the existing strip centre into a fully enclosed mall with three levels of parking. The centre is
currently anchored by SuperSpar, Game, Cashbuild and Woolworths with all five major banks and a very strong
national fashion contingent. Building on this, the redevelopment will increase the GLA from 21 538m² to 33 895m2,
double the centre’s current parking, add a new taxi rank of 100 bays and a second food anchor, Pick n Pay. New
fashion stores joining the centre include The Fix, Jet, Jam Clothing, Daniel J and various food outlets, including
the first Nando’s restaurant to open in the area. Woolworths will expand and new specification stores will be
introduced by Truworths and Identity, Foschini, Sportscene, Markham, Totalsports and Exact. All this will make
Maluti Crescent the dominant mall in the area by consolidating trade into a single node. Building work started
in October 2017 and is currently progressing well for completion by March 2019.

The major upgrade responds to shopper and retailer demand. It builds on the centre’s excellent trading metrics
and unlocks further income enhancement.

Pine Crest Shopping Centre: extension and upgrade
Vukile acquired the remaining 50% share of Pine Crest Shopping Centre in Pinetown, KwaZulu-Natal in March 2017.
Pine Crest is a 40 087m² small regional shopping centre over three levels with a multi-level parkade and an
average footfall of 940 000 per month. The centre has served the community for over 30 years and offers a quality
retail shopping experience with over 90 stores, including many of the biggest clothing brands in the country.
Anchor tenants include Game, Pick n Pay, Woolworths and a new Dis-Chem which was introduced in July 2017.

The extension and upgrade project was approved in December 2017 at a cost of R167 million and a projected net
yield of 7.9%. In addition an amount of R12 million was budgeted for required maintenance to the roofs,
air-conditioning and escalators. The existing ground floor mall will be extended into the ground floor under
cover parking area and a new off-street entrance will be provided to cater for the increasing number of shoppers
who arrive on foot from the nearby taxi rank. An additional set of escalators will be installed to allow for
easier access to the first and second level malls. Tenants targeted for the mall extension are financial services
retailers to complement the existing banks on this level as well as bigger box retailers. Leasing negotiations
are progressing well.

The estimated completion date is 31 July 2019.

Current South African portfolio projects
Our major development capital expenditure projects approved and incurred to 31 March 2018 are:

Budget
April
2018
Paid to to
31 March March
Approved 2018 2019
Approved projects Completion R000 R000 R000
Bellville: Barons Ford 30 July 17 35 400 34 179 1 221
Dobsonville Centre Extension 31 August 2017 117 000 113 211 3 789
Durban: Phoenix Plaza 31 May 2018 35 000 29 749 5 251
Durban: Pine Crest(I)(II) 31 July 2019 178 640 5 373 115 568
Meadowdale Mall 30 October 2016 16 264 12 227 4 037
Phuthaditjhaba: Maluti Crescent(I) 31 March 2019 367 570 45 738 251 826
Van Riebeeckshof, Welgedacht(I) 30 April 2019 35 500 909 32 591
785 374 241 386 414 283
(I) Further payments will be made after 31 March 2019.
(II) Includes R11.8 million maintenance capex.

The projects will be financed out of the proceeds from property sales and existing bank facilities.

Southern African property sales
Vukile concluded property sales during the year of R182 million, which supported our strategy to focus on
a low risk, high-quality portfolio of retail properties.

Sales
price %
R000 yield Dates of sale
Pretoria Lynnwood Erf 493 (vacant land) 2 900 2 August 2017
Sandton Rivonia Tuscany Place Section 6 4 970 11.2 24 October 2017
Sandton Rivonia Tuscany Place Section 7 7 810 14.1 24 October 2017
Sandton Rivonia Tuscany Place Section 10 12 070 9.6 24 October 2017
Sandton Rivonia Tuscany Place Section 5 12 780 12.8 24 October 2017
Sandton Rivonia Tuscany Place Section 9 14 200 11.6 24 October 2017
Pretoria Hatfield 1166 Francis Baard Street 16 500 8.7 8 September 2017
Sandton Rivonia Tuscany Place Section 8 19 170 6.1 24 October 2017
Hartbeespoort Sediba Shopping Centre 91 500 10.3 27 November 2017
181 900 10.1

4. Spanish property portfolio overview
The Spanish property portfolio at 31 March 2018 consisted of 13 properties with a total value of
€308 million (based on external valuations) and GLA of 172 973m², with an average value of
€23.7 million per property.

The geographical and sectoral distribution of the Spanish portfolio is indicated in the tables below.

Total
portfolio
Geographic profile % of GLA %
Granada 34
Badajoz 15
Madrid 14
Huelva 12
Asturias 10
Murcia 6
Caceres 4
Seville 3
Castellon 2

Based on value, 92% of the Spanish portfolio is in the retail sector and 8% is in the office sector.

The tenant profile is listed in the table below:
Retail
Tenant profile % of GLA %
Large national and international tenants 93
Local tenants 7

Castellana’s top 10 tenants account for 62.0% of total rent and 63% of total GLA. Based on rent Media Markt
is the single largest tenant, with 11% of total rent. Konecta is the largest tenant by GLA (10.1%).

