VUKILE PROPERTY FUND LIMITED - Unaudited condensed24 Nov 2016
VKE 201611240010A
Unaudited condensed consolidated interim results for the six months ended 30 September 2016

Vukile Property Fund Limited 
(Incorporated in the Republic of South Africa)
(Registration number: 2002/027194/06) 
JSE share code: VKE
ISIN: ZAE000056370 
NSX share code: VKN
(Granted REIT status with the JSE)
(Vukile or the group or the company)

Unaudited condensed consolidated interim results for the six months ended 30 September 2016

HIGHLIGHTS
- Excellent progress in achieving strategic objective of becoming a retail-focused fund in South Africa
- Vukile, Synergy and Arrowhead transaction approved by shareholders
- Gearing ratio of 23.9% with debt fully hedged
- Sale of Sovereign portfolio R1.18 billion
- Successful refinance of R1.1 billion debt and R400 million equity raise during the reporting period
- Dividend of 67.65 cents per share  7.0% increase for the six months ended 30 September 2016

1. Nature of operations
   Vukile is a property holding and investment company through the direct and indirect ownership of immovable property.
   The group holds a portfolio of predominantly direct retail property assets, as well as strategic shareholdings in 
   listed REITs. The company is listed on the JSE Limited and the NSX in Namibia under the Retail REITs sector.

2. Significant events and transactions 
   During this reporting period, the following significant transactions were effected:
   2.1 Vukile announced on 29 August 2016 that it had entered into agreements with inter alia, Arrowhead Properties 
       Limited (Arrowhead) and Synergy Income Fund Limited (Synergy) to effect the repositioning of Vukile, Synergy 
       and Arrowhead (the transaction).  

       Through a series of inter-related transactions, the asset management function of Synergy will be internalised 
       through the sale of Vukile Asset Management (Pty) Ltd (VAM) to Synergy for the issue of new Synergy B shares to
       Vukile with a value of c.R155 million. Further, Vukile will acquire the retail assets of Synergy for R2.47 billion 
       and will settle the transaction through the transfer of a portfolio of office and industrial assets and R18 million
       in cash to Synergy.      
 
       The transaction has been approved by shareholders and the only outstanding condition precedent is Competition 
       Commission approval.

       Post implementation of the transaction, Vukile will have achieved its goal of becoming a specialist retail fund in
       South Africa while Synergy will be positioned as a specialist high-yielding, high-growth diversified fund under the
       leadership of the Arrowhead stable who have significant experience in managing funds of this nature. In due course
       Synergy will be renamed as GemGrow Properties Ltd.

   2.2 Vukile announced previously that it had disposed of the property letting enterprises in respect of the five properties
       known as Pretoria De Bruyn Park, Pretoria Navarre, Bloemfontein Fedsure House and Pretoria Koedoe Arcade (the 
       Sovereign portfolio) and Pretoria Arcadia Suncardia for a sale consideration of R1.18 billion, which amount was paid 
       to Vukile in cash on 31 August 2016, the date of transfer. 
 
   2.3 The refinancing/repayment of bank debt, DMTN corporate bonds and commercial paper amounting to R1.1 billion.

   2.4 The raising of R400 million equity in April 2016 through an accelerated bookbuild whereby 23 668 639 shares were 
       issued at R16.90 per share, which equated to a 2% premium to the 30-day VWAP of R16.54. 
 
3. Summary of Financial Performance                                     
   The directors of Vukile are pleased to report that the distribution for the six months ended 30 September 2016 has 
   increased by 7.0% to 67.64754 cents per share (prior period: 63.22200 cents per share).  
  
   The group's net profit available for distribution amounted to R526 million for the six months to 30 September 2016 
   (September 2015: R457 million), which represents an increase of 15% over the comparable period.       
   
   Summary of financial performance:
                                                        September      September       March    
                                                             2016           2015        2016    
   Net asset value per share (cents)                        1 851          1 774       1 842    
   Dividend per share (cents)                               67.65          63.22      146.35    
   Loan to value ratio %(I)                                  28.0           32.0        31.9    
   Loan to value ratio net of available cash (%)             19.0           28.0        26.9    
   Gearing ratio (%)(II)                                     23.9           27.8        29.5    
   (I)  Based on directors' valuation of the group's property portfolio at 30 September 2016.
   (II) The gearing ratio is calculated by dividing total interest-bearing borrowings by total assets. 
   
   A reconciliation of profits available for distribution is set out below:
                                                         September       September          
                                                              2016            2015      Paragraph      Variance
                                                              R000            R000      reference             %    
   Property revenue                                      1 087 344       1 005 368                          8.2    
   Property expenses                                      (382 111)       (368 353)                        (3.7)   
   Net profit from property operations                     705 233         637 015             (a)         10.7    
   Asset management business-income                              -          11 886             (b)        (>100)   
   Corporate and asset management expenses                 (51 653)        (44 803)            (c)        (15.3)   
   Dividends received from investments                      16 763               -             (f)         >100    
   Operating profit before finance costs                   670 343         604 098                         11.0    
   Net finance costs                                      (166 693)       (145 961)            (d)        (14.2)   
   Profit before taxation                                  503 650         458 137                          9.9    
   Taxation                                                 (2 510)         (6 868)            (e)         63.5    
   Profit for the period                                   501 140         451 269                         11.1    

                                                         September       September                   
                                                              2016            2015                   
                                                              R000            R000                   
   Profit for the period                                   501 140         451 269                   
   Movement in fair value of hedges                           (635)              -                   
   Attributable to non-controlling interests               (19 932)        (24 996)                  
   Attributable to Vukile Group                            480 573         426 273                   
   Less: Distribution on shares issued post                            
   31 March 2016/2015                                      (19 675)        (48 188)                  
   Add: Non-IFRS adjustments                                                                         
   Shares issued cum dividend                               27 366          61 530                   
   Dividends accrued on investments                         33 848          13 302             (f)         
   Asset management income(I)                                4 000           4 000                   
   Available for distribution                              526 112         456 917                   
   Proposed distribution                                   467 203         405 351                   
   (I) Arising from the sale of the asset management business to Sanlam where the amounts receivable, over a two-year 
       period to October 2016, of R16 million were present valued and offset against the loss on sale in terms of IFRS 
       requirements.

   The above information has been extracted from the Unaudited condensed consolidated statements of profit or loss and 
   the Unaudited reconciliation of earnings to profit available for distribution.

   (a) Net profit from property operations
       The group's net profit from property operations, exclusive of straight-line rental accruals, has increased by 
       R68 million (10.7%) over the comparable period, from R637 million to R705 million.

       The contributions to this increase are made up as follows:
                                                         Rm        
       Stable portfolio                                26.5      
       Properties acquired in prior year               27.0      
       Synergy portfolio                                3.7       
       Sold properties                                  6.2       
       Net interest reclassified                        4.8       
                                                       68.2      
       Further details of the property portfolio performance are set out in paragraph 9.
     
       Doubtful debt allowance for tenant receivables
       The allowance for the impairment of tenant receivables has increased marginally from R28.0 million at 31 March 2016 
       to R28.5 million at 30 September 2016, which is considered adequate at this stage. The doubtful debt allowance is 
       expected to increase to approximately 1.79% of gross rental income for the year ending 31 March 2017 
       (March 2016: 1.34%). A summary of the movement in the impairment allowance for trade receivables is set out below:      
     
                                                                               R000    
       Doubtful debt allowance 1 April 2016                                  28 010    
       Allowance for receivables impairment for the six-month period          6 151    
       Receivables written off as uncollectible                              (5 623)   
       Impairment allowance 30 September 2016                                28 538    
       Bad debt write-off per the statement of profit or loss                 5 950    

   (b) Asset management business income
       As the asset management agreement of an external portfolio was terminated in a prior period no income is reflected
       under this item.

       Ongoing project management fees of R4 million were received in April 2016 and the final R4 million fee will be 
       received in October 2016, under the sale of the asset management business. In terms of IFRS these discounted fees 
       were offset against the loss on the sale of the asset management business and are not reflected in this period's 
       results, but are available for distribution as these fees are represented by cash.

   (c) Corporate administrative and asset management expenditure
       Group corporate administrative expenditure of R52 million is R7 million higher than the previous year's 
       expenditure of R45 million.

       The increase is partly due to:
       - aborted transactional costs being R2.6 million higher than the prior period; and
       - consulting fees also exceeded the prior period by R1 million.

       Excluding these items corporate administration and asset management expenditure reflects a 7.6% increase over the 
       prior period.

   (d) Finance costs net of investment income
       Group finance costs net of interest income have increased by R21 million from R146 million in comparable period
       to R167 million.

       A more detailed breakdown is set out below.

       Group finance costs have increased by R31 million, from R180 million to R211 million. The increase in finance 
       costs is primarily due to interest arising on additional debt of R1.15 billion raised to part finance the 
       acquisitions of Soshanguve Batho Plaza, Silverton Industrial Warehouses, Tzaneen Maake Plaza (40%), Vereeniging 
       Bedworth Centre and the 26% stake in Atlantic Leaf for a full six-month period, which equated to an additional 
       R21 million.      

       Furthermore, the impact of interest rate increases on variable rate debt amounting to R7 million on R150 million 
       development debt which was previously capitalised and now expensed post the completion of Phase I of East Rand
       Mall has also contributed to the increase in finance costs.

       This increase was offset, to some extent, by interest saved on debt repaid during the period, primarily in 
       September 2016.

       The average cost of finance for the six months to 30 September 2016 equates to approximately 8.7%, with all of 
       interest-bearing term debt hedged.

   (e) Taxation
       The first half tax accrual of R2.5 million is lower than the comparable period of R6.9 million as a result of a 
       positive timing difference of R3.0 million arising in a subsidiary. This tax comprises normal tax and deferred 
       tax on temporary timing differences. At year end, it is anticipated that taxes of approximately R9 million will 
       be payable. The bulk of the normal tax payable arises in respect of the Namibian subsidiaries.

