INTERIM RESULTS PRESENTATION...RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 AUGUST 2017 CORPORATE HIGHLIGHTS UP TO INTERIM RESULTS PRESENTATION 2017 6 46.40 cents per share Increased

P RO P E R T Y F U N D

INTERIM RESULTS PRESENTATIONfor the six months ended 31 August 2017


AGENDAIntroduction & Highlights

Financial Review

Portfolio Review

Conclusion

Questions & Answers

Annexures

01

02

03

04

05

06


INTRODUCTION & HIGHLIGHTSSandile Nomvete

RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 AUGUST 2017

INTRODUCTION TO DELTA4

75.9%

Sovereign underpinnedJSE listed REIT

R5.3bn

Marketcapitalisation of

Pretoria & Durban CBDs

Dominant in

R104.9m

Average property value of

R11.7bn

Assets under management of

of revenue from sovereign tenants short term as at 31 August 2017

by 100% black-owned asset manager

GCR credit ratingreaffirmed

A2(za)

BBB+(za)long term


HIGHLIGHTS SINCE LISTING5

Investment Portfolio Growth - Rands (bn)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

12.0

13.0

Nov-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Feb-16 Aug-16 Dec-16 Mar-17 Apr-17 Aug-17 Sep-17 Oct-17

Mar-17: Submitted bulk lease renewal proposal for 243,000m2 to DPW (PMTE)

Aug-17: DPW Treasury negotiation team has evaluated bulk proposals and are now negotiating with the landlords

Oct-17: Settled R125million DMTN unsecured facility

Oct-17: Refinanced US$12 million Bank of China facility

Nov-12: Delta lists on the JSE main board with a portfolio value of R2.1 billion

Jul-13: Launches R2 billion

Domestic Medium Term Note Programme

Feb-14: Surpasses pre-listing target of a R7 billion asset portfolio. REIT Status approved

Jun-14: Launches and lists Delta International (rebranded to Mara Delta), the first specialist pan-African focused property fund to be listed on JSE

Aug-16: Balance sheet strengthened, gearing reduced to 41%. Portfolio GLA surpasses 1 million m2

* Graph includes market value of listed investments

April-17: Proposed BEE transaction

Dec-16: Refinanced R462 million DCM

Oct-17: BEE Transaction receives PMC approval


CORPORATE HIGHLIGHTS UP TO INTERIM RESULTS PRESENTATION 20176

46.40 cents per share

Increased half-year distribution by 1.0% to

R329.7million

Increased half-year distributable earningsby 5.3% to

18.1 days

Debtors well managed at

Vacancy at

71 661m2

Renewed

48 590m²

Concluded

of new leases

11.3%of existing leasesSAPOA: 11.8%


SNAPSHOT7

31 August 2017 28 February 2017 31 August 2016Shares in issue 710,632,182 710,632,182 710,632,182

Market capitalisation R5.3 billion R5.9 billion R4.6 billion

NAV per share R9.74 R9.9 R9.9

No. of properties 108 112 115

Valuation of property portfolio R11.3 billion R11.4 billion R11.4 billion

Average value per property R104.9 million R101.6 million R98.8 million

Gross lettable area 973,431 m² 981,777 m² 1,003,028 m²

Tenant Sectorial profile (GLA) Office - Sovereign: 71.7% Office - Sovereign: 70.7% Office - Sovereign: 71.1%

Office - Other: 17.8% Office - Other: 19.4% Office - Other: 19.0%

Industrial: 3.8% Industrial: 3.1% Industrial: 3.1%

Retail: 6.7% Retail: 6.8% Retail: 6.8%

Vacancy rate 11.3% 10.7% 9.2%

Weighted average rent (per m2) R108.1 R105.2 R102.7

Weighted Average Lease Expiry # (years) 1.8 1.7 2.0

Weighted average in force escalation* 7.3% 6.9% 7.1%

Loan to value 42.3% 41.5% 41.0%

Fixed % 82.3% 81.5% 84.1%

Weighted Average Cost of Debt 9.2% 9.2% 9.0%

Listing date: 02 November 2012 JSE classification: Real Estate Holdings & Development

Asset manager: Delta Property Asset Management (Pty) Ltd JSE code: DLT

Asset management fee: 0.35% of enterprise value

# By revenue

* Rate pre bulk renewals


FINANCIAL REVIEWShaneel Maharaj


FINANCIAL HIGHLIGHTS UP TO INTERIM RESULTS PRESENTATION 20179

42.3%

Loan to value of

R715m

Successfully refinancedand settled

82.3%

Fixed debt of

Debtors well managed at

73.8%

Property operating margin at

2.4

Interest cover ratio

(Feb 2017: 41.5%) of debt facilities (Feb 2017: 85.1%)