External
value at
Rentable 31 March
area 2018 % Valuation
Property Location m2 €m of total €/m2
Alameda Retail Park Granada 27 256 55 18.0 2 029
Parque Oeste* Madrid 13 604 49 16.0 3 632
Kinepolis Retail Park and Leisure Centre Granada 25 988 46 14.9 1 768
Parque Principado Asturias 16 396 33 10.6 1 988
Marismas Del Polvorín Huelva 20 000 29 9.4 1 438
Konecta Madrid Madrid 11 046 20 6.5 1 822
La Heredad Badajoz 13 653 19 6.2 1 406
La Serena** Badajoz 12 605 15 5.0 1 219
Pinatar Park Murcia 10 637 12 3.8 1 094
Mejostilla Caceres 7 281 9 2.8 1 180
Motril Granada 5 559 8 2.7 1 513
Ciudad del Transporte Castellon 3 250 7 2.3 2 175
Konecta Seville Seville 5 698 6 1.8 986
Total portfolio 172 973 308 100 1 781
* This park comprises two adjacent properties that were acquired in two separate companies, but has been treated
as a single combined property for reporting purposes.
** This park comprises two adjacent properties that were acquired in two separate companies, but has been treated
as a single combined property for reporting purposes.

Valuation of the Spain portfolio
During the year all the properties were valued by external valuers, Colliers International.

Expiry profile
The Spanish properties’ lease expiry profile table reflects that 2%, based on rent, of the leases are due for
renewal in the 2019 financial year. Approximately 86% of leases are due to expire in 2028 and beyond.

March March March March March
2019 2020 2021 2022 2023
Lease expiry % of rent % % % % %
Rent 2 0 1 1 1
Cumulative as at March 2018 2 2 3 4 4

Beyond
March March March March March March
2024 2025 2026 2027 2028 2028
Lease expiry % % % % % %
Rent 1 0 0 2 8 85
Cumulative as at March 2018 5 5 5 7 15 100

Break profile
Castellana’s lease break profile table reflects that 12%, based on rent, of the leases have break options
in the 2019 financial year.

March March March March March
2019 2020 2021 2022 2023
Lease break % of rent % % % % %
Rent 12 11 22 12 18
Cumulative as at March 2018 12 23 46 58 76

Beyond
March March March March March March
2024 2025 2026 2027 2028 2028
Lease break % of rent % % % % % %
Rent 3 3 2 0 0 16
Cumulative as at March 2018 79 82 84 84 84 100

Vacancies
At 31 March 2018, the Spanish portfolio’s vacancy (measured as a percentage of gross lettable area) was
1.5% excluding the development vacancy at Kinepolis Leisure Centre.

31 March
2018
Vacancies (% of GLA) %
Retail 1.5
Offices 0.0
Total 1.5

Base rentals (excluding recoveries)
The weighted average monthly base rental rates per sector, are set out in the table below.

31 March
Weighted average base rentals (€/m2) 2018
Retail 9.24
Offices 9.05
Total 9.22

Spain developments, acquisitions and sales
Acquisitions
Retail park portfolio
Acquired 11 retail parks for €193 million at an initial yield of 6.2%
Size: 118 337m2
Occupancy: 98%

The acquisition gives the company immediate scale in the region through a well-diversified portfolio of 11
retail parks across Spain. The total GLA of the portfolio is 118 337m² and 95% of gross revenue is derived
from leading Spanish national and international retail tenants including Media Markt, Sprinter, Worten, Aki
and Mercadona. The retail parks in the portfolio are high quality and newly built. Retail rentals for prime
subregional retail parks are in the region of €10 to €12 per m2 per month. The portfolio has an average
monthly rental of €9.18 per m2 providing room for income growth.

Alameda Park
Acquired 100% of Alameda Park for €54.6 million at an initial yield of 6.4%
Size: 25 456m2
Occupancy: 95.4%

Alameda Park is a well-located retail park and shopping centre located adjacent to the Kinepolis complex.
Anchor tenants include Decathlon, Mercadona and Maisons du Monde. The centre boasts a catchment area of
586 000 people. This acquisition has cemented Castellana’s position as the sole owner of the primary
retail node in Northern Granada.

Pinatar Park
Acquired 100% of Pinatar Park for €10.7 million at an initial yield of 7.0%
Size: 10 637m2
Occupancy: 100%

Pinatar Park is a strong fully let convenience retail park located in San Pedro Del Pinatar, in Murcia. Anchor
tenants include AKI, Economy Cash and Jysk. The centre is newly built with a WALE of five years. Castellana
has the option to acquire the adjacent land in order to expand.

Larger redevelopment projects in progress
Kinepolis Leisure Centre
Kinepolis Leisure Centre is undergoing a major upgrade and expansion with a projected yield of c.10.70% on
capital expenditure of €5.4 million. On the back of strong tenant demand, this innovative upgrade will improve
the centre by increasing natural light, increasing shopfronts, opening up the façade and inserting floor to
ceiling windows. In addition, the internal finishes will be upgraded and a state of the art kids play area will
be installed to better service the Kinepolis customer. There is currently strong demand from retailers with the
upgrade currently 70% pre-let.

The major upgrade responds to shopper and retailers demand and unlocks further value and will be accretive.

Property sales
No property sales were concluded during the period.

5. International expansion
In line with its focused strategy, Vukile has decided that for the short to medium term, its only
international expansion will be focused on Spain and no new areas of investment will be targeted.

6. Prospects
Consistent with our strategy, in the year ahead we will continue to look for further expansion
opportunities in South Africa and Spain, and, where possible, to recycle non-core assets into our
two core markets. We expect balance sheet metrics to remain largely in line with those of FY18.

While we are buoyed by the improving political and economic climate in South Africa, and the resultant
uptick in consumer confidence, we are yet to see a tangible improvement in the trading environment.
As such, we anticipate another challenging year ahead, largely in line with the operating conditions
we endured over the past year. We do, however, expect to see an improvement in trading activity
beyond next year.

