Growthpoint Interactive Half Year Report 2019

Office conditions remain favourable, with good employment growth and positive net absorption in most major office markets. Vacancy rates are low, with national CBD office market vacancy currently 8.6% 1 , down from 10.4% 1 12 months ago. This helped support growth in face and effective rents in major markets, with strong growth recorded in the second half of 2018 in a number of markets including Melbourne Fringe (3.0%) 1 , Melbourne South East Suburbs (2.4%) 1 and Parramatta (4.1%) 1 . Appetite for Australian office assets remains high, with office yields still attractive on a relative basis to other developed countries and a continuing positive spread to long-term bond yields. These positive conditions drove like-for- like valuation growth of $124.9 million (5.7%) over the six months to 31 December 2018 across Growthpoint’s office portfolio. Additional leasing of 4,185 sqm was achieved and occupancy was maintained at 98%. Acquisitions On 31 October 2018 Growthpoint acquired 836 Wellington Street, West Perth, WA for $91.3 million (before acquisition costs) reflecting a market yield of 6.25%. The property is 100% leased to the Commonwealth of Australia (Department of Home Affairs) with a 8.1 year WALE and annual rent reviews of 3.75% 2 . 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. On 7 December 2018, Growthpoint acquired 100 Skyring Terrace, Newstead, QLD for $250 million (before acquisition costs). The property is a modern building, Office portfolio review. Office portfolio lease expiry profile (%) per financial year, by income FY22 10 FY23 9 FY24 25 FY25+ 37 FY21 6 FY20 10 FY19 1 Vacant 2 Office portfolio geographic diversity (%) by property value, as at 31 December 2018 NSW 28% QLD 34% VIC 25% ACT 6% SA 3% WA 3% TAS 1% completed in 2014, fully leased with two major ASX-listed tenants, an initial passing yield of 6.1%, a 7.4 year WALE and attractive rental growth profile with a WARR of 3.9% per annum. The building also has high green credentials, with a 5.5 Star NABERS Energy Rating. Leasing HY19 was another successful period of leasing for Growthpoint with new or extended leasing completed at seven properties across 4,185 sqm with an average annual rent review of 3.7% and an average lease term of 6.6 years. t t Renewal of lease to Jacobs Group (Australia) at A1, 32 Cordelia Street, South Brisbane, QLD for a further 7.9 years. The lease renewal to Jacobs Group began on 1 November 2018 and comprises 1,311 sqm with fixed rent increases of 3.75% per annum. t t Further leasing success at 333 Ann Street, Brisbane, QLD bringing total occupancy to 96%, from 44% at 30 June 2015. Four new leases were signed, the largest being across 867 sqm on Level 12 to EML payments for 7 years. The lease commenced on 10 August 2018 and has fixed rent increases of 3.75% per annum. 1. JLL, Australian National Office Overview and Outlook Report, 4Q17 and 4Q18. 2. 3.75% annual escalations until expiry with a market rent review on 1 February 2021 (market rent review features ratchet clause). 75 Dorcas Street, South Melbourne, VIC 12 Growthpoint Properties Australia | 2019 Half Year Report