   (f) Dividends receivable from investments
                                                                    Fairvest      Atlantic Leaf        Total    
                                                                        R000               R000         R000    
       Dividends received during interim period                       16 763          27 860(I)                 
       Less: Attributable to prior year                              (16 763)           (20 510)                
       Dividends accrued for six months to 30 September 2016          17 948             25 313                 
       Non-IFRS adjustments                                           17 948             32 663       50 611    
       Reflected as follows:                                                                                    
       Dividends received from investments                                                            16 763    
       Non-IFRS adjustments - dividends accrued(II)                                                   33 848    
                                                                                                      50 611    
       (I)  In terms of IFRS dividends received from an associate reduce the carrying value of the 
            investment in the associate.                                                    
       (II) Dividends accrued have been reflected in the Unaudited condensed consolidated interim 
            results(a), and in the unaudited reconciliation of earnings to profit available for 
            distribution(b), as follows:                                                    
            (a)  Share of income from associate                                                       28 228    
            (b)  Dividends accrued from listed investment and associate                                5 620    
                                                                                                      33 848    

       Fairvest Property Holdings Limited (Fairvest)
       Fairvest is fair valued at 30 September 2016 at R375.4 million or R1.83 per share, representing a capital 
       appreciation of 25% over the cost of the investment.

       Dividends received and accrued for the six months ended 30 September 2016 amount to R17.9 million.

       The dividends paid by Fairvest for the year ended 30 June 2016 were 10.3% higher than the prior year. Furthermore,
       26.2 million shares in Fairvest were acquired on 24 April 2015, and are accounted for in respect of a full 
       six-month period ended 30 September 2016 as compared to five months in the prior comparable period.

       Atlantic Leaf Properties Limited (Atlantic Leaf)
       Vukile holds a 26% shareholding in Atlantic Leaf. In terms of IFRS, Atlantic Leaf is regarded as an associate of
       Vukile. As such all dividends received reduce the carrying value of the investment in Atlantic Leaf.

       However, as dividends received are represented by cash these dividends are regarded as distributable.

       95% of the dividends receivable in November 2016 in respect of Vukile's holding in Atlantic Leaf on the Mauritian
       Stock Exchange of GBP675 000 have been sold forward at a rate of R21.30:. Likewise, 100% of dividends receivable 
       in respect of the six months ending 28 February 2017 and payable around May 2017, are also the subject of a forward 
       exchange contract at R21.30:.

       Synergy
       Vukile holds 9.95% and 89.55% of Synergy A and B shares respectively.

       Synergy has declared a dividend of 49.68891 cents per A share, which represents a 5% increase over the prior period 
       and 29.67129 cents per B share, which represents an 8.6% decrease over the prior period dividend.

       The reduction in the B dividend is mainly attributable to the additional interest costs incurred in increasing the 
       percentage of hedged debt from c.48% at 31 March 2016 to 66% at 30 September 2016, together with the impact of rising 
       interest rates in respect of the unhedged debt.

4. Capital Management
   The group's finance strategy is to minimise funding costs and refinance risk.

   The business objectives that are necessary to implement this strategy are summarised as follows:

                                                                                  September              March         September    
   Strategy                                                                            2016               2016              2015    
   Diversify funders to at least three providers                               Five funders       Five funders      Five funders    
   Diversify funding structures to incorporate, where appropriate:               % of total         % of total        % of total    
   Bank debt(I)                                                                         68%                69%               57%    
   Secured bonds                                                                        19%                19%               26%    
   Commercial paper/unsecured bonds                                                     13%                12%               17%    
                                                                                       100%               100%              100%    
   Spread expiry terms of all interest-bearing debt to c.25% per annum             Achieved           Achieved          Achieved    
   Hedge or fix more than 75% of interest-bearing debt                                 100%(II)          83.5%(II)         88.0%(II)    
   Maximise interest income and limit negative carry                    Achieved through increase in access facilities repayable 
                                                                                                             without break costs   

   (I)  The increase in the use of bank debt from September 2015 has arisen due to the volatility experienced in the capital markets 
        and the consequent higher margins becoming less competitive.
   (II) Vukile and its subsidiaries - excludes development debt and commercial paper.

   Total interest-bearing debt is currently fully hedged. The all-in cost of finance is increasing as existing debt is re-financed 
   and new bank debt drawn down to finance new acquisitions. The average forecast borrowing cost for the March 2017 financial year is 
   estimated at 8.6% - 8.7% per annum. The cost of debt on new acquisitions in South Africa is estimated at 9.25% - 9.70% per annum.      

   The Global Credit Rating Company (Pty) Ltd (GCR) has recently re-affirmed an A corporate rating for Vukile and an AA+ (RSA) 
   rating on Vukile's senior secured bonds.

5. Interest rate hedging
   At 30 September 2016, net debt, excluding development loans and commercial paper, amounted to R4.1 billion. Swaps totalling 
   R4.17 billion have been concluded.

   A number of swaps have been extended during the six-month period ended 30 September 2016 totalling R1.6 billion at an annual 
   cost of R4.8 million, based on the difference between the existing swap rates and the new extended swap rates.

   New swaps with a nominal value of R320 million were also concluded during this period at an annual cost of R1.6 million, 
   based on the difference between the current three-month JIBAR and the swap rates.

   The current swaps in place represent 3.4 years' cover as compared to 3.0 years at 31 March 2016.

   Swap expiry profile per calendar year (excluding Synergy)   2017    2018     2019     2020    2021    2022    Total    
   Nominal value (Rm)                                           681     256      504      645     940     501    3 527    
                                                              19.3%    7.3%    14.3%    18.3%   26.6%   14.2%     100%    

   Synergy has R647 million swaps and fixed debt in place to cover debt of R937 million expiring between June 2016 and September 2020. 
   The existing facilities and swaps will remain in Synergy post the conclusion of the transaction.

   Debt refinancing during the six months ended 30 September 2016
   > Bond refinancing
      R200 million of corporate bonds were repaid on 8 May 2016.
      R255 million of commercial paper was repaid during the period under review, partly by way of a R170 million two-year unlisted 
       unsecured note maturing 1 April 2018, at a margin of 1.65% plus a swap cost of 7.93%, totalling 9.58% and the balance by way 
       of cash.
      R140 million of six-month commercial paper was refinanced at a fixed rate of 8.358%, maturing 29 March 2017.
   > Bank refinancing
      R163.3 million bank debt was extended from April 2016 to September 2016 and repaid in September 2016; and
      a further R375 million bank term and access facility was repaid in September 2016, utilising part of the R1.1 billion proceeds 
       from the sale of the Sovereign portfolio.

   Debt repayment profile
   The graphs below set out the various tranches of debt payable by the group over the next eight years: 

   The company's borrowing capacity is unlimited in terms of its Memorandum of Incorporation (MOI). The group's loan to value ratio 
   at 30 September 2016, based on the directors' valuations of the property portfolio, was 27.0% (September 2015: 32%) compared to the 
   bank's covenants of 50%, the DMTN covenants of 40% in respect of those properties mortgaged as security under the DMTN programme and 
   45% in respect of total group debt as a percentage of the value of total group investment properties. The group has unutilised bank 
   facilities of R625 million at 30 September 2016.

6. Developments, acquisitions and sales
   Upgrades/redevelopments  R654 million
   As part of the ongoing strategy to improve the quality of the existing portfolio, the following projects have been completed or 
   are in progress.

   East Rand Mall
   East Rand Mall (in which the company owns a 50% undivided share with Redefine Properties Limited) has been upgraded and extended 
   at a total cost of R460 million, of which Vukile's share is R230 million. The projected yield on the total capex is 5.3%.

   East Rand Mall, regarded as one of the top regional malls in South Africa, had a GLA of 63 460m, which has been increased to about 
   70 000m. The main entrances, malls and toilets have been upgraded, while some areas have been reconfigured to allow better utilisation 
   of the available space. New generators have been installed to provide full backup power to the centre during power outages, while a 
   new PV cell solar installation on the roof of the parking deck will decrease the centre's reliance on municipal power. 

   The extension of 6 540m incorporates a relocated entrance four and a youth-oriented mall anchored by a Mr Price emporium (consisting 
   of its apparel, sport and home outlets and comprising about 3 700m), Cotton-On and Toy Kingdom.

   The major portion of the extensions and upgrades was completed in April 2016 while new tenant H&M is expected to open its doors by 
   the first week in December 2016.

   Together with the adjacent East Point (previously East Rand Galleria), which is also being upgraded, shoppers will experience a 
   dominant super-regional shopping centre with a GLA of about 120 000m. 

   Durban: The Workshop
   Durban Workshop is now fully let after having completed the R75 million upgrade of the centre in June this year.
   
   A variety of new brands were added to the tenant mix which include the Pepkor Group, Edgars Connect, Spec Savers, Ginger International, 
   FNB, Le Coq Sportif and Bidvest.
   
   The centre is reporting a footcount of over 1.1 million per month and the annual trading density increased to R32 400/m2. Dwell times 
   improved with the upgrade of the food court and adding brands such as KFC, McDonalds, Pie City and Maharaj Kitchen.
   
   Demand for premises remain strong which should have a positive impact on rental growth.

   The Bellville Barons VW building
   The Bellville Barons VW building is situated at the Durban Road intersection with the N1 highway.

   A 10-year lease has been concluded with Barloworld Auto for the development of a Ford dealership and workshop in the currently 
   vacant area and the area to be vacated by Toys-R-Us. The first phase, which comprises the workshop and services area, was completed 
   by June 2016. The second phase, comprising the new and second-hand car show rooms and offices, will commence in January 2017 for 
   completion by September 2017.

   The total capex is R35.4 million and a yield of 15.1%, net of costs, is anticipated.

   Bellville: Tijger Park 4 and 5 upgrade
   The Tijger Park 4 office building has been let to the IT Department of the Pepkor Group. The lease period is five years with a 
   gross rental of R103/m per month escalating at 7% per year.

   In terms of the lease agreement, the buildings faade, entrance foyer and toilet blocks have been upgraded in line with the 
   recently completed upgrades to the Tijger Park buildings 1, 2 and 3. In addition, the roof at first-floor level over the atrium 
   was replaced by a new roof at the fourth-floor level. This created additional lease area of about 225m on the second and 
   third floor.

   Sections of the external faades, the entrance foyer, lift lobbies and toilet blocks of Tijger Park 5, have been upgraded at 
   the same time.

   The total capex is R20.0 million and the project was completed by August 2016.