We are confident that our portfolio is very well structured to continue delivering a solid operating
performance as a result of the defensive nature of its tenant mix and shopper markets. We are also
well positioned to benefit from an increase in consumer activity, should it materialise.

In Spain, Castellana is set to continue growing apace as we are experiencing strong deal flow and
seeing the benefits of the operating infrastructure we have created on the ground. Moreover, its
profitability should increase comfortably in the year ahead as certain once-off costs will not recur.
We look forward to its first full year of contributing to Vukile’s income streams in FY19. Castellana
is expected to list on the Madrid Junior Board (MAB) at the end of July 2018 by way of an introductory
listing. We do not plan to raise external capital on this listing.

Assuming no material adverse change in trading conditions and large corporate failures, Vukile expects
to deliver growth in dividends of between 7.5% to 8.5% in the year ahead. Forecast rental income is
based on contracted escalations and market related renewals.

This forecast has not been reviewed or reported on by the company’s auditors.

7. Post-period events
In line with IAS 10 Events after the Reporting Period, the declaration of the dividend occurred after
the end of the reporting period, resulting in a non-adjusting event that is not recognised in the
financial statements.

The board approved a final dividend on 28 May 2018 of 96.16625 cents per share for the six months ended
31 March 2018 amounting to R754.7 million.

In line with Vukile’s previously communicated strategy of increasing its exposure in Spain, Vukile’s
subsidiary Castellana, in which Vukile currently has a 98.7% shareholding, has entered into an agreement
with Heref Habaneras Socimi S.A.U to acquire the immovable property known as the Habaneras Shopping
Centre (Habaneras) for an aggregate consideration of €80.6 million before costs. This acquisition was
funded through a €42.3 million loan from Aareal Bank (non-recourse to Vukile) and an increase in Vukile’s
equity investment into Castellana of €42.7 million.

8. Declaration of a cash dividend with the election to reinvest the cash distribution in return for
Vukile shares
Notice is hereby given of a gross dividend amounting to 96.16625 cents per share out of distributable income
for the six-month period to 31 March 2018.

Shareholders will be entitled to elect (in respect of all or part of their holding) to reinvest the cash
distribution of 96.16625 cents per share, in return for shares (the share reinvestment alternative), failing
which they will receive the cash dividend in respect of all or part of their holdings.

A circular providing further information in respect of the cash dividend and the share reinvestment
alternative will be posted to shareholders on or about 31 May 2018.

Shareholders who have dematerialised their shares are required to notify their duly appointed Central
Securities Depository Participant (CSDP) or broker of their election in the manner and time stipulated in
the custody agreement governing the relationship between the shareholder and their CSDP or broker.

Tax implications
Vukile was granted REIT status by the JSE Limited with effect from 1 April 2013 in line with the
REIT structure as provided for in the Income Tax Act, No. 58 of 1962, as amended (the Income Tax Act)
and section 13 of the JSE Listings Requirements.

The REIT structure is a tax regime that allows a REIT to deduct qualifying dividends paid to investors,
in determining its taxable income.

The cash dividend of 96.16625 cents per share meets the requirements of a ‘qualifying distribution’ for
the purposes of section 25BB of the Income Tax Act (a qualifying distribution) with the result that:
– Dividends received by resident Vukile shareholders must be included in the gross income of such
shareholders (as a non-exempt dividend in terms of section 10(1)(k)(i)(aa) of the Income Tax Act),
with the effect that the dividends are taxable as income in the hands of the Vukile shareholder.
These dividends are however exempt from dividends withholding tax, provided that the South African
resident shareholders provided the following forms to their CSDP or broker, as the case may be, in
respect of uncertificated shares, or the company, in respect of certificated shares:
– A declaration that the distribution is exempt from dividends tax.
– A written undertaking to inform the CSDP, broker or the company, as the case may be, should the
circumstances affecting the exemption change or the beneficial owner cease to be the beneficial owner.
– Both in the form prescribed by the Commissioner for the South African Revenue Service. Shareholders
are advised to contact their CSDP, broker or the company, as the case may be, to arrange for the
abovementioned documents to be submitted prior to payment of the distribution, if such documents
have not already been submitted.
– Dividends received by non-resident Vukile shareholders will not be taxable as income and instead
will be treated as ordinary dividends but which are exempt in terms of the usual dividend exemptions
per section 10(1)(k) of the Income Tax Act. It should be noted that dividends received by non-residents
are subject to dividends withholding tax at a rate of 20% unless the rate is reduced in terms of any
applicable agreement for the avoidance of double taxation (DTA) between South Africa and the country of
residence of the shareholder. Assuming dividends withholding tax will be withheld at a rate of 20%, the
net distribution amount due to non-resident shareholders is 76.9330 cents per share. A reduced dividend
withholding rate in terms of the applicable DTA, may only be relied upon if the non-resident holder has
provided the following forms to their CSDP or broker, as the case may be, in respect of uncertificated
shares, or the company, in respect of certificated shares:
– A declaration that the dividend is subject to a reduced rate as a result of the application of a DTA.
– A written undertaking to inform their CSDP, broker or the company, as the case may be, should the
circumstances affecting the reduced rate change or the beneficial owner cease to be the beneficial
owner.
both in the form prescribed by the Commissioner for the South African Revenue Service. Non-resident
holders are advised to contact their CSDP, broker or the company, as the case may be, to arrange for the
abovementioned documents to be submitted prior to payment of the distribution if such documents have not
already been submitted, if applicable.