(Feb 2017: 2.5)

18.1 daysin tough

economic environment


FINANCIAL REVIEW

31 August 2017 31 August 2016 28 February 2017

Revenue (R’000) 782,341 757,292 1,617,344

Net property income (R’000) 576,376 550,585 1,153,341

Finance costs (R’000) (235,967) (228,638) (470,580)

Cost to income ratio (net / gross) 11.0% / 26.2% 10.2% / 27.2% 12.4% / 28.8%

Investment property (R’000) 11,330,429 11,357,790 11,381,421

Listed securities as quoted on the JSE - GRIT (R’000) 379,482 459,435 429,588

Borrowings (R’000) 5,035,744 5,004,118 5,099,227

Loan to value (LTV) 42.3% 41.0% 41.5%

Interest cover ratio (31 Aug 2016) 2.4 2.4 2.5

Weighted average interest rate 9.2% 9.0% 9.2%

Average debt expiry period (years) 1.6 2.1 1.9

Average debt fix expiry period (years) 1.8 2.1 2.2

Fixed % * 82.3% 84.1% 85.1%

Net asset value per share R9.74 R9.86 R9.91

* Figures restated to exclude revolver facilities

10


DISTRIBUTABLE INCOME STATEMENT

31 August 2017 31 August 2016 28 February 2017

Net property income 576,376 550,585 1,153,341

Straight-line rental income accrual 699 (59) (4,863)

Administration expenses (45,949) (41,330) (68,169)

Realised foreign exchange (loss)/gain (259) 112 -

Net finance costs (after interest income) (223,127) (215,055) (443,412)

Dividend income from associate - GRIT 18,587 18,851 37,990

Sundry income 19 15 6,215

Retained distributable earnings 3,378 - (3,378)

Distributable income for the period 329,724 313,119 677,724

Number of shares in issue 710,632,182 710,632,182 710,632,182

Number of shares entitled to distribution 710,632,182 681,722,806 710,632,182

Distribution per share (cents) 46.40 45.93 97.24

11


GROWTH IN DISTRIBUTIONS

23.7

32.5

40.2

72.7

40.0 44.1

84.1

42.9 47.9

90.8

45.9 51.3

97.24

46.4

97.24

FY2013 H1 Aug-13 H2 Feb-14 FY2014 H1 Aug-14 H2 Feb-15 FY2015 H1 Aug-15 H2 Feb-16 FY2016 H1 Aug-16 H2 Feb-17 FY2017 H1 Aug-17 FY2018(target)

7.1%

1.0%

0%H1 – Interim

H2 – Final

Total – Full year

12

Historic distribution per share (cents/share)

15.6%

9.6% 7.2%23.1%

8.7% 7.1%7.1%

8.0%


DISTRIBUTABLE EARNINGS BRIDGE

313 119

41 758 3 378 (367) (264) (4 619)(8 072) (15 209)

329 724

H1 Aug 2016 Existing portfolio(ex Straight-line)

Retaineddistribution

Forex/Sundryincome

Dividend income(GRIT)

Admin costs Net finance costs Disposals H1 Aug 2017

200 000

220 000

240 000

260 000

280 000

300 000

320 000

340 000

360 000

380 000

400 000

13

R’000


LIKE-FOR-LIKE NET PROPERTY INCOME ANALYSIS

Description Amount (R) %

Net Property Income (NPI) Aug 2016 550 585 000

Increased NPI from base portfolio held at 31 Aug 2016 41 000 256 7.4%

NPI attributable to disposals post 31 Aug 2016 (15 209 256) -2.8%

NPI Aug 2017 576 376 000 4.7%

Increased NPI from base portfolio held at 31 Aug 2016 41 000 256 7.4%

Time weighting of acquisitions concluded in H1 Aug 2016 (3 435 960) -0.6%

Like-for-like increase in NPI 37 564 296 6.8%

14


STATEMENT OF FINANCIAL POSITION

R’000 31 August 2017 31 August 2016 28 February 2017 Change % (Aug ‘17 v Feb 17)

ASSETS

Non-Current assets held for sale 10 525 979 10 567 801 10 448 271 0,7%

Investment property 10 124 585 10 155 844 10 053 921 0,7%

Fair value of property portfolio 9 934 190 9 969 666 9 861 449 0,7%

Straight line rental income accrual 190 395 186 178 192 472 (1,1%)