   Durban: Phoenix Plaza Upgrade
   Phoenix Plaza, with a GLA of 24 363m, is being upgraded at a cost of R24.5 million. The scope of the project includes upgrades 
   to the external faades of the centre and the parking garage, new advertising pylons, upgrades to the four entrances, new mall 
   tiles, selective upgrades to the ceilings and bulkheads, one new toilet block and the upgrade of the two existing toilet blocks 
   and repairs to the external paving and the existing roof lights. The projected completion date is August 2017.

   Dobsonville Shopping Centre: Extension and upgrade
   Dobsonville Shopping Centre, with a GLA of 23 177m, is situated in northern Soweto. This mall, last upgraded in 2008, trades 
   well with regular requests received from prospective tenants seeking to lease premises.

   An amount of R114.0 million was approved in May 2016 to invest in the extension and improvements of this destination mall. 
   Besides important internal improvements and enhanced retail mix, the upgrade of the exterior aesthetics together with a new 
   food court area will pull shoppers to the redeveloped mall. The northern side of the mall anchored by a 2 500m Pick n Pay 
   supermarket will be extended by an additional 5 791m GLA. Further extensions include a new food court area adding another 
   1 100m. The projected net yield is 9.9%.

   Construction of the improvements and extension are under way with completion scheduled for 30 June 2017.

   Randburg Square Tower: Residential Conversion Project
   The redevelopment of Randburg Square 12-storey office component into 180 income producing residential apartments was completed 
   at the end of October 2016. This striking well-located residential tower situated above the mall is within easy access to 
   public transport, employment opportunities and amenities. It has set a new standard of affordable spacious rental housing with 
   state-of-the-art security access and monitoring systems, backbone fibre TV connections and smart metering systems providing tenants 
   with daily consumption data and billing information among other features.

   Leading residential agency Trafalgar has been appointed as the leasing and property managers. The lease-up rates for the 
   recently completed apartments has been very good with 68% of the units already occupied. Demand for this prominent and 
   well-positioned residential building continues to attract strong interest.

   The capital expenditure for this conversion project amounted to R80 million with an expected initial yield of 9.4%.

   Current Vukile projects
   A summary of major capex projects approved and incurred to 30 September 2016 is set out below:
   Approved projects                                                                                Paid to           Budget     
                                                        Anticipated/actual                     30 September     October 2016    
                                                        completion dates         Approved              2016    to March 2017    
   Durban: The Workshop                                 28 February 2017       75 000 000        70 071 963        4 928 037    
   Boksburg: East Rand Mall(II)                         31 March 2017         222 000 000       173 835 286       48 164 714    
   Durban: Phoenix Plaza                                31 August 2017         24 500 000                 -        8 844 509    
   Bellville: Barons Ford(II)                           30 June 2017           30 900 000        16 512 675        3 090 000    
   Bellville: Louis Leipoldt                            28 February 2017       22 000 000                 -        2 200 000    
   Dobsonville Centre Extension(II)                     30 October 2017       114 000 000        11 880 072       51 308 506    
   Thohoyandou: Thavhani Mall(I)                        31 August 2017        350 076 000                 -                -    
   Springs Mall(I)(II)                                  31 March 2017         259 625 000        96 838 189       56 470 000    
   Randburg Residential (figures includes VAT)(II)      30 October 2016        81 000 000        68 174 515       11 013 103    
   Bellville: Tijger Park 4 and 5                       31 August 2016         20 500 000        17 147 935        3 352 065    
                                                                            1 199 601 000       454 460 635      189 370 934    
   (I)  The financing for Springs Mall and Thavhani Mall has already been raised and is invested in a two-year deposit earning 
        8.4% per annum, pending completion of these two malls.
        The other projects will be financed out of the proceeds from property sales and existing bank facilities.
   (II) Further payments will be made after 31 March 2017.

   Developments - R610 million
   Thavhani Mall
   Vukile secured a 33% stake in the 50 000m Thavhani Mall at Thavhani City in Thohoyandou, Limpopo, for R350.1 million after 
   concluding a deal with the developers, Thavhani Property Investments (Pty) Ltd, which is owned by Flanagan & Gerard Property 
   Investment & Development together with some local partners.

   Leasing at Thavhani Mall is going well and it is now more than 86% let with confirmed anchor tenants including Pick n Pay, 
   Super Spar, Woolworths and Edgars, while a broad range of other national retailers will be part of the tenant mix. Nedbank, 
   Standard Bank and FNB have already committed to lease in the centre while negotiations with Absa Bank and Old Mutual are being 
   finalised.

   Construction work on Thavhani Mall is progressing well and it is still on course for the official opening on 24 August 2017.

   Springs Mall
   Vukile has acquired a 25% stake in the 44 662m Springs Mall for R259.6 million. The centre is being developed and managed by 
   Blue Crane Eco Mall (Pty) Ltd, in which Flanagan & Gerard is a shareholder, together with local partners Murinda Investments and 
   the D'Arrigo family.

   Springs Mall is currently 95% let with confirmed anchor tenants including Pick n Pay, Checkers, Woolworths and Edgars, while 
   negotiations are continuing with Game to also lease premises in the centre.

   Construction work is progressing well and the centre is scheduled for completion in March 2017.

   Property disposals concluded during the period - R1.181 billion
   In line with the group's strategy to focus on retail assets, the following properties were disposed of during the year:
                                                                                 
                                         Sales                                   
                                         price      Yield                        
   Property                               R000          %        Date of sale    
   Bloemfontein Fedsure House           89 700        8.6      31 August 2016    
   Pretoria Arcadia Suncardia          265 600       10.0      31 August 2016    
   Pretoria De Bruyn Park              305 100        9.3      31 August 2016    
   Pretoria Koedoe Arcade              129 700       12.2      31 August 2016    
   Pretoria Navarre Building           391 200       16.1      31 August 2016    
                                     1 181 300       12.0                        

   In support of the retail strategy, further sale agreements to the value of R443.9 million have been concluded with reputable 
   purchasers for the sale of the following properties. The due diligence investigations have been concluded and the transactions 
   have progressed to the levels as indicated below:      

                                                  Sales                                                                    
                                                  price      Yield                                                         
   Property                                        R000          %    Progress                                             
   Cape Town Parow De Tijger Day Clinic          31 860        8.0    Securities for purchase price in place               
   Cape Town Parow De Tijger Office Park         38 940       11.8    Securities for purchase price in place               
   Cape Town Bellville Louis Leipoldt           373 100        8.0    Subject only to Competition Commission approval      
                                                443 900        8.3    

   The proceeds from property sales will be used to repay debt, as well as fund potential accretive acquisitions, both locally and 
   internationally.
 
7. Valuation of portfolio
   The accounting policies of the group require that the directors value the entire portfolio every six months at fair 
   market value. Approximately one half of the portfolio is valued every six months, on a rotational basis, by 
   registered independent third-party valuers. The directors have valued the group's property portfolio at 
   R14.8(1) billion as at 30 September 2016. This is R0.8 billion or 4.9% less than the valuation as at 31 March 2016 
   due to sales during the period. The calculated recurring forward yield for the portfolio is a conservative 9.1%.

   The external valuations by Quadrant Properties (Pty) Ltd and Knight Frank (Pty) Ltd at 30 September 2016 of 44.1% 
   of the total portfolio are in line with the directors' valuations of the same properties. 
   
   (1) The group's property portfolio overview takes into account Moruleng Mall at 80%, whereas in the financial 
       statements the group property value reflects 100% of Clidet, which owns Moruleng Mall.

   Fair value measurement of non-financial assets (investment properties)
   The fair value of commercial buildings are estimated using an income approach which capitalises the estimated 
   rental income stream, net of projected operating costs, using a discount rate derived from market yields. The 
   estimated rental stream takes into account current occupancy levels, estimates of future vacancy levels, the terms
   of in-place leases and expectations of rentals from future leases over the remaining economic life of the buildings.

   The most significant inputs, all of which are unobservable, are the estimated rental value, assumptions regarding 
   vacancy levels, the discount rate and the reversionary capitalisation rate. The estimated fair value increases if 
   the estimated rental increases, vacancy levels decline or if discount rates (market yields) and reversionary 
   capitalisation rates decline. The overall valuations are sensitive to all four assumptions. Management considers the 
   range of reasonable possible alternative assumptions is greatest for reversionary capitalisation rate, rental values 
   and vacancy levels and that there is also an interrelationship between these inputs. The inputs used in the 
   valuations at 30 September 2016 were:      
   - The range of the reversionary capitalisation rates applied to the portfolio are between 8.0% and 16.8% (March 2016: 
     between 7.8% and 16.5%) with the weighted average being 9.6% (March 2016: 9.7%).
   - The discount rates applied range between 12.8% and 19.6% (March 2016: between 12.8% and 19.6%) with the weighted 
     average being 14.2%. (March 2016: 14.2%).

   In determining future cash flows for valuation purposes, vacancies are forecast for each property based on estimated 
   demand.

   Sensitivity analysis
   The effect on the fair value of the portfolio of a 0.25% increase in the discount rate would result in a decrease 
   in the fair value of R389 million (2.6%) (March 2016: R420 million (2.7%)). The average discount rate on the 
   portfolio would increase from 14.2% to 14.5% (March 2016: 14.5%) and the average exit capitalisation rate would 
   increase from 9.6% to 9.9% (March 2016: 9.9%) due to the interlinked nature of the rates. The analysis has been 
   prepared on the assumption that all other variables remain constant.

8. Group Property Portfolio Overview
   The group property portfolio at 30 September 2016 consisted of 98 properties with a total market value of 
   R14.8 billion, excluding capitalised lease commissions, and gross lettable area of 1 270 734m, with an average 
   value of R151 million per property.

   The geographical and sectoral distribution of the group's portfolio is indicated in the tables below. The portfolio is 
   well represented in most of the South African provinces and Namibia. Some 81% of the gross income is derived from Gauteng, 
   KwaZulu-Natal, Western Cape and Namibia.