Shareholders who are South African residents are advised that in electing to participate in the share
reinvestment alternative, pre-taxation funds are utilised for the reinvestment purposes and that taxation
will be due on the total cash dividend amount of 96.16625 cents per share.

Shareholders are further advised that:
– The issued capital of Vukile is 784 766 367 shares of one cent each at 30 May 2018.
– Vukile’s tax reference number is 9331/617/14/3.

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

Summary of the salient dates relating to the cash dividend and share reinvestment alternative
are as follows:
Salient dates and times 2018
Annual results including declaration announcement released on SENS Wednesday, 30 May
Circular and form of election posted to shareholders Thursday, 31 May
Finalisation information including the share ratio and price per
share published on SENS Tuesday, 12 June
Last day to trade in order to participate in the election to receive
the share reinvestment alternative or to receive a cash dividend (LDT) Tuesday, 19 June
Shares trade ex dividend Wednesday, 20 June
Listing of maximum possible number of shares under the share
reinvestment alternative and trading in new shares commences Friday, 22 June
Last day to elect to receive the share reinvestment alternative or to
receive a cash dividend (no late forms of election will be accepted)
at 12:00 (SA time) Friday, 22 June
Record date for the election to receive the share reinvestment
alternative or to receive a cash dividend (record date) Friday, 22 June
Results of cash dividend and share reinvestment alternative published
on SENS Monday, 25 June
Cash dividend cheques posted to certificated shareholders on or about Monday, 25 June
Accounts credited by CSDP or broker to dematerialised shareholders
with the cash dividend payment Monday, 25 June
Share certificates posted to certificated shareholders on or about Wednesday, 27 June
Accounts updated with the new shares (if applicable) by CSDP or broker
to dematerialised shareholders Wednesday, 27 June
Adjustment to shares listed on or about Thursday, 28 June
Notes:
1. Shareholders electing the share reinvestment alternative are alerted to the fact that the new
shares will be listed on LDT + 3 and that these new shares can only be traded on LDT +3, due to
the fact that settlement of the shares will be three days after record date, which differs from
the conventional one day after record date settlement process.
2. Shares may not be dematerialised or rematerialised between Tuesday, 19 June 2018 and
Friday, 22 June 2018, both days inclusive.
3. The above dates and times are subject to change. Any changes will be released on SENS.

9. Proposed board changes
The company announced on SENS on 29 May 2018 that Mr Anton Botha will retire from the board of directors
at the upcoming annual general meeting (AGM) which is anticipated to be held on or about 14 August 2018.
Mr Botha will be succeeded by Mr Nigel Payne who is currently the chairman of the audit and risk committee,
while Dr Renosi Mokate will assume the role of lead independent non-executive director with effect from
1 June 2018, in line with King IV.

In light of Mr Payne’s intended role as chairman of the board, the company has reconstituted the audit
and risk committee. Ms Babalwa Ngonyama will assume the role of chairman of the audit and risk committee
following the AGM. Mr Peter Moyanga, who has served on the audit and risk committee since its inception
in 2004, will retire from the audit and risk committee at the AGM but will remain a member of the board.

10.Basis of preparation
The summarised audited consolidated financial statements for the year ended 31 March 2018, and
comparative information, have been prepared in accordance with, and containing the information required
by, International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued
by the Accounting Practices Committee and Financial Reporting Announcements as issued by the Financial
Reporting Standards Council, the JSE Listings Requirements, IAS 34 and relevant sections of the
South African Companies Act.

Except for the amendments adopted as set out below, all accounting policies applied by the group in the
preparation of these consolidated financial statements are consistent with those applied by the group
in its consolidated financial statements as at and for the year ended 31 March 2017. The group has
adopted the following amendments to standards which were effective for the first time for the
financial period commencing 1 April 2017:
– Amendments to IFRS 12 – Disclosure of Interest in Other Entities;
– Amendments to IAS 7 – Disclosure of cash flows;
– Amendments to IAS 12 – Income tax.

Based on management’s assessment of these amendments, the only material impact identified on the
financial statements relates to the amendment to IAS 7.

These statements, which comprise the statement of financial position at 31 March 2018, the statement
of profit or loss and other comprehensive income, statement of changes in equity and statement of
cash flows for the 12 months then ended is extracted from audited information, but is itself not
audited. The annual financial statements were audited by Grant Thornton, who expressed an unqualified
opinion thereon. The auditor’s report does not necessarily cover all of the information included in
this announcement. Shareholders are therefore advised that, in order to obtain a full understanding
of the nature of the auditor’s work, they should obtain a copy of the audit report together with the
accompanying financial information from the registered office of the company situated at Ground Floor,
One-On-Ninth, Corner Glenhove Road and 9th Street, Melrose Estate. The directors take full responsibility
for the preparation of this report and that the financial information has been correctly extracted from
the underlying financial statements.

This report was compiled under the supervision of Michael John Potts CA(SA), the financial director of
the company.

The directors are not aware of any matters or circumstances arising subsequent to 31 March 2018 that
require any additional disclosure or adjustment to the financial statements and which are not disclosed
in this announcement.

