Real Estate Investor Magazine South Africa July 2018

LISTED LISTED Making sense of REITs A South African REIT is a listed property investment vehicle that is similar to internationally recognised REIT structures from around the world. Listed Company REITs or Trust REITs are publicly traded on the JSE REIT board and qualify for the REIT tax dispensation. Delta Property Fund CEO: Sandile Hopeson Nomvete Delta is a specialist, REIT status approved property fund listed on the Johannesburg Stock Exchange since 2012. The Fund is black-managed and substantially black-owned, providing investors with unique exposure to commercial assets with a predominant sovereign underpin. Sandile is a graduate of the Property Development Programme from the UCT Graduate School of Business, and holds an Executive Development Programme and Finance for Non-Fi- nancial Managers Diploma from the WITS Graduate School of Business. Delta’s primary business is long-term investment in quality, rental generating properties. Delta property portfolio is spread across office, retail and industrial sec- tors with particular emphasis on government-tenanted office portfolio which is in line with the Fund’s strategic objectives. He co-founded Motseng Investment Holdings which eventually listed in 2012 as Delta Property Fund. Sandile has nearly a decade and a half of experience in executive positions, with his entrepreneurial and forward thinking persona propelling him into becoming one of South Africa’s leading business executives. At listing in November 2012, Delta had a total of 20 well established mainly AAA to B grade high-quality office buildings located across the country. He also serves as Chairman of Maradelta and is an independent non-executive director and member of the audit committee at KAP Industrial Holdings. About the fund At that time, the portfolio was independently valued at R2.1 billion. The Fund intends to continue focusing on strengthening the quality of its property portfolio, through acquisitions as well as refurbishments and upgrades to enhance their position as the preferred landlord for government and SARS. Delta’s B-BBEE credentials positions it well to leverage the advantages of government tenanted buildings, such as single tenant occupancy, long-term leases, fixed lease escalations for the duration of the lease and a sovereign underpin. Stenprop About the fund Stenprop is a listed property company with assets currently located in the UK, Germany and Switzerland. Stenprop is dual-listed on the London Stock Exchange (LSE) and the Johannesburg Stock Exchange (JSE). Stenprop’s objective is to deliver sustainable growing income to its investors. The Company’s investment strategy for achieving this objective has always been to identify and invest in sectors and assets that have positive growth fundamentals and, where there is an opportunity, to add value and grow earnings through active asset management. Following the successful integration of the C2 Capital team and the significant growth in earnings experienced from the industrials.co.uk portfolio since acquisition, Stenprop took the strategic decision that its objective to deliver sustainable, growing income to shareholders would be best achieved by becoming a specialised UK MLI (multi-let industrial) property company. This stra- tegic repositioning means that Stenprop intends, over the next few years (‘the transition period’), to sell all, or substantially all, of its non-MLI assets and utilise the sale proceeds to build a focused UK MLI business. CEO: Paul Arenson Paul founded Stenham Property Limited, a property fund management business, for the Stenham Group in 1995. As managing director he was responsible for driving the develop- ment of the business and, by the time that the Stenham Group was sold to Peregrine Holdings Limited (a financial services business listed on the JSE) in 2007, Stenham Property had in excess of £2 billion of assets under management. In 2014 Paul, together with CFO Patsy Watson, orches- trated the sale of Stenham Property and a substantial part of the assets under management, by way of a share deal to a JSE and BSX listed entity, now known as Sten- prop. Paul was appointed as the CEO of Stenprop and continues in that position. Paul graduated as a lawyer at Edward Nathan & Friedland Inc in South Africa. In 1990 he moved from South Africa to London where he joined Titmuss Sainer Dechert (now called Dechert) in their corporate depart- ment. He subsequently became a partner at the London office of Sonnenberg Hoffman & Galombik in 1994, prior to joining the Stenham Group in 1995. Results for the year ended 28 February 2018 105 properties Fair value of property portfolio of R11.5b Average value of property R109.6m GLA 952 428 sqm Vacancy rate of 11.8% LTV 41.3% Tenant profile consists of office - sovereign (72.8%), office - other (16.4%), retail (6.9%), and industrial (3.9%) Footprint in all 9 provinces of the country Results for the year ended 31 March 2018 Including assets held for sale, the company’s real estate portfolio comprised an interest in 76 properties Portfolio valued at £733.6 million , 48.5% by value in the United Kingdom, 38.8% in Germany and 12.7% in Switzerland. GLA 415 105 sqm Tenant profile consists of office (35%), retail (26%), and MLI (24%) LTV 49.2% Converted to UK REIT status on 1 May 2018 32 JULY/AUGUST 2018 SA Real Estate Investor Magazine

Real Estate Investor Magazine South Africa July 2018 | Page 34