   Geographic profile
                                Vukile          Synergy          Total     
                             portfolio        portfolio      portfolio    
   % of gross income                 %                %              %    
   Gauteng                          54               11             47    
   KwaZulu-Natal                    16               23             17    
   Western Cape                      6               33             11    
   Namibia                           7                0              6    
   North West                        4               12              5    
   Free State                        4                4              4    
   Limpopo                           3                8              4    
   Mpumalanga                        2                9              3    
   Eastern Cape                      4                0              3    

   Based on market value 73% of the group portfolio is in the retail sector followed by 14% in the office, 9% in the 
   industrial, 3% in the hospital and 1% in the motor-related sectors. Post the finalisation of the transaction, the retail 
   component will equate to 86% of the total portfolio. 

   The tenant profile for the Vukile and Synergy portfolios are listed in the table below:
   Tenant profile
                                                                                      Vukile          Synergy         Total     
                                                                                   portfolio        portfolio      portfolio    
   % of GLA                                                                                %               %              %    
   Large national and listed tenants and major franchises                                 50              75             54    
   Government                                                                              3               -              3    
   National and listed tenants, franchised and medium to large professional firms         11               5             10    
   Other                                                                                  36              20             33    

   The retail portfolio's exposure to national, listed and franchised tenants is 80% in total.

   Vukile's tenant concentration risk is considered to be low as the top 10 tenants account for 36% of total GLA. If the 
   Synergy portfolio is excluded, the top 10 tenants account for 34% of total GLA. Shoprite is the single largest tenant, 
   occupying 6.2% of total GLA with Steinhoff the second largest at 4.8% of total GLA. If the Synergy portfolio is excluded, 
   the exposure to Shoprite and Steinhoff is 6.4% and 4.3%, respectively. The Synergy portfolio's exposure to the top 10 
   tenants is 48%, with Spar the largest at 18.6% and Steinhoff at 7.6%.

   Top 10 properties by value
                                                                                    Directors'
                                                                                  valuation at
                                                                       Rentable        30 Sept
                                                                           area           2016           %    Valuation    
   Property                                Location        Sector            m             Rm    of total         R/m    
   Boksburg East Rand Mall*                Boksburg        Retail        34 541          1 258         8.5       36 420    
   Durban Phoenix Plaza                    Durban          Retail        24 363            761         5.1       31 236    
   Gugulethu Square                        Gugulethu       Retail        25 322            437         3.0       17 258    
   Soweto Dobsonville Shopping Centre      Soweto          Retail        23 177            413         2.8       17 819    
   Queenstown Nonesi Mall                  Queenstown      Retail        28 147            397         2.7       14 105    
   Pinetown Pine Crest*                    Pinetown        Retail        20 056            389         2.6       19 396    
   Moruleng Mall (80%)                     Moruleng        Retail        25 137            378         2.6       15 038    
   Randburg Square                         Randburg        Retail        40 767            378         2.6        9 272    
   Cape Town Bellville Louis Leipoldt      Cape Town       Hospital      22 311            375         2.5       16 808    
   Oshakati Shopping Centre                Oshakati        Retail        24 632            358         2.4       14 534    
   Total top 10                                                         268 453          5 144        34.8       19 162    
   * Represents an undivided 50% share in this property.

                                         Directors'
                                       valuation at
                        Rentable            30 Sept
                            area               2016             %      Valuation    
    Sector                    m                 Rm      of total           R/m    
    Retail               246 142              4 769          32.3         19 375    
    Hospital              22 311                375           2.5         16 808    
    Total top 10         268 453              5 144          34.8         19 162    

    The 10 largest retail centres (representing 47% of the total retail portfolio value) reflects 87% exposure to
    national, listed and franchised tenants.

    Top 10 retail centres (based on value)
                                              Directors'
                                            valuation at    % of total      National,    
                                                 30 Sept        retail     listed and    
                                                    2016     portfolio     franchised    
                                                      Rm         value      tenants %
    Boksburg East Rand Mall*                       1 258          11.6           87.5    
    Durban Phoenix Plaza                             761           7.0           80.0    
    Gugulethu Square                                 437           4.0           89.6    
    Soweto Dobsonville Shopping Centre               413           3.8           84.5    
    Queenstown Nonesi Mall                           397           3.7           95.9    
    Pinetown Pine Crest*                             389           3.6           92.7    
    Moruleng Mall (80%)                              378           3.5           82.2    
    Randburg Square                                  378           3.5           83.3    
    Oshakati Shopping Centre                         358           3.3           94.3    
    Durban Workshop                                  350           3.2           73.1    
                                                   5 119          47.4           86.6    
    * Represents an undivided 50% share in this property.

9. Property portfolio performance
   New leases and renewals of 156 639m with a contract value of R693 million were concluded during the year to date.
   Some 72% of leases to be renewed during the six months ended 30 September 2016 were renewed or are in the process 
   to be renewed.      

   Details of large contracts concluded
                                                                                                       Contract         Lease 
                                                                                                          value      duration 
   Tenant                           Property                                     Sector                      Rm         Years 
   Spar                             Hartbeespoort Sediba Shopping Centre         Retail                    42.2            10 
   Game Stores                      Pinetown Pine Crest (50%)                    Retail                    30.5             9 
   Barloworld South Africa          Cape Town Bellville Barons                   Motor-related             24.8            10 
   Spar                             Makhado Nzhelele Valley Shopping Centre      Retail                    22.3            10 
   Jet Stores                       Durban Phoenix Plaza                         Retail                    16.4             6 
   Productivity SA                  Midrand IBG                                  Offices                   14.5             6 
   The Ministry of Information      Windhoek 269 Independence Avenue             Retail                    12.0             5 
   Mr Price                         Durban Phoenix Plaza                         Retail                    11.6             5 
   EMID                             Pretoria Lynnwood Sanlynn                    Offices                   11.5             4 
   Absa Bank                        Cape Town Bellville Suntyger                 Offices                   11.2             5 

   The group lease expiry profile table reflects that 14% of the leases are due for renewal in the second half of the
   year. Approximately 43% of leases are due to expire in 2020 and beyond (up from 33%).

   Group lease expiry
                                                                                                                   Beyond     
                                                       March       March       March       March       March        March     
                                          Vacant        2017        2018        2019        2020        2021         2021    
   % of GLA                                    %           %           %           %           %           %            %    
   GLA                                       5.0          14          18          20          15           8           20    
   Cumulative as at September 2016           5.0          19          37          57          72          80          100    
   Cumulative as at March 2016               3.9          32          47          67          78          85          100    


   Vacancies
   At 30 September 2016, the portfolio's vacancy (measured as a percentage of gross rental) was unchanged at 5.0%. When 
   measured as a percentage of gross lettable area vacancies were at 5.0%, compared to 3.9% at 31 March 2016.

   If the current development vacancy of 3 545m at East Rand Mall and Ermelo Game Centre is included, the vacancy on 
   lettable area increases from 4.1% (March 2016) to 5.3% and from 5.3% (March 2016) to 5.5% based on gross rental.

   The vacancy per sector (measured as a percentage of gross lettable area) is indicated in the table below.

                                                                           30 September     
                                                        30 September               2016     
                                                                2016          including    
                       31 March      30 September        development        development    
                           2016              2016            vacancy            vacancy    
   Vacancies                  %                 %                  %                  %    
   Retail                   3.5               3.9                0.5                4.4    
   Offices                  5.0              10.4                  -               10.4    
   Industrial               4.3               4.8                  -                4.8    
   Sovereign                4.2              Sold                  -                  -    
   Hospital                 0.0               0.0                  -                0.0    
   Motor-related            0.0               0.0                  -                0.0    
   Total                    3.9               5.0                0.3                5.3    

   The office vacancies increased mainly as a result of a tenant vacating  9 000m at Sunninghill Park. This was known at 
   the time that budgets were prepared and the financial impact has already been taken into consideration. This space is 
   actively marketed and we have received keen interest from potential tenants.

   Vukile is engaged in various initiatives to reduce portfolio vacancies including broker focus groups, the publishing of 
   vacancy information directly to brokers and also utilising the Vukile vacancy website, leasing incentives on selected 
   properties, incentives to property management companies and leasing brokers, etc.

   GLA summary                            GLA m    
   Balance at 1 April 2016             1 427 591    
   GLA adjustments                       (10 822)   
   Disposals                            (146 831)   
   Acquisitions and extensions               796    
   Balance at 30 September 2016        1 270 734    

   Vacancy summary                                        Area m           %    
   Balance at 31 March 2016                                55 139         3.9    
   Less: Properties sold since 31 March 2016               (6 298)       (4.4)    
   Remaining portfolio balance at 31 March 2016            48 841         3.8    
   Leases expired or terminated early                     143 274                
   Renewal of expired leases                             (110 748)                
   Contracts to be renewed                                (24 635)                
   New letting of vacant space                            (38 262)               
   Tenants vacated                                         45 498                
   Balance at 30 September 2016                            63 968         5.0    

   Base rentals (excluding recoveries)
   The weighted average monthly base rental rates per sector, between 31 March 2016 and 30 September 2016, are set out
   in the table below:      

   Weighted average base rentals (R/m) excluding recoveries        September         March       Escalation    
                                                                         2016          2016                %    
   Retail                                                              117.70        114.61              2.7    
   Offices                                                              96.04         94.56              1.6    
   Industrial                                                           45.33         44.65              1.5    
   Sovereign                                                             Sold        101.50                -    
   Hospital                                                            113.90        106.55              6.9    
   Motor-related                                                       121.83        121.91             (0.1)   
   Total                                                                98.74         96.71              2.1    

   Average contractual rental escalations of 7.5% are slightly lower than the previous year (7.6%).

   Positive reversions were achieved at 6.4% in the retail sector, but the industrial and office sectors are under 
   pressure with reversions at 0.4% and negative 0.5%, respectively. The average escalation on expiry rentals on the
   total portfolio of 4.1% is still positive against the backdrop of a difficult trading environment.       

   New leases were concluded at 3.2% above budget in the retail sector, but lower than budget in the office, industrial 
   and motor-related sectors.

   The financial performance of the stable portfolio is set out below:

                                       September      September
                                            2016           2015
   Financial performance                      Rm             Rm      % change    
   Property revenue                        672.1          639.3           5.1    
   Net property expenses                   113.7          110.5           2.9    
   Net property income                     558.4          528.8           5.6    
   Property expense ratios (%)*             16.9           17.3          (2.1)    
   * Net cost to property revenue ratios (including rates and taxes and electricity costs; excluding asset management 
     fee).                                                  

   Expense categories and ratios
   The top four expense categories contribute 80% of the total expenses. These are: government services (45%), rates and
   taxes (17%), cleaning and security (11%) and property management fees (7%).

