Growthpoint Interactive Annual Report 2018

Financial Management Further progress on balance sheet strategy 1. Gearing calculation changed during the period from interest bearing liabilities divided by total assets to interest bearing liabilities less cash divided by total assets less cash. This change brings Growthpoint’s gearing calculation more closely in line with industry peers. 2. Gearing at 30 June 2018 below target gearing range. See page 17 of this report for pro forma. Securityholders benefited from a number of accretive acquisitions made over the year which helped to improve on our initial Funds From Operations guidance by 5.9% (from at least 23.6 cents per security), while asset sales above book value and strong revaluation gains supported further reductions in gearing, leaving the balance sheet well positioned to take advantage of the right opportunities. Highlights for FY18 t t FFO of 25.0 cents per security t t Distributions of 22.2 cents per security equating to a payout ratio of 88.8% t t Gearing of 33.9%, down 460 basis points from 30 June 2017 1 t t NTA per security of $3.19, 10.8% above 30 June 2017 t t Maintained a weighted average debt maturity of 5.0 years; and t t Increased the overall level of fixed debt to 82%, from 75% at 30 June 2017 17 The chart on page 17 tracks the events that impacted gearing during the year. At financial year end the Group held $320 million of undrawn debt facilities as it pursues a number of growth opportunities. Over time, as part of a prudent gearing strategy, holding approximately $100 million in undrawn debt will to allow for flexibility in transactions, while aiming to minimise the cost burden of holding undrawn debt lines. Fixed debt percentage increased to 82% At 30 June 2018, fixed debt was 82%, up from 75% at 30 June 2017. The weighted average fixed debt maturity is 5.5 years which means a high percentage of debt is protected for the medium term against any future interest rate rises. FY17 1 38.5% FY18 2 33.9% 4.6% Maintain gearing within 35%-45% range FY17 5.0yrs FY18 5.0yrs Maintained average debt maturity FY17 75% FY18 82% 7% Increase fixed debt percentage Strategic Execution Progress on Financial Management strategy Over the year the Group extended $515 million of near term bank debt expiring in mid-FY19 to maintain a weighted average debt maturity of 5 years. After significant work in FY17 to further diversify the Group’s debt funding profile, the Group now retains a good balance between shorter term, more flexible bank debt and longer term fixed debt. The Group will continue to act quickly and decisively on upcoming expiries, the first being in September 2020, and will look to all available debt markets for the best solution for Securityholders when new debt is required. Gearing 33.9% as at 30 June 2018 Gearing as at 30 June 2018 was 33.9%, down from 38.5% 1 as at 30 June 2017, below the bottom of the target range of 35% - 45%. Growthpoint Properties Australia 2018 Annual Report 15 Financial Report Portfolio Review Financial Management Business Overview Governance Additional Information