Growthpoint Interactive Annual Report 2018

Movements in NTA per stapled security ($) Long-term growth in FFO and distributions (cps) 30 June 2017 Property revaluations P rofit on property sale Financial instruments revaluations Equity raising (DRP) & retained earnings 30 June 2018 +$0.04 +$0.25 +$0.01 +$0.01 $3.19 $2.88 10.8% increase since 30 June 2017 Increasing Distributions and FFO per security The graph at right illustrates the increase in distributions and FFO per security over five years, including FY19 guidance. Growthpoint has been able to achieve its medium-term target of growing distributions by 3%-4% annually, based on a high percentage of fixed income increases in leases (WARR of 3.3%) and a high proportion of debt costs being fixed. This, along with low operating expenses of approximately 0.4% of average gross assets per annum, has allowed the Group to grow distributions at a CAGR of 3.9% for the five years up to and including FY18. Importantly, as the graph shows, over the same time period Growthpoint has been able to grow FFO at a higher rate of 4.0%, ensuring that distribution growth is covered by earnings growth. Outlook for FY19 Subject to market conditions, the Group expects FY19 FFO to be at least 24.6 cents per stapled security and distributions to be 23.0 cents per stapled security, representing a 3.6% increase in distributions to Securityholders. This is within the Group’s medium-term target range of 3-4% increase in distributions per security growth per annum and equates to a FY19 payout ratio to FFO being a maximum 93.5%. FY19 guidance takes into account the West Perth acquisition announced 18 July 2018, up to $110 million of asset sales expected to take place throughout FY19 and the Dividend Reinvestment Plan activated for the August 2018 distribution. Growthpoint will continue to distribute as much FFO as is reasonably prudent to Securityholders. In determining its payout ratio, Growthpoint will consider its capital expenditure, tenant incentive and working capital requirements over the medium term as well as current and anticipated business and financial conditions, especially as they relate to raising debt and equity capital. Financial Management continued FY14 FY15 FY16 FY17 FY18 FY19 18.0 19.0 20.0 21.0 22.0 23.0 24.0 25.0 26.0 FFO per security Distributions per security 20.2 19.0 19.7 20.5 21.5 22.2 23.0 21.8 22.9 25.5 25.0 At least 24.6 4.0% CAGR 3.9% CAGR Growthpoint Properties Australia 2018 Annual Report 16