   The group continuously evaluates methods of containing costs in the portfolio. The stable portfolio's recurring net 
   costs to property revenue ratios (excluding electricity and rates and taxes) of 15.7% in September 2016 is still in 
   line with the ratio of 15.0% in March 2010 and hence have been well contained.

   If all recurring net expenses are taken into consideration, the ratio of recurring net cost to property revenue of 16.9% 
   is positive compared to the March 2016 ratio of 18.3%.

   Rent collection and arrears
   An important part of protecting the group against the likelihood of tenants defaulting on their lease agreements is 
   our credit vetting process prior to the acceptance of a tenant. We have developed a comprehensive screening process for
   each applicant, which assesses the tenant according to type (national, government, SMMEs and other), nature of business, 
   main shareholders and other relevant characteristics, and in the case of renewals, payment history.

   As such, it is important to closely monitor our arrears book and any changes to tenant payment processes. We measure the
   effectiveness of our collections process based on the percentage collected by the fifth business day of each month. The 
   collection percentages across current tenants are under pressure and we have seen an increase in the number of legal 
   cases mainly among smaller line shops across a number of retail centres as well as isolated industrial tenants. Our 
   current provisions are considered adequate at this stage.

10. Operating segment reporting
    The revenues and profits generated by the group's operating segments and segment assets are summarised in the table below.

    During the six-month period to 30 September 2016, there has been no change from prior periods in the measurement methods 
    used to determine operating segments and reported segment profits.

Operating segment analysis for the six months ended 30 September 2016  
                                                                         Retail -      Retail -          
                                                                           Vukile       Synergy       Offices      Industrial    Residential  
GROUP                                                                        R000          R000          R000            R000           R000   
September 2016                                                                                                                                 
Group income for the six months ended 30 September 2016                                                                                        
Property revenue(i)                                                       403 391       128 337       131 045          67 721          1 377   
Straight-line rental income accrual                                       (27 556)       (8 203)       (9 522)         (4 388)           (39)   
                                                                          375 835       120 134       121 523          63 333          1 338   
Property expenses (net of recoveries)(i)                                  (68 080)      (21 477)      (15 183)        (14 330)          (906)   
Profit from property and other operations                                 307 755        98 657       106 340          49 003            432   
(i) The property revenue and property expense have been reflected                                                               
net of recoveries. The unaudited condensed consolidated statement                                                               
of profit and loss reflects the gross property revenue and                                                                      
gross property expenses.                                                                                                        
Group statement of financial position at 30 September 2016                                                                                     
Assets                                                                                                                                         
Investment properties                                                   8 392 166     2 451 436       461 293         456 404         68 431   
Add: Lease commissions                                                                                                                         
Goodwill                                                                   48 218                                       3 889                  
Investment properties held for sale                                        61 887                   1 592 000         880 016                  
                                                                        8 502 271     2 451 436     2 053 293       1 340 309         68 431   
Add: Excluded items                                                                                                                            
Investment property under development                                                                                                          
Equity investments                                                                                                                             
Investment in associate                                                                                                                        
Intangible asset                                                                                                                               
Furniture, fittings and computer equipment                                                                                                     
Available-for-sale financial asset                                                                                                             
Derivative financial instruments                                                                                                               
Loans receivable                                                                                                                               
Deferred taxation assets                                                                                                                       
Trade and other receivables                                                                                                                    
Taxation refundable                                                                                                                            
Cash and cash equivalents                                                                                                                      
Total assets                                                                                                                                   
Equity and liabilities                                                                                                                         
Stated capital                                                          4 406 283     1 277 696     1 070 184         696 549         35 666   
Interest-bearing borrowings                                             2 445 169       709 029       593 876         386 533         19 792   
                                                                        6 851 452     1 986 725     1 664 060       1 083 082         55 458   
Add: Excluded items                                                                                                                              
Other components of equity and retained earnings                                                                                                 
Non-controlling interest                                                                                                                         
Derivative financial instruments                                                                                                                 
Trade and other payables                                                                                                                         
Current taxation liabilities                                                                                                                     
Total equity and liabilities                                                                                                                   

                                                                                                                       Motor-          Total    
                                                                                      Sovereign      Hospital         related          group    
GROUP                                                                                      R000          R000            R000           R000    
September 2016                                                                                                                                  
Group income for the six months ended 30 September 2016                                                                                         
Property revenue(i)                                                                      56 705        15 671           6 234        810 481    
Straight-line rental income accrual                                                      (5 892)       (1 285)           (494)       (57 379)    
                                                                                         50 813        14 386           5 740        753 102    
Property expenses (net of recoveries)(i)                                                 14 985           (40)           (217)      (105 248)    
Profit from property and other operations                                                65 798        14 346           5 523        647 854    
(i) The property revenue and property expense have been reflected                                                 
net of recoveries. The unaudited condensed consolidated statement                                                 
of profit and loss reflects the gross property revenue and                                                        
gross property expenses.                                                                                          
Group statement of financial position at 30 September 2016                                                                            
Assets                                                                                                                                          
Investment properties                                                                                                 156 680     11 986 410    
Add: Lease commissions                                                                                                                39 939    
                                                                                                                                  12 026 349    
Goodwill                                                                                                                              52 107    
Investment properties held for sale                                                                   402 177                      2 936 080    
                                                                                                      402 177         156 680     15 014 536    
Add: Excluded items                                                                                                                             
Investment property under development                                                                                                188 239    
Equity investments                                                                                                                   375 433    
Investment in associate                                                                                                              636 959    
Intangible asset                                                                                                                     106 265    
Furniture, fittings and computer equipment                                                                                             2 720    
Available-for-sale financial asset                                                                                                    32 364    
Derivative financial instruments                                                                                                       1 015    
Loans receivable                                                                                                                      38 110    
Deferred taxation assets                                                                                                              10 020    
Trade and other receivables                                                                                                          215 702    
Taxation refundable                                                                                                                      123    
Cash and cash equivalents                                                                                                          1 470 500    
Total assets                                                                                                                      18 091 986    
Equity and liabilities                                                                                                                          
Stated capital                                                                                        209 616          81 662      7 777 656    
Interest-bearing borrowings                                                                           116 322          45 317      4 316 038    
                                                                                                      325 938         126 979     12 093 694    
Add: Excluded items                                                                                                                             
Other components of equity and retained earnings                                                                                   5 008 896    
Non-controlling interest                                                                                                             565 616    
Derivative financial instruments                                                                                                      25 575    
Trade and other payables                                                                                                             396 781    
Current taxation liabilities                                                                                                           1 424    
Total equity and liabilities                                                                                                      18 091 986    


Operating segment analysis for the six months ended 30 September 2015 

                                                                   Retail -        Retail -         
                                                                     Vukile         Synergy        Offices      Industrial      Sovereign  
GROUP                                                                  R000            R000           R000            R000           R000      
September 2015                                                                                                                                 
Group income for the six months ended 30 September 2015                                                                                        
Property revenue                                                    466 363         167 487        185 862          82 757         81 357      
Straight-line rental income accrual                                  24 084           8 094          9 086           4 444          4 749      
                                                                    490 447         175 581        194 948          87 201         86 106      
Property expenses (net of recoveries)                              (171 313)        (68 318)       (74 546)        (28 307)       (23 170)      
Profit from property and other operations                           319 134         107 263        120 402          58 894         62 936      
Group statement of financial position at 30 September 2015                                                                                     
Assets                                                                                                                                         
Investment properties                                             7 178 712       2 531 973      2 162 485       1 250 937        939 728      
Add: Lease commissions                                                                                                                         
Goodwill                                                             51 073           4 951                          3 889                     
Investment properties held for sale                                 133 000                         12 350                                     
                                                                  7 362 785       2 536 924      2 174 835       1 254 826        939 728      
Add: Excluded items                                                                                                                            
Investment property under development                                                                                                          
Equity investments                                                                                                                             
Intangible asset                                                                                                                               
Furniture, fittings and computer equipment                                                                                                     
Available-for-sale financial asset                                                                                                             
Derivative financial instruments                                                                                                               
Loans receivable                                                                                                                               
 Deferred taxation assets                                                                                                                      
 Trade and other receivables                                                                                                                   
Cash and cash equivalents                                                                                                                      
Total assets                                                                                                                                   
Equity and liabilities                                                                                                                         
Stated capital                                                    3 441 229       1 152 193      1 023 575         588 751        442 280 
Interest-bearing borrowings                                       2 355 635         788 712        700 668         403 015        302 754 
                                                                  5 796 864       1 940 905      1 724 243         991 766        745 034 
Add: Excluded items                                                                                                                       
Other components of equity and retained earnings                                                                                          
Non-controlling interest                                                                                                                  
Derivative financial instruments                                                                                                          
Deferred taxation liabilities                                                                                                             
Trade and other payables                                                                                                                  
Current taxation liabilities                                                                                                              
Total equity and liabilities                                                                                                              

                                                                                                                  Asset            
                                                                                   Motor-                    management          Total    
                                                                  Hospital        related          Total       business          group
GROUP                                                                 R000           R000           R000           R000           R000    
September 2015                                                                                                                            
Group income for the six months ended 30 September 2015                                                                                   
Property revenue                                                    15 496          6 046      1 005 368         11 886      1 017 254    
Straight-line rental income accrual                                  1 111            427         51 995              -         51 995    
                                                                    16 607          6 473      1 057 363         11 886      1 069 249    
Property expenses (net of recoveries)                               (1 886)          (813)      (368 353)        (2 915)      (371 268)    
Profit from property and other operations                           14 721          5 660        689 010          8 971        697 981    
                                                                                                                                          
Group statement of financial position at 30 September 2015                                                                                
Assets                                                                                                                                    
Investment properties                                              383 555        138 478     14 585 868                    14 585 868    
Add: Lease commissions                                                                            39 408                        39 408    
                                                                                              14 625 276                    14 625 276    
Goodwill                                                                                          59 913                        59 913    
Investment properties held for sale                                                              145 350                       145 350    
                                                                   383 555        138 478     14 830 539                    14 830 539    
Add: Excluded items                                                                                                                       
Investment property under development                                                                                           93 892    
Equity investments                                                                                                             359 020    
Intangible asset                                                                                                               117 934    
Furniture, fittings and computer equipment                                                                                       2 693    
Available-for-sale financial asset                                                                                              31 110    
Derivative financial instruments                                                                                                16 326    
Loans receivable                                                                                                               658 546    
 Deferred taxation assets                                                                                                        4 129    
 Trade and other receivables                                                                                                   188 626    
Cash and cash equivalents                                                                                                      672 953    
Total assets                                                                                                                16 975 768    
Equity and liabilities                                                                                                                    
Stated capital                                                     180 519         65 174      6 893 721                     6 893 721    
Interest-bearing borrowings                                        123 571         44 613      4 718 968                     4 718 968    
                                                                   304 090        109 787     11 612 689                    11 612 689    
Add: Excluded items                                                                                                                       
Other components of equity and retained earnings                                                                             4 429 395    
Non-controlling interest                                                                                                       562 135    
Derivative financial instruments                                                                                                 1 571    
Deferred taxation liabilities                                                                                                    8 872    
Trade and other payables                                                                                                       358 721    
Current taxation liabilities                                                                                                     2 385    
Total equity and liabilities                                                                                                16 975 768    

11. Declaration of a cash dividend with the election to reinvest the cash dividend in return for Vukile shares

    Notice is hereby given of a gross dividend amounting to 67.64754 cents per share, out of distributable income, 
    for the six-month period to 30 September 2016.

