Growthpoint Interactive Half Year Report 2019

Introduction from Chairman and Managing Director. Office and Industrial sectors continue to outperform. It is with pleasure that we present our results for the six months to 31 December 2018 which show further progress of Growthpoint’s strategy to own well- leased, well-located commercial real estate that contribute to growing income returns for our Securityholders. Our continued focus on acquisitions, portfolio repositioning and property enhancement helped deliver funds from operations of 12.5 cps, the same as the prior corresponding period, and a distribution to Securityholders of 11.4 cps, a 3.6% increase on the prior corresponding period. This places us well on track to meet our upgraded FY19 FFO guidance of at least 24.8 cps and FY19 distributions of 23.0 cps. Statutory profit for the period was $188.8 million, down 8.9% on the prior corresponding period, with property revaluation gains offset by the non-repeat of profits generated from asset sales in the prior corresponding period. We successfully completed several significant transactions in the half year, including the acquisition of 100 Skyring Terrace, Newstead, QLD for $250 million 2 in December 2018, funded in part by a $135 million Rights Offer which achieved substantial support from new and existing Securityholders. The property is a modern, highly green credentialed building, completed in 2014, fully leased with two major ASX-listed tenants. It has a long weighted average lease expiry (WALE) and attractive rental growth profile – characteristics very much in line with the Group’s strategy of delivering income growth to Securityholders. Settlement of the acquisition of 836 Wellington Street, West Perth, WA occurred in October 2018. This acquisition added another well leased, modern, A-Grade building to Growthpoint’s growing office portfolio, which is now valued at $2.7 billion. The acquisition of West Perth was Growthpoint’s first office investment in Perth and came after a long period of due diligence on the Perth office market. The removal of substantial sub-leasing space from the market over the past 12-18 months along with subdued recent development activity provides for a more attractive entry point into the Perth office market. These acquisitions continue Growthpoint’s portfolio and income enhancement strategy. Growthpoint owns the largest metropolitan office portfolio in the A-REIT sector, together with CBD office assets and a large industrial / logistics portfolio totalling $1.2 billion. The acquisitions add to the defensive characteristics of the portfolio, which include a history of high occupancy levels, a long WALE and quality listed company and government tenants. Construction has commenced at Botanicca Corporate Office Park in Richmond, VIC for a new office development comprising approximately 19,300 square metres (sqm) of A-grade office accommodation across two towers. The development is tracking ahead of schedule with completion expected in the first half of 2020. We are receiving strong engagement from a number of prospective tenants and will update the market as leasing progresses. In January we welcomed the opportunity to again partner with Woolworths in the expansion of one of their key distribution Geoff Tomlinson Independent Chairman & Director Timothy Collyer Managing Director 1. Source: UBS Investment Research: Annual compound returns to 31 December 2018. 2. Before acquisition costs. Total Securityholder return over 1, 3, 5 & 10 years (%) 1 1 year 3.3 16.7 3 years 7.6 13.7 5 years 12.5 16.1 10 years 10.7 16.8 Growthpoint S&P/ASX 300 A-REIT accumulation index 4 Growthpoint Properties Australia | 2019 Half Year Report