On behalf of the board

AD Botha LG Rapp
Chairman Chief executive officer

Melrose Estate
30 May 2018

Summarised audited consolidated statement of financial position
at 31 March 2018
2018 2017
GROUP R000 R000
ASSETS
Non-current assets 22 028 749 15 850 308
Investment properties 18 821 251 13 219 530
Investment properties 19 102 209 13 497 445
Investment properties under development 54 476 51 191
Straight-line rental income adjustment (335 434) (329 106)
Other non-current assets 3 207 498 2 630 778
Straight-line rental income asset 335 434 329 106
Equity investments 1 384 645 1 366 239
Investment in associate 1 199 292 780 347
Goodwill 63 288 63 009
Furniture, fittings, computer equipment and intangible assets 12 054 14 049
Available-for-sale financial asset 34 099 23 855
Derivative financial instruments 26 039 1 722
Long-term loans granted 103 672 38 110
Deferred taxation assets 48 975 14 341
Current assets 1 287 893 1 589 768
Trade and other receivables 186 743 256 405
Derivative financial instruments – 1 752
Current taxation assets 7 290 1 666
Cash and cash equivalents 1 093 860 1 329 945
Investment properties held for sale 10 500 76 632
Total assets 23 327 142 17 516 708
EQUITY AND LIABILITIES
Equity attributable to owners of the parent 15 770 080 13 111 425
Non-controlling interest 81 311 73 367
Non-current liabilities 5 484 980 2 964 638
Other interest-bearing borrowings 5 346 371 2 937 590
Derivative financial instruments 131 304 26 115
Deferred taxation liabilities 7 305 933
Current liabilities 1 990 771 1 367 278
Trade and other payables 428 733 354 370
Borrowings 1 554 359 1 002 581
Derivative financial instruments 175 –
Current taxation liabilities 7 504 8 892
Shareholder for dividend – 1 435
Total equity and liabilities 23 327 142 17 516 708
Net asset value (cents per share)(1) 2010 1868
(1)Excluding non-controlling interest.

Summarised audited consolidated statement of profit or loss and other comprehensive income
for the year ended 31 March 2018
2018 2017
GROUP R000 R000
Property revenue 2 014 966 1 964 202
Straight-line rental income accrual 5 401 (161 077)
Gross property revenue 2 020 367 1 803 125
Property expenses (705 891) (717 970)
Net profit from property operations 1 314 476 1 085 155
Corporate and administrative expenses (127 474) (96 155)
Investment and other income 323 255 198 523
Operating profit before finance costs 1 510 257 1 187 523
Finance costs (367 808) (362 074)
Profit before capital items 1 142 449 825 449
Profit on sale of investment properties 13 405 25 250
Profit on sale of furniture and equipment 144 92
Fair value (loss)/gain on listed property securities (16 411) 105 739
Fair value movement of derivative financial instruments 7 408 (6 251)
Cost of terminating derivative financial instruments (3 250) –
Foreign exchange profit 59 936 83 679
Profit on sale of subsidiary – 54 813
Loss of control of subsidiary – (276 781)
Loss on sale of listed property securities (26 240) –
Other capital items – (971)
Goodwill written off on sale of properties by a subsidiary – (3 889)
Cost of acquisition of business combination – (66)
Profit before property fair value adjustments 1 177 441 807 064
Fair value adjustments 1 149 988 693 521
Gross change in fair value of investment properties 1 155 389 532 444
Straight-line rental income adjustment (5 401) 161 077
Profit before equity-accounted investment 2 327 429 1 500 585
Profit share of associate 95 485 45 251
Profit before taxation 2 422 914 1 545 836
Taxation (10 668) (9 286)
Profit for the year 2 412 246 1 536 550
Profit attributable to:
Owners of the parent 2 401 943 1 499 420
Non-controlling interests 10 303 37 130
Other comprehensive loss
Items that will be reclassified subsequently to profit or loss
Currency loss on translation of investments in foreign entities (69 326) (157 403)
Currency profit/(loss) on translation of goodwill 279 (378)
Cash flow hedges (net of tax) (60 202) (39 323)
Available for sale financial assets – current year loss (17 610) (15 206)
Other comprehensive loss for the year (146 859) (212 310)
Total comprehensive income for the year 2 265 387 1 324 240
Total comprehensive income attributable to:
Owners of the parent 2 254 319 1 287 981
Non-controlling interest 11 068 36 259
Basic and diluted earnings per share (cents)(1) 320.65 217.93
Weighted average number of shares in issue 749 084 702 688 024 118
Number of shares in issue 784 766 367 701 885 532
(1)Vukile has no dilutionary shares in issue.

Audited reconciliation of earnings to headline earnings
for the year ended 31 March 2018
2018 2017
Group Cents per Group Cents per
R000 share R000 share
Attributable profit to owners of the parent 2 401 943 320.65 1 499 420 217.93
Earnings 2 401 943 320.65 1 499 420 217.93
Change in fair value of investment properties
(net of allocation to non-controlling interest) (1 148 906) (153.37) (676 899) (98.38)
Write-off of goodwill on sale of
properties sold by a subsidiary – – 3 889 0.56
Profit on sale of investment properties (13 405) (1.79) (25 250) (3.67)
Profit on sale of furniture, fittings and
computer equipment (144) (0.02) (92) (0.01)
Profit on sale of subsidiary – – (54 813) (7.97)
Loss of control of subsidiary – – 276 781 40.23
Fair value earnings of associate –
adjusted headline earnings (10 267) (1.37) 16 804 2.44
Headline earnings of shares 1 229 221 1 039 840
Weighted average number of shares in issue 749 084 702 688 024 118
Headline and diluted headline earnings per share 164.10 151.13