    Shareholders will be entitled to elect (in respect of all or part of their holding) to reinvest the cash dividend 
    of 67.64754 cents per share, in return for shares (the share reinvestment alternative), failing which they will 
    receive the cash dividend in respect of (all or part of) their holdings.

    A circular providing further information in respect of the cash dividend and the share reinvestment alternative will 
    be posted to shareholders on 25 November 2016.

    The distribution of the circular and/or accompanying documents and the right to elect shares in jurisdictions other 
    than the Republic of South Africa (SA) may be restricted by law, and failure to comply with any of these restrictions 
    may constitute a violation of the securities laws of any such jurisdictions. The right to elect shares is not being 
    offered to shareholders, directly or indirectly, in the United Kingdom, European Economic Area (EEA), Canada, 
    United States of America, Japan and Australia unless certain exemptions from the requirements of those jurisdictions 
    are applicable.

    Shareholders who have dematerialised their shares are required to notify their duly appointed Central Securities 
    Depository Participant (CSDP) or broker of their election in the manner and time stipulated in the custody agreement 
    governing the relationship between the shareholder and their CSDP or broker.

    Tax implications
    Vukile was granted REIT status by the JSE Limited with effect from 1 April 2013 in line with the REIT structure as 
    provided for in the Income Tax Act, 58 of 1962, as amended (the Income Tax Act) and section 13 of the JSE Listings 
    Requirements.

    The REIT structure is a tax regime that allows a REIT to deduct qualifying dividends paid to investors, in determining 
    its taxable income.

    The cash dividend of 67.64754 cents per share meets the requirements of a "qualifying distribution" for the purposes 
    of section 25BB of the Income Tax Act (a qualifying distribution) with the result that:
    - qualifying distributions received by resident Vukile shareholders must be included in the gross income of such 
      shareholders (as a non-exempt dividend in terms of section 10(1)(k)(i)(aa) of the Income Tax Act), with the effect 
      that the qualifying distribution is taxable as income in the hands of the Vukile shareholder. These qualifying 
      distributions are, however, exempt from dividends withholding tax, provided that the South African resident shareholders 
      provided the following forms to their CSDP or broker, as the case may be, in respect of uncertificated shares, or the 
      company, in respect of certificated shares:
      - a declaration that the distribution is exempt from dividends tax; and
      - a written undertaking to inform the CSDP, broker or the company, as the case may be, should the circumstances affecting 
        the exemption change or the beneficial owner cease to be the beneficial owner;
      both in the form prescribed by the Commissioner for the South African Revenue Service. Shareholders are advised to 
      contact their CSDP, broker or the company, as the case may be, to arrange for the above mentioned documents to be 
      submitted prior to payment of the distribution, if such documents have not already been submitted.
    - qualifying distributions received by non-resident Vukile shareholders will not be taxable as income and instead will be 
      treated as ordinary dividends but which are exempt in terms of the usual dividend exemptions per section 10(1)(k) of 
      the Income Tax Act. It should be noted that until 31 December 2013 qualifying distributions received by non-residents 
      were not subject to dividends withholding tax. From 1 January 2014, any qualifying distributions are subject to dividends 
      withholding tax at 15%, unless the rate is reduced in terms of any applicable agreement for the avoidance of double 
      taxation (DTA) between South Africa and the country of residence of the shareholder. Assuming dividends withholding tax 
      will be withheld at a rate of 15%, the net distribution amount due to non-resident shareholders is 57.50041 cents. 
      A reduced dividend withholding rate in terms of the applicable DTA, may only be relied upon if the non-resident holder has 
      provided the following forms to their CSDP or broker, as the case may be, in respect of uncertificated shares, or the 
      company, in respect of certificated shares:
      - a declaration that the distribution is subject to a reduced rate as a result of the application of a DTA; and
      - a written undertaking to inform their CSDP, broker or the company, as the case may be, should the circumstances 
        affecting the reduced rate change or the beneficial owner cease to be the beneficial owner;
      both in the form prescribed by the Commissioner for the South African Revenue Service. Non-resident holders are advised to 
      contact their CSDP, broker or the company, as the case may be, to arrange for the above mentioned documents to be submitted 
      prior to payment of the distribution if such documents have not already been submitted, if applicable.

    Shareholders who are South African residents are advised that in electing to participate in the share reinvestment 
    alternative, pre-taxation funds are utilised for the reinvestment purposes and that taxation will be due on the total cash 
    dividend amount of 67.64754 cents per share.

    Shareholders are further advised that:
    - the issued capital of Vukile is 690 643 418 shares of one cent each at 30 September 2016; and
    - Vukile's tax reference number is 9331/617/14/3.

    This cash dividend or share reinvestment alternative may have tax implications for resident as well as non-resident 
    shareholders. Shareholders are therefore encouraged to consult their tax and/or professional advisers should they be in any 
    doubt as to the appropriate action to take.

    The salient dates relating to the cash dividend and share reinvestment alternative are as follows:
                                                                                                                2016 
    Circular and form of election posted to shareholders                                         Friday, 25 November 
    Finalisation information including the ratio and price per share released on SENS             Monday, 5 December 
    Last day to trade in order to participate in the election to receive the share             
    reinvestment alternative or to receive a cash dividend (LDT)                                 Monday, 12 December 
    Share trade ex-dividend                                                                     Tuesday, 13 December 
    Listing of maximum possible number of shares under the share 
    reinvestment alternative                                                                   Thursday, 15 December 
    Last day to elect to receive the share reinvestment alternative or to receive 
    a cash dividend (no late forms of election will be accepted) at 12:00 (SA time)            Thursday, 15 December 
    Record date for the election to receive the share reinvestment alternative or to 
    receive a cash dividend (record date)                                                      Thursday, 15 December 
    Results of cash dividend and share reinvestment alternative released on SENS                 Monday, 19 December 
    Cash dividend cheques posted to certificated shareholders on or about                        Monday, 19 December 
    Accounts credited by CSDP or broker to dematerialised holders with the                    
    cash dividend payment                                                                        Monday, 19 December 
    Share certificates posted to certificated shareholders on or about                        Wednesday, 21 December 
    Accounts updated with new shares (if applicable) by CSDP or broker to 
    dematerialised shareholders                                                               Wednesday, 21 December 
    Adjustment to shares listed on or about                                                      Friday, 23 December 

    Notes
    1. Shareholders electing the share reinvestment alternative are alerted to the fact that the new shares will be 
       listed on LDT +3 and that these new shares can only be traded on LDT +3, due to the fact that settlement of the 
       shares will be three days after record date, which differs from the conventional one day after record date 
       settlement process.      
    2. Shares may not be dematerialised or rematerialised between Monday, 12 December 2016 and Thursday, 15 December 2016,
       both days inclusive.
    3. The above dates and times are subject to change. Any changes will be released on SENS.

12. Basis of preparation
    The condensed consolidated interim financial statements have been prepared in accordance with and containing the 
    information required by International Financial Reporting Standards, IAS 34 - Interim Financial Reporting, the 
    SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Announcements 
    as issued by the Financial Reporting Standards Council, the JSE Listings Requirements and the relevant sections of the 
    South Africa Companies Act.      

    All amendments to standards applicable for Vukile's financial period beginning on 1 April 2016 have been considered. 
    All accounting policies applied in the preparation of these interim financial statements are consistent with those 
    applied by Vukile in its consolidated financial statements for the year ended 31 March 2016, other than the adoption of 
    those amendments to standards that become effective in the current period, which had no impact on the financial results.

    Preparation of the condensed consolidated interim financial statements was supervised by Michael Potts CA(SA) in his 
    capacity as financial director but have not been reviewed or reported on by Vukile's independent external auditors.

13. Post period events
    Distribution
    Declaration of dividend
    In line with IAS10 - Events after the Reporting Period, the declaration of the dividend of 67.64754 cents per share in 
    respect of the six-month period to 30 September 2016 amounting to R467.2 million occurred after the reporting period, 
    resulting in a non-adjusting event that is not recognised in the financial statements.

14. Prospects
    Despite a continually challenging and volatile economic and political environment, the business remains on a very stable 
    and solid operational footing. We still anticipate that Vukile will be able to deliver earnings growth in line with previous 
    guidance of a 7% increase in dividend on the prior year.

    The forecast growth in dividend is based on the assumptions that the macro-economic environment does not deteriorate further 
    and no major corporate failures will occur. Forecast rental income is based on contractual escalations and market-related 
    renewals. This forecast has not been reviewed or reported on by the company's auditors.

    The major restructuring undertaken through the sale of the Sovereign portfolio and the imminent finalisation of the transaction 
    whereby Vukile will emerge as a focused retail fund in South Africa has undoubtedly left the business in a significantly 
    enhanced position by eliminating direct exposure to higher risk sectors of the market.