Investment in associate (equity accounted) - GRIT 398 304 403 954 391 013 1.9%

Other non-current assets 3 090 8 003 3 337 (7,4%)

Current assets 413 446 506 280 583 563 (29,2%)

Non-current assets held-for-sale 1 205 844 1 201 946 1 327 500 (9,2%)

Total assets 12 145 269 12 276 027 12 359 334 (1,7%)

EQUITY AND LIABILITIES

Equity (31 Aug 2017) 6 920 648 7 007 810 7 041 616 (1,7%)

Liabilities 5 224 621 5 268 217 5 317 718 (1,8%)

Non-current liabilities 3 079 037 4 039 368 4 142 269 (25.7%)

Current liabilities (31 Aug 2017) 2 145 584 1 228 849 1 175 449 82.5%

Total equity and liabilities 12 145 269 12 276 027 12 359 334 (1,7%)

15


NAV BRIDGE

9.91

0.43 0.03(0.51)

(0.07)(0.04)

9.74

28 Feb 2017 Contribution fromoperations

Contribution ofassociate

Dividend paid Disposals Fair value of financialinstruments and forex

31 Aug 2017

9.50

9.60

9.70

9.80

9.90

10.00

10.10

10.20

10.30

10.40

10.50

16

Rands


DEBT SUMMARY

As at 31 August 2017

Facility Type R’ m Weighted Ave. Rate

Floating bank facilities 3 507 9.2%

Fixed bank facilities 796 8.9%

Revolving bank facilities 640 9.3%

Total bank facilities 4 943 9.2%

DMTN programme - floating 125 9.4%

Total borrowings, net of accrued interest 5 068 9.2%

Accrued interest 4 N/A

TOTAL borrowings including interest 5 072

Total fixed bank facilities 796 8.9%

Interest rate swap contracts 2 720 7.4%

Cross currency swaps 125 Libor + 3.3%

Total fixed 3 641

Fixed % excluding revolving bank facilities: 82.3% 9.2%

17


Source of Debt

94.4%

2.5% 3.1%

ZAR Banking Facilities (R4,787m)

DMTN Programme (R,125m)

USD Banking Facilities (R,156m)

Debt Classification

69.2%

15.7%

12.6%2.5%

Floating Bank Facilities (R3,507m)

Fixed Bank Facilities (R,796m)

Revolving Bank Facilities (R,640m)

Unsecured Com. Paper (R,125m)

18

GRAPHICAL DEBT ANALYSIS

Financier Split

63.4%17.5%

2.5%

13.5%3.1%

Nedbank (R3,214m)

Standard Bank (R888m)

Debt Capital Markets (R125m)

Investec (R685m)

Bank of China (R156m)

Fixed Debt Breakdown

74.7%

21.9%

3.4%

Swap Contracts (R2,720m)

Fixed Banking Facilities (R796m)

Cross Currency Swaps (R125m)


DEBT EXPIRY PROFILE

0

100

200

300

400

500

600

700

800

900

1 000

1 100

1 200

1 300

1 400

1 500

28-Feb-18 28-Feb-19 28-Feb-20 28-Feb-21 28-Feb-22

Debt Expiry Profile

DMTN Programme Fixed Bank Facilities Floating Bank Facilities Revolving / Liquidity Bank Facilities Vendor Loans Swap Contracts

19

R mil


DEBT EXPIRY PROFILE

As at 31 August 2017

Financier Type Expiry R’ m

FY2018 Expiry

Bank of China 3 year term facility Refinanced Oct 17 156

Standard Bank 3 year term facility 25 Sep 2017 86

Standard Bank 3 year term facility 30 Nov 2017 12

Nedbank 5 year term facility 2 Nov 2017 324

Nedbank 1 year term facility 17 Dec 2017 40

TOTAL 618

FY2019 Expiry

Standard Bank 5 year term facility 31 May 2018 128

Standard Bank 3 year term facility 27 Jul 2018 41

Nedbank 5 year term facility 2 May 2018 270

Nedbank 2 year term facility 12 May 2018 200

Nedbank 2 year term facility 1 Jun 2018 380

Nedbank 5 year term facility 18 Jul 2018 80

Nedbank 5 year term facility 2 Aug 2018 100

TOTAL 1,198

20


DEBT COMMENTARY

➢ During the current year Delta has successfully refinanced and settled R715m as follows:

• refinanced R434 million in vanilla debt up to Aug 17

• refinanced R156 million in vanilla debt post Aug 17

• settled R125 million unsecured note in DMTN program post Aug 17 with vanilla funding

➢ Delta’s loan to value ratio has increased to 42.3% (2017: 41.5%), impacted by the disposal of non-current assets held for sale (R121.6million), devaluation of its investment in GRIT (R50.1million) and realisation of the loan with Baystone on disposal of the investment (R58million)

➢ Weighted average all in cost of debt increased to 9.2% (2016: 9.0%) due to higher rates on facility renewals and longer term interest rate swaps concluded

➢ Fixed debt decreased to 82.3% (2016: 84.1%) due to the expiry of a R160million swap fixed at 7.3%

➢ Average debt expiry and average fix expiry metrics were 1.6 (2016: 1.9) and 1.8 (2016: 2.1) respectively

21


PORTFOLIO REVIEWOtis Tshabalala


OPERATIONS HIGHLIGHTS UP TO INTERIM RESULTS PRESENTATION 201723

71.7%

A distinct focus on sovereign tenants

71 661m²

Vacancies of

243 000m²

being sovereign tenants (by GLA)

Bulk lease renewal proposal to DPW

(PMTE)

62 leases nationally

11.3%

(SAPOA average 11.8%)

Total lease renewals in a challenging

environment

48 590m²

Total new leases concluded (GLA)

including 24 727 m2 concluded

post 31 August 2017

Rental income attributed to sovereign

tenants

75.9%


Buildings represented by Province Representative Tenants

24

A STRATEGY DESIGNED TO MAXIMISE ON SECURE AND STABLE INCOME

North West

Limpopo

MpumalangaGauteng

KwaZulu Natal

Free State

Eastern Cape

Northern Cape

Western Cape

Nr of Buildings GLA (m2)

Gauteng 39 425 771

KwaZulu-Natal 17 278 316

Free State 17 85 506

Mpumalanga 11 30 251

Limpopo 7 44 885

Northern Cape 7 37 316

Western Cape 5 41 889

Eastern Cape 2 23 717

North West 2 5 780

TOTAL 108 973 431


GOVERNMENT PRECINCT | PRETORIA25


NODAL ANALYSIS | PRETORIA26

1 – 9

Delta owned

properties

14

CGI Building

(DPW Head Office)

10

ABSA Towers

15

AVN Building

(DPW occupied)

11

Momentum building

16

State Theatre

12

Treasury

17

Sammy Marks

Shopping Centre

13

Telkom Towers

18

Intended new

municipal HQ


NODAL ANALYSIS | DURBAN

1 – 14Delta owned

properties

19SAHARA Park

Kingsmead

15Durban International

Convention Centre

20South Beach

16Durban City Hall

21Redefine Towers

17Workshop Mall

(Old Railway Workshop)

22Commercial City

Building

18Durban Marina

23Durban Bay House

27


NODAL ANALYSIS | BLOEMFONTEIN

1 – 13Delta owned

properties

19“Fourth” Raadsaal

14Hoffman Square

20Bloemfontein City Hall

15Sand du Plessis Theatre

21:CR Swart Building

16Waterfront Mall

22Lebohang Building

17Loch Logan

23Bram Fisher Building

18Appeal Court

24Liberty Life Building

28


PORTFOLIO BREAKDOWN

Office -Sovereign *

Office - Other Industrial Retail Total

Number of properties 82 19 4 3 108

Gross lettable area (m2) 681,429 228,003 40,258 23,741 973,431

Vacancy (%) 10.2% 14.0% 19.0% 3.7% 11.3%

Value R8.4bn R2.5bn R0.2bn R0.3bn R11.3bn

Average rental (R/m2) # 114.4˄ 92.6 51.6 114.0 108.1

Weighted ave. escalation (%) # 7.2% 7.8% 8.0% 7.9% 7.3%

Weighted ave. lease expiry (by revenue) - by building type

1.6 years 2.1 years 1.7 years 5.8 years 1.8 years

Weighted ave. lease expiry (by revenue) - tenant specific #

1.5 years 2.2 years 1.7 years 3.5 years 1.8 years

Cost to income ratio (net) 8.1% 27.9% 7.2% 25.4% 11.0%

Cost to income ratio (gross) 22.8% 43.8% 24.9% 37.5% 26.2%

˄ Rental as at interim; renewals not yet in effect

29


GLA - by building

70.0%

23.4%

4.1% 2.5%

Office - Sovereign (70.0%)

Office - Other (23.4%)

Industrial (4.1%