Summarised audited consolidated statement of cash flows
for the year ended 31 March 2018
2018 2017
GROUP R000 R000
Cash flow from operating activities 1 333 609 1 104 588
Cash flow from investing activities* (4 599 117) 448 450
Cash flow from financing activities* 3 031 308 (1 155 176)
Net (decrease)/increase in cash and cash equivalents (234 200) 397 862
Foreign currency movement in cash (1 885) (376)
Cash and cash equivalents at the beginning of the year 1 329 945 932 459
Cash and cash equivalents at the end of the year 1 093 860 1 329 945
Major items included in the above
Cash flow from operating activities
Profit before tax 2 422 914 1 545 836
Adjustments (1 216 409) (378 051)
Cash flow from investing activities
Acquisition of and improvements to investment properties (4 703 030) (3 466 306)
Investment in associate (418 281) (180 677)
Net proceeds on sale of investment properties 175 316 4 113 776
Cash flow from financing activities
Issue of shares 1 556 631 902 251
Dividends paid (1 180 330) (1 049 031)
Finance costs (352 989) (355 763)
Interest-bearing borrowings advanced/(repaid) 3 094 928 (622 474)
* In the prior year available-for-sale financial assets were included as part of investing activities. This has been
reclassified to financing activities. The reclassification amounted to a movement of R19.2 million

Summarised audited consolidated statement of changes in equity
for the year ended 31 March 2018

Non- Share- Non-
Stated distributable Retained holders’ controlling
capital reserves earnings interest interest Total
GROUP R000 R000 R000 R000 R000 R000
Balance at 31 March 2016 7 068 563 4 387 231 476 780 11 932 574 556 681 12 489 255
Issue of share capital 902 251 – – 902 251 – 902 251
Dividend distribution – – (1 025 270) (1 025 270) (25 196) (1 050 466)
7 970 814 4 387 231 (548 490) 11 809 555 531 485 12 341 040
Profit for the year – – 1 499 420 1 499 420 37 130 1 536 550
Change in fair value of
investment properties – 532 444 (532 444) – – –
Change in fair value of investment
properties attributable to
non-controlling interests – (16 622) 16 622 – – –
Share-based remuneration – 17 413 – 17 413 – 17 413
Deferred taxation on change
in fair value of derivatives – 1 750 – 1 750 – 1 750
Transfer to non-distributable reserves – 104 024 (103 315) 709 – 709
Non-controlling interest arising
in respect of a subsidiary acquired – – – – 26 855 26 855
Share issue expenses of a subsidiary – (7 111) – (7 111) (3 829) (10 940)
Loss of control of subsidiary – (231 623) 232 751 1 128 (517 403) (516 275)
Revaluation of equity investments – 105 739 (105 739) – – –
Other comprehensive loss – (211 439) – (211 439) (871) (212 310)
Balance at 31 March 2017 7 970 814 4 681 806 458 805 13 111 425 73 367 13 184 792
Issue of capital 1 556 631 – – 1 556 631 – 1 556 631
Dividend distribution – – (1 176 155) (1 176 155) (2 741) (1 178 896)
9 527 445 4 681 806 (717 350) 13 491 901 70 626 13 562 527
Profit for the year – – 2 401 943 2 401 943 10 303 2 412 246
Change in fair value of
investment properties – 1 155 389 (1 155 389) – – –
Change in fair value of
investment properties attributable
to non-controlling interests – (6 486) 6 486 – – –
Share-based remuneration – 21 077 – 21 077 – 21 077
Deferred taxation on change
in fair value of derivatives – (2 241) – (2 241) – (2 241)
Transfer to non-distributable
reserves – currency revaluation – 59 936 (59 936) – – –
Transfer from non-distributable reserve – (4 498) 12 835 8 337 – 8 337
Share issue expenses of a subsidiary – (3 637) – (3 637) (59) (3 696)
Change in shareholding of a subsidiary – 324 – 324 (324) –
Legal reserve transfer – 217 (217) – – –
Revaluation of equity investments – (16 411) 16 411 – – –
Other comprehensive loss – (147 624) – (147 624) 765 (146 859)
Balance at 31 March 2018 9 527 445 5 737 852 504 783 15 770 080 81 311 15 851 391

Summarised operating segment analysis
for the year ended 31 March 2018

The revenues and profits generated by the group’s operating segments and segment assets are summarised in the table below.
As reported in the six-month period to 30 September 2017, there has been a change from prior periods in the measurement methods
used to determine key operating segments and reported segment profits. The executive committee (Exco), the group’s operating
decision-making forum, driven by its international strategy and the fact that in excess of 90% of the southern Africa portfolio
is retail, has taken a decision to measure operating segments and reported segment profits on a geographical basis, initially,
Southern Africa, Spain and United Kingdom.

The results of the operating segments are reviewed regularly by Exco to assess performance and decisions to allocate capital
to each of the segments.

Southern Africa United Spain Total
Retail Other Total Kingdom Retail Other Total group
GROUP R000 R000 R000 R000 R000 R000 R000 R000
Group income for the year ended 31 March 2018
Property revenue(i) 1 232 435 124 674 1 357 109 177 965 26 724 204 689 1 561 798
Straight-line rental income accrual 4 780 484 5 264 137 – 137 5 401
1 237 215 125 158 1 362 373 178 102 26 724 204 826 1 567 199
Property expenses (net of recoveries)(i) (213 875) (7 952) (221 827) (27 521) (3 375) (30 896) (252 723)
Profit from property operations 1 023 340 117 206 1 140 546 150 581 23 349 173 930 1 314 476
Profit from associate 95 485 95 485
(i) The property revenue and property
expense have been reflected net
of recoveries.
The summarised audited consolidated
statement of profit or loss and other
comprehensive income reflects the gross
property revenue and gross
property expenses.