    The proceeds from the sale of the Sovereign portfolio for R1.18 billion, have been earmarked for offshore expansion. 
    There are a number of discussions currently underway in this regard. Management is, however, focused on making sure that 
    these funds are used to further the strategic, long-term goals of the group and will not consider a transaction based 
    solely on short-term objectives.

    This forecast has not been reviewed or reported on by the company's auditors.

On behalf of the board

AD Botha    LG Rapp
Chairman    Chief executive officer

Melrose Estate
24 November 2016


Unaudited condensed consolidated statement of financial position at 30 September 2016

                                                                   Unaudited         Unaudited         Audited    
                                                                30 September      30 September        31 March    
                                                                        2016              2015            2016    
 Group                                                                  R000              R000            R000    
 ASSETS                                                                                                           
 Non-current assets                                               13 469 354        15 968 839      15 525 681    
 Investment properties                                            11 502 598        14 290 681      13 302 386    
 Investment properties                                            12 026 349        14 625 276      13 737 892    
 Straight-line rental income adjustment                             (523 751)         (334 595)       (435 506)   
 Other non-current assets                                          1 966 756         1 678 158       2 223 295    
 Straight-line rental income asset                                   523 751           334 595         435 506    
 Investment in associate                                             636 959                 -         760 049    
 Equity investments                                                  375 433           359 020         328 247    
 Investment properties under development                             188 239            93 892          87 033    
 Furniture, fittings, computer equipment and other                     2 720             2 693           2 127    
 Available-for-sale financial asset                                   32 364            31 110          19 842    
 Goodwill and intangible asset                                       158 372           177 847         158 372    
 Derivative financial instruments                                        788            16 326          41 230    
 Deferred taxation assets                                             10 020             4 129           2 779    
 Long-term cash deposit                                                    -                 -         350 000    
 Long-term loans granted                                              38 110           658 546          38 110    
 Current assets                                                    1 686 552           861 579         831 794    
 Trade and other receivables                                         215 702           188 626         246 873    
 Derivative financial instruments                                        227                 -           1 245    
 Current taxation asset                                                  123                 -           1 217    
 Cash and cash equivalents                                         1 470 500           672 953         582 459    
 Investment properties held for sale                               2 936 080           145 350       1 997 744    
 Total assets                                                     18 091 986        16 975 768      18 355 219    
 EQUITY AND RESERVES                                                                                              
 Equity attributable to owners of the parent                      12 786 552        11 323 116      11 932 574    
 Non-controlling interest                                            565 616           562 135         556 681    
 Non-current liabilities                                           2 774 438         3 676 551       4 114 331    
 Other interest-bearing borrowings                                 2 750 209         3 666 108       4 098 319    
 Derivative financial instruments                                     24 229             1 571           5 269    
 Deferred taxation liabilities                                             -             8 872          10 743    
 Current liabilities                                               1 965 380         1 413 966       1 751 633    
 Trade and other payables                                            396 781           358 721         439 937    
 Borrowings                                                        1 565 829         1 052 860       1 309 687    
 Derivative financial instruments                                      1 346                 -               -    
 Current taxation liabilities                                          1 424             2 385           2 009    
 Total equity and liabilities                                     18 091 986        16 975 768      18 355 219    
 Net asset value per share (cents)(1)                                  1 851             1 774           1 842    
 (1) Excluding non-controlling interest.


Unaudited condensed consolidated statement OF profit or loss for the six months ended 30 September 2016

                                                                                Unaudited         Unaudited          Audited    
                                                                             30 September      30 September         31 March    
                                                                                     2016              2015             2016    
 Group                                                                               R000              R000             R000    
 Property revenue                                                               1 087 344         1 005 368        2 096 400    
 Straight-line rental income accrual                                              (57 379)           51 995          243 221    
 Gross property revenue                                                         1 029 965         1 057 363        2 339 621    
 Property expenses                                                               (382 111)         (368 353)        (780 584)   
 Net profit from property operations                                              647 854           689 010        1 559 037    
 Net income from asset management business                                              -             8 971            2 074    
 Corporate and administrative expenses                                            (51 653)          (41 888)         (84 288)   
 Investment and other income                                                       61 038            34 530           99 337    
 Operating profit before finance costs                                            657 239           690 623        1 576 160    
 Finance costs                                                                   (210 968)         (180 491)        (394 301)   
 Profit before capital items                                                      446 271           510 132        1 181 859    
 Loss on sale of investment properties                                            (65 316)          (22 276)         (31 883)   
 Fair value gain/(loss) on listed property securities                              47 186           (75 779)         (98 425)   
 Fair value movement of derivative financial instruments                           (6 337)             (215)          (1 342)   
 Foreign exchange profit                                                           60 768                 -           26 825    
 Profit on sale of listed property securities                                           -                 -              547    
 Gain on bargain purchase                                                               -            11 669            1 053    
 Goodwill written-off on sale of properties by a subsidiary                             -                 -           (4 951)   
 Realised loss on interest rate hedge                                                (635)                -                -    
 Cost of acquisition of business combination                                            -              (283)          (1 230)   
 Loss on sale of intangible asset                                                       -               (30)               -    
 Profit before fair value adjustments                                             481 937           423 218        1 072 453    
 Fair value adjustments                                                           388 062           356 216          560 049    
 Gross change in fair value of investment properties                              330 683           408 211          803 270    
 Straight-line rental income adjustment                                            57 379           (51 995)        (243 221)   
 Profit before equity-accounted investment                                        869 999           779 434        1 632 502    
 Share of income from associate                                                    28 228                 -           19 423    
 Profit before taxation                                                           898 227           779 434        1 651 925    
 Taxation                                                                          (2 510)           (6 868)          (9 076)   
 Profit for the period                                                            895 717           772 566        1 642 849    
 Attributable to owners of parent                                                 863 021           747 570        1 586 079    
 Attributable to non-controlling interests                                         32 696            24 996           56 770    
 Other comprehensive (loss)/income                                                                                              
 Items that will be reclassified subsequently to profit or loss                                                                 
 Currency loss on translation of investment in associate                         (118 047)                -           (7 377)   
 Cash flow hedges                                                                 (60 839)           26 594           40 673    
 Available for sale financial assets - current period loss                         (6 697)          (10 160)         (21 498)   
 Other comprehensive (loss)/income for the period                                (185 583)           16 434           11 798    
 Total comprehensive income for the period                                        710 134           789 000        1 654 647    
 Total comprehensive income attributable to:                                      677 438           764 004        1 597 664    
 Owners of parent                                                                                                               
 Non-controlling interest                                                          32 696            24 996           56 983    
 Basic and diluted earnings per share (cents)(I)                                   130.07            124.81           249.55    
 Weighted average number of shares                                            663 514 893       598 960 127      635 569 998    
 Number of shares                                                             690 643 418       638 155 312      647 667 287    
 (I) Vukile has no dilutionary shares in issue.                                                                                  


Unaudited reconciliation of earnings to headline earnings and to profit available for distribution
for the six months ended 30 September 2016
                                                                               Unaudited                       Unaudited                    Audited
                                                                            30 September 2016             30 September 2015              31 March 2016
                                                                            Group        Cents          Group        Cents            Group          Cents     
                                                                             R000    per share           R000    per share             R000      per share    
 Attributable profit to owners of the parent                              863 021       130.07        747 570       124.81        1 586 079         249.55    
 Earnings per share                                                       863 021       130.07        747 570       124.81        1 586 079         249.55    
 Change in fair value of investment properties (net of allocation to                                             
 non-controlling interest)                                               (375 298)      (56.56)      (356 216)      (59.47)        (546 188)        (85.94)   
 Gain on bargain purchase                                                       -            -        (11 669)       (1.95)          (1 053)         (0.17)   
 Write-off of goodwill on sale of properties sold by a subsidiary               -            -              -            -            4 951           0.78    
 Loss on sale of investment properties                                     65 316         9.84         22 276         3.72           31 883           5.02    
 Profit on sale of listed securities                                            -            -              -            -             (547)         (0.08)   
 Fair value earnings of associate-adjusted headline earnings                    -            -              -            -           (7 353)         (1.16)   
 Loss on sale/impairment of intangible asset                                    -            -             30            -                -              -    
 Headline earnings of shares                                              553 039        83.35        401 991        67.11        1 067 772         168.00    
 Straight-line rental accrual                                              57 379         8.65        (51 995)       (8.68)        (243 221)        (38.27)   
 Revaluation (surplus)/loss on listed investments                         (47 186)       (7.11)        75 779        12.65           98 425          15.49    
 Cost of acquisition of business combination                                    -            -            283         0.05            1 230           0.19    
 Fair value movement of derivative financial instruments                    6 337         0.96            215         0.04            1 342           0.21    
 Foreign exchange profit                                                  (60 768)       (9.16)             -            -          (26 825)         (4.22)   
 Add: Non-IFRS adjustments                                                                                                                                    
 Project management fees received from sale of the Sanlam Asset                                                  
 Management business(II)                                                    4 000         0.60          4 000         0.67            8 000           1.26    
 Shares issued cum dividend                                                27 366         4.12         61 530        10.27           63 024           9.92    
 Fair value earnings of associate - headline earnings adjustment                -            -              -            -            7 353           1.16    
 Dividends receivable from listed securities                                5 620         0.85         13 302         2.22           19 212           3.02    
 Additional dividends distributed on shares issued post                                                          
 31 March 2016(I)                                                         (19 675)       (2.97)       (48 188)       (8.04)               -              -    
 Available for distribution                                               526 112        79.29        456 917        76.29          996 312         156.76    
 Weighted average number of shares in issue                           663 514 893                 598 960 127                   635 569 998                   
 Headline and diluted headline earnings per share                                        83.35                       67.11                          168.00    
 (I)  The R400 million equity issuance in April 2016 gave rise to a higher distribution as the shareholders who participated were entitled to receive the 
      second distribution for the six months ended 31 March 2016.
 (II) Arising from the sale of the asset management business to Sanlam, where the amounts receivable in 2016 totalling R16 million were present valued 
      and offset against the loss on sale of the business, in terms of IFRS requirements.


