Growthpoint Interactive Annual Report 2018

Office Portfolio Review Summary Growthpoint’s office portfolio achieved valuation like-for-like growth of $132.4 million (6.4%) over FY18, additional leasing of 17,092 sqm and maintained occupancy at 98%. The main drivers for office demand remained positive in FY18, with solid employment growth and business confidence and conditions tracking above long run averages. Most major office markets recorded positive net absorption over the period, leading to downward pressure on incentives and rent growth in most Eastern seaboard office markets. Acquisitions After a significant transactional year in FY17, there were no direct office transactions made in the year to 30 June 2018. Post-balance date on 18 July 2018 Growthpoint entered into transaction documents for the acquisition of 836 Wellington Street, West Perth for $91.3 million reflecting a market yield of 6.25%. The property is 100% leased to the Commonwealth of Australia (Department of Home Affairs) with a remaining lease term of 8.3 years 1 and annual fixed rent reviews of 3.75%. Built in 2009, the property is a modern A-Grade office building consisting of 11,973 sqm over 6 floors with 138 secured car bays. The building has strong environmental credentials with a 5.5 Star NABERS Energy rating and a 4 Star NABERS Water rating. Leasing FY18 was another successful period of leasing for Growthpoint with 6.0% of total office portfolio lettable area leased over the year. Highlights include: t t Renewal of lease to Westpac Banking Corporation at 7 Laffer Drive, Bedford Park, South Australia for a further 7 years. The lease renewal to Westpac begins in July 2018 and comprises 6,343 sqm with fixed rent increases of 3.00% per annum. Office portfolio key statistics (as at 30 June 2018) — — $2,209.3 million total value — — 286,430 sqm total lettable area — — 6.0% weighted average capitalisation rate — — 66% of total property portfolio — — 98% occupancy — — 5.5 year WALE — — 3.5% WARR — — 26 assets Tenants by Industry (%) by income, as at 30 June 2018 Government Resources, Infrastructure & Construction IT, Media & Telecommunications Financial Services Retail Other Consumer & Business Services Education Health 30 17 15 11 11 8 6 2 Geographic diversity (%) by property value, as at 30 June 2018 NSW QLD VIC ACT SA TAS 32 29 27 7 4 1 Top ten office tenants by passing rent, as at 30 June 2018 % WALE (yrs) NSW Police 13 5.9 Commonwealth of Australia 8 7.8 Country Road Group 6 13.9 Samsung Electronics 4 3.7 Lion 4 5.8 ANZ Banking Group 4 1.7 Jacobs Group 4 7.0 Queensland Urban Utilities 3 4.8 Fox Sports 3 4.5 Monash University 3 2.5 Total / weighted Average 52 6.4 Balance of portfolio 48 4.4 Total portfolio 100 5.5 1. From October 2018. Growthpoint Properties Australia 2018 Annual Report 24