Group statement of financial position at
31 March 2018
Assets
Investment properties 13 328 678 1 249 288 14 577 966 4 113 957 375 256 4 489 213 19 067 179
Add: Lease commissions 35 030 – 35 030
13 328 678 1 249 288 14 612 996 4 113 957 375 256 4 489 213 19 102 209
Goodwill 48 218 48 218 15 070 15 070 63 288
Investment properties held for sale 10 500 10 500 10 500
13 376 896 1 259 788 14 671 714 4 113 957 390 326 4 504 283 19 175 997
Add:
Investment property under development 54 476 54 476
Equity investments 1 384 645 1 384 645
Investment in associate – 1 199 292 1 199 292
Furniture, fittings,computer
equipment and intangible asset 11 202 852 12 054
Available-for-sale financial asset 34 099 34 099
Derivative financial instruments 23 808 2 231 26 039 26 039
Loans receivable 103 672 103 672
Deferred taxation assets 48 975 48 975
Trade and other receivables 166 133 20 610 186 743
Taxation refundable 6 7 284 7 290
Cash and cash equivalents 826 371 267 489 1 093 860
Total assets 23 327 142
Equity and liabilities
Stated capital 8 710 972 816 473 9 527 445 9 527 445
Interest-bearing borrowings 4 437 744 415 947 4 853 691 2 047 039 – 2 047 039 6 900 730
13 148 716 1 232 420 14 381 136 2 047 039 – 2 047 039 16 428 175
Add:
Other components of equity
and retained earnings 4 146 104 2 096 531 6 242 635
Non-controlling interest 47 990 33 321 81 311
Derivative financial instruments 82 528 45 885 128 413 3 066 3 066 131 479
Deferred taxation liabilities 934 6 371 7 305
Trade and other payables 339 325 89 408 428 733
Current taxation liabilities 7 347 157 7 504
Total equity and liabilities 23 327 142

Group income for the year ended 31 March 2017
Property revenue(i) 1 102 166 352 048 1 454 214 7 131 7 131 1 461 345
Straight-line rental income accrual (118 385) (42 692) (161 077) – – (161 077)
983 781 309 356 1 293 137 7 131 7 131 1 300 268
Property expenses (net of recoveries)(i) (190 906) (23 429) (214 335) (778) (778) (215 113)
Profit from property operations 792 875 285 927 1 078 802 6 353 6 353 1 085 155
Profit from associate 45 251 45 251
(i) The property revenue and property
expense have been reflected net of recoveries.
The summarised audited consolidated statement
of profit or loss and other
comprehensive income reflects the gross
property revenue and gross property expenses.

Group statement of financial position at
31 March 2017
Assets
Investment properties 11 993 956 1 132 968 13 126 924 350 254 350 254 13 477 178
Add: Lease commissions 20 267 – 20 267
11 993 956 1 132 968 13 147 191 350 254 350 254 13 497 445
Goodwill 48 218 48 218 14 791 14 791 63 009
Investment properties held-for-sale 76 632 76 632 76 632
12 042 174 1 209 600 13 272 041 365 045 365 045 13 637 086
Add:
Investment property under development 51 191 51 191
Equity investments 1 366 239 1 366 239
Investment in associate – 780 347 780 347
Furniture, fittings,computer equipment
and intangible asset 14 049 14 049
Available-for-sale financial asset 23 855 23 855
Derivative financial instruments 3 174 300 3 474 3 474
Loans receivable 38 110 38 110
Deferred taxation assets 14 341 14 341
Trade and other receivables 256 243 162 256 405
Taxation refundable 1 666 1 666
Cash and cash equivalents 1 304 585 25 360 1 329 945
Total assets 17 516 708
Equity and liabilities
Stated capital 7 282 863 687 951 7 970 814 7 970 814
Interest-bearing borrowings 3 448 939 325 792 3 774 731 165 440 165 440 3 940 171
10 731 802 1 013 743 11 745 545 165 440 165 440 11 910 985
Add:
Other components of equity and
retained earnings 5 127 731 12 880 5 140 611
Non-controlling interest 73 367 73 367
Derivative financial instruments 23 861 2 254 26 115 26 115
Deferred taxation liabilities 933 933
Trade and other payables 349 072 5 298 354 370
Current taxation liabilities 8 531 361 8 892
Shareholder for dividend 1 435 1 435
Total equity and liabilities 17 516 708

Calculation of distributable earnings
31 March 31 March
2018 2017 Variance
R000 R000 %
Property revenue 1 561 798 1 461 345 6.87
Property expenses (net of recoveries) (252 723) (215 113) (17.48)
Net profit from property operations per segmental
report excluding straight-line rental income accrual 1 309 075 1 246 232 5.04
Corporate administration expenses (127 474) (96 155) (32.57)
Investment and sundry income 323 255 198 523 62.83
Operating profit before finance costs 1 504 856 1 348 600 11.59
Finance costs (367 808) (362 074) (1.58)
Profit before equity-accounted income 1 137 048 986 526 15.26
Profit share of associate 95 485 45 251 111.01
Profit before taxation 1 232 533 1 031 777 19.46
Taxation (10 668) (9 286) (14.88)
Profit for the year 1 221 865 1 022 491 19.50
Costs of terminating interest rate swap (3 250) – (100.00)
Profit on sale of subsidiary – 54 813 (100.00)
Net profit attributable to non-controlling interests (10 303) (37 130) 72.25
Attributable to Vukile group 1 208 312 1 040 174 16.16
Adjustments on consolidation – 1 552 (100.00)
Non-IFRS adjustments
Shares issued cum dividend 35 019 31 847 9.96
Shares in Castellana subsidiaries acquired cum dividend 44 940 6 828 558.17
Dividends accrued on listed investments – 7 195 (100.00)
Dividends accrued on listed associate net of share of income 19 105 22 085 (13.49)
Asset management income – 8 000 (100.00)
Available for distribution 1 307 376 1 117 681 16.97
Proposed dividend (cents per share) 168.82 156.75
Number of shares in issue at 31 March 784 766 367 701 885 532