Unaudited condensed consolidated statement of cash flow for the six months ended 30 September 2016

                                                                    Unaudited         Unaudited          Audited    
                                                                 30 September      30 September         31 March    
                                                                         2016              2015             2016    
                                                                         R000              R000             R000    
 Cash flow from operating activities                                  650 543           614 991        1 282 448    
 Cash flow from investing activities                                1 005 786          (910 086)      (2 124 333)   
 Cash flow from financing activities                               (1 118 288)          494 159        1 300 455    
 Net increase in cash and cash equivalents                            538 041           199 064          458 570    
 Cash and cash equivalents at the beginning of the period             932 459           473 889          473 889    
 Cash and cash equivalents at the end of the period                 1 470 500           672 953          932 459    
 Major items included in the above:                                                                                 
 Cash flow from operating activities                                                                                
 Profit before tax                                                    898 227           779 434        1 651 925    
 Adjustments                                                         (233 220)         (165 856)        (402 521)   
 Cash flow from investing activities                                                                                
 Acquisition of and improvements to investment properties            (263 836)         (958 039)      (1 578 544)   
 Acquisition of associate                                                   -                 -         (758 570)   
 Net proceeds on sale of investment properties                      1 201 206           185 699          327 356    
 Cash flow from financing activities                                                                                
 Issue of shares                                                      709 093         1 221 380        1 347 944    
 Dividends paid                                                      (581 816)         (493 144)        (937 494)   
 Finance costs                                                       (210 968)         (180 491)        (389 522)   
 Interest-bearing borrowings (repaid)/advanced                     (1 033 252)          567 930        1 280 901    


Unaudited condensed consolidated statement of changes in equity for the six months ended 30 September 2016

                                                 Share           Non-                                            Non-              
                                               capital      distribu-                         Share-      controlling                    
                                             and share          table       Retained        holders'         interest                    
 R000                                          premium       reserves       earnings        interest             (NCI)          Total          
 GROUP                                                                                                                                   
 Balance at 30 September 2015                6 893 721      4 021 688        407 707      11 323 116          562 135      11 885 251    
 Issue of shares                               174 842              -              -         174 842                -         174 842    
 Dividend                                            -              -       (408 499)       (408 499)         (26 184)       (434 683)   
                                             7 068 563      4 021 688           (792)     11 089 459          535 951      11 625 410    
 Profit for the period                               -              -        838 509         838 509           31 774         870 283    
 Change in fair value of investment 
 properties                                          -        401 431       (395 059)          6 372           (6 372)              -    
 Change in fair value of investments 
 attributable to non-controlling interest            -        (13 860)        13 860               -                -               -    
 Share-based remuneration                            -          8 459              -           8 459                -           8 459    
 Deferred taxation on change in fair 
 value of derivative                                 -        (10 417)             -         (10 417)               -         (10 417)   
 Transfer to non-distributable reserves              -          2 384         (2 384)              -                -               -    
 Gains from change in shareholding in 
 subsidiary                                          -          5 041              -           5 041           (5 863)           (822)   
 Non-controlling interest arising on 
 business combination                                -              -              -               -              978             978    
 Revaluation of investments                          -        (22 646)        22 646               -                -               -    
 Other comprehensive loss                            -         (4 849)             -          (4 849)             213          (4 636)   
 Balance at 1 March 2016                     7 068 563      4 387 231        476 780      11 932 574          556 681      12 489 255    
 Issue of shares                               709 093              -              -         709 093                -         709 093    
 Dividend                                            -              -       (558 055)       (558 055)         (23 761)       (581 816)   
                                             7 777 656      4 387 231        (81 275)     12 083 612          532 920      12 616 532    
 Profit for the period                               -              -        863 021         863 021           32 696         895 717    
 Change in fair value of investment
 properties                                          -        330 683       (330 683)              -                -               -    
 Change in fair value of investments 
 attributable to non-controlling interest            -        (12 764)        12 764               -                -               -    
 Share-based remuneration                            -          8 706              -           8 706                -           8 706    
 Deferred taxation on change in fair 
 value of derivative                                 -         16 161              -          16 161                -          16 161    
 Transfer from non-distributable reserves            -        (85 186)        85 821             635                -             635    
 Revaluation of investments                          -         47 186        (47 186)              -                -               -    
 Other comprehensive loss                            -       (185 583)             -        (185 583)               -        (185 583)   
 Balance at 30 September 2016                7 777 656      4 506 434        502 462      12 768 552          565 616      13 352 168    


Notes to the condensed financial statements 
for the six months ended 30 September 2016

1. Measurements of fair value
   1.1 Financial instruments
       The financial assets and liabilities measured at fair value in the statement of financial position are grouped into the fair 
       value hierarchy as follows:                                                                                        
                                                                   September 2016                         September 2015
                                                       Level 1       Level 2         Total      Level 1       Level 2         Total    
       GROUP                                              R000          R000          R000         R000          R000          R000    
       ASSETS                                                                                                                          
       Investments                                     375 433             -       375 433      359 020             -       359 020    
       Available-for-sale financial assets              55 294             -        55 294       60 423             -        60 423    
       Derivative financial instruments                      -         1 015         1 015            -        16 326        16 326    
       Total                                           430 727         1 015       431 742      419 443        16 326       435 769    
       LIABILITIES                                                                                                                     
       Available-for-sale financial liabilities              -       (22 930)      (22 930)           -       (29 313)      (29 313)   
       Derivative financial instruments                      -       (25 575)      (25 575)           -        (1 571)       (1 571)   
       Total                                                 -       (48 505)      (48 505)           -       (30 884)      (30 884)   
       Net fair value                                  430 727       (47 490)      383 237      419 443       (14 558)      404 885 
   
                                                                    March 2016
                                                       Level 1       Level 2         Total  
       GROUP                                              R000          R000          R000  
       ASSETS                                                                               
       Investments                                     328 247             -       328 247  
       Available-for-sale financial assets              57 324             -        57 324  
       Derivative financial instruments                      -        42 475        42 475  
       Total                                           385 571        42 475       428 046  
       Available-for-sale financial liabilities              -       (37 482)      (37 482) 
       Derivative financial instruments                      -        (5 269)       (5 269) 
       Total                                                 -       (42 751)      (42 751) 
       Net fair value                                  385 571          (276)      385 295  
   
   Measurement of fair value
   The methods and valuation techniques used for the purpose of measuring fair value are unchanged compared to the previous
   reporting period.

   Investments
   This comprises shares held in listed property companies at fair value which is determined by reference to quoted closing
   prices at the reporting date.

   Available-for-sale financial assets
   This comprises equity-settled share-based long-term incentive reimbursement rights stated at fair value. Fair value has 
   been determined by reference to Vukile's quoted closing price at the reporting date after deduction of executive and 
   management rights.

   Derivative financial instruments
   The fair values of these swap contracts are determined by Absa Capital, Rand Merchant Bank, Standard Bank and Investec 
   Bank Limited using a valuation technique that maximises the use of observable market inputs. Derivatives entered into by 
   the group are included in level 2 and consist of interest rate swap contracts.

   1.2 Non-financial assets                                                                     
       The following table reflects the levels within the hierarchy of non-financial assets measured at fair value at:
                                                   September       September           March    
                                                        2016            2015            2016    
                                                     Level 3         Level 3         Level 3    
       GROUP                                            R000            R000            R000    
       ASSETS                                                                                   
       Investment properties                      12 026 349      14 625 276      13 737 892    
       Investment properties held for sale         2 936 080         145 350       1 997 744    
   
       Fair value measurement of non-financial assets (investment properties)
       The fair value of commercial buildings are estimated using an income approach which capitalises the estimated rental 
       income stream, net of projected operating costs, using a discount rate derived from market yields. The estimated rental 
       stream takes into account current occupancy levels, estimates of future vacancy levels, the terms of in-place leases 
       and expectations of rentals from future leases over the remaining economic life of the buildings.

       The most significant inputs, all of which are unobservable, are the estimated rental value, assumptions regarding vacancy 
       levels, the discount rate and the reversionary capitalisation rate. The estimated fair value increases if the estimated 
       rental increases, vacancy levels decline or if discount rates (market yields) and reversionary capitalisation rates 
       decline. The overall valuations are sensitive to all four assumptions. Management considers the range of reasonable 
       possible alternative assumptions is greatest for reversionary capitalisation rate, rental values and vacancy levels and 
       that there is also an interrelationship between these inputs. The inputs used in the valuations at 30 September 2016 were:      
       - The range of the reversionary capitalisation rates applied to the portfolio are between 8.0% and 16.8% (March 2016: 
         between 7.8% and 16.5%) with the weighted average being 9.6% (March 2016: 9.7%).
       - The discount rates applied range between 12.8% and 19.6% (March 2016: between 12.8% and 19.6%) with the weighted 
         average being 14.2% (March 2016: 14.2%).

       In determining future cash flows for valuation purposes, vacancies are forecast for each property based on estimated
       demand.

       Sensitivity analysis
       The effect on the fair value of the portfolio of a 0.25% increase in the discount rate would result in a decrease in 
       the fair value of R389 million (2.6%) (March 2016: R420 million (2.7%)). The average discount rate on the portfolio 
       would increase from 14.2% to 14.5% (March 2016: 14.5%) and the average exit capitalisation rate would increase from 
       9.6% to 9.9% (March 2016: 9.9%) due to the interlinked nature of the rates. The analysis has been prepared on the 
       assumption that all other variables remain constant.                                                                                                                                                                                                               

JSE sponsor: Java Capital 

NSX sponsor: IJG Group, Windhoek, Namibia 

Executive directors: LG Rapp (chief executive), MJ Potts (financial director), HC Lopion (executive director: asset
management), GS Moseneke

Non-executive directors: AD Botha (chairman), PS Moyanga, SF Booysen, RD Mokate, H Ntene, NG Payne, HM Serebro

There have been no changes to the board of directors since the release of the previous results announcement.

Registered office: Ground floor, One-on-Ninth, Cnr Glenhove Road and Ninth Street, Melrose Estate, 2196

Company secretary: J Neethling 

Transfer secretaries: Link Market Services South Africa (Pty) Ltd, Braamfontein, Johannesburg 

Investor and media relations: Marketing Concepts, 10th Floor, Fredman Towers, 13 Fredman Drive, Sandton, Johannesburg,
South Africa, Telephone +27 11 783 0700, Fax +27 11 783 3702

www.vukile.co.za
Date: 24/11/2016 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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