Notes to the summarised financial statements
for the year ended 31 March 2018

1. Measurements of group fair value
1.1 Financial instruments
The financial assets and liabilities measured at fair value in the statement of financial position are grouped into
the fair value hierarchy as follows:
March 2018 March 2017
Level 1 Level 2 Total Level 1 Level 2 Total
GROUP R000 R000 R000 R000 R000 R000
ASSETS
Investments 1 384 645 – 1 384 645 1 366 239 – 1 366 239
Available-for-sale financial assets 79 152 – 79 152 55 342 – 55 342
Derivative financial instruments – 26 039 26 039 – 3 474 3 474
Total 1 463 797 26 039 1 489 836 1 421 581 3 474 1 425 055
LIABILITIES
Available-for-sale financial
liabilities – (45 053) (45 053) – (31 487) (31 487)
Derivative financial instruments – (131 479) (131 479) – (26 115) (26 115)
Total – (176 532) (176 532) – (57 602) (57 602)
Net fair value 1 463 797 (150 493) 1 313 304 1 421 581 (54 128) 1 367 453

Measurement of fair value
The methods and valuation techniques used for the purpose of measuring fair value are unchanged compared to the
previous reporting period.

Investments
This comprises shares held in listed property companies at fair value which is determined by reference to quoted
closing prices at the reporting date.

Available-for-sale financial assets
The available for-sale financial asset comprises the long-term reimbursement right, which is legally offset by the
long-term employee benefit liability. This comprises equity-settled share-based long-term incentive reimbursement
rights stated at fair value. Fair value has been determined by reference to Vukile’s quoted closing price at the
reporting date after deduction of executive and management rights.

Derivative financial instruments
The fair values of these derivative contracts are determined by Absa Capital, Rand Merchant Bank, Standard Bank,
Nedbank Limited and Investec Bank Limited for Southern Africa, and Banco Popular, Banco Santander and Caixa Bank
for Spain, using a valuation technique that maximises the use of observable market inputs. Derivatives entered
into by the group are included in level 2 and is consistent with interest rate swap and forward exchange contracts.

1.2 Non-financial assets
The following table reflects the levels within the hierarchy of non-financial assets measured at fair
value at 31 March 2018:
2018 2017
Level 3 Level 3
GROUP R000 R000
ASSETS
Investment properties 19 102 209 13 497 445
Investment properties under development 54 476 51 191
Investment properties held for sale 10 500 76 632

Fair value measurement of non-financial assets (investment properties)
The fair values of commercial buildings are estimated using an income approach which capitalises the estimated
rental income stream, net of projected operating costs, using a discount rate derived from market yields.
The estimated rental stream takes into account current occupancy levels, estimates of future vacancy levels,
the terms of in-place leases and expectations of rentals from future leases over the remaining economic life
of the buildings.

The most significant inputs are the discount rate and the reversionary capitalisation rate. The inputs used in the
valuations at 31 March 2018 were:
2018 2017
Reversionary Reversionary
Discount rate capitalisation rate Discount rate capitalisation rate
Weighted Weighted Weighted Weighted
GROUP Range average Range average Range average Range average
South Africa 12.2% to 13.4% 7.5% to 8.6% 12.8% to 14.0% 8% to 9.1%
17.3% 12.8% 19.6% 15.7%
Spain 7.5% to 8.8% 5% to 6.1% 9.05% to 9.22% 6.17% to 6.46%
10.3% 9.1% 9.79% 7.48%
The estimated fair value would increase/(decrease) if the expected market rental growth was higher/(lower),
expected expense growth was lower/(higher), the vacant periods were shorter/(longer), the occupancy rate was
higher/(lower), the rent-free periods were shorter/(longer), the discount rate was lower/(higher) and/or the
reversionary capitalisation rate was lower/(higher).

JSE sponsor: Java Capital

NSX sponsor: IJG Group, Windhoek, Namibia

Executive directors: LG Rapp (chief executive), MJ Potts (financial director),
HC Lopion (executive director: asset management), GS Moseneke
Non-executive directors: AD Botha (Chairman), PS Moyanga, SF Booysen, RD Mokate, H Ntene,
NG Payne, HM Serebro, B Ngonyama
There has been a change to the board of directors since the release of the previous results announcement,
namely the appointment of Ms B Ngonyama.

Registered office: Ground Floor, One-on-Ninth, Corner Glenhove Road and Ninth Street, Melrose Estate, 2196.

Company secretary: J Neethling

Transfer secretaries: Link Market Services South Africa (Pty) Ltd, Braamfontein, Johannesburg

Investor relations: Instinctif Partners, The Firs 302, 3rd Floor, Corner Craddock Avenue and Biermann Road,
Rosebank, Johannesburg, South Africa, Tel: +27 11 447 3030

Media relations: Marketing Concepts, 10th Floor, Fredman Towers, 13 Fredman Drive, Sandton, Johannesburg,
South Africa, Tel: +27 11 783 0700, Fax: +27 11 783 3702

www.vukile.co.za

Date: 30/05/2018 07:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (‘JSE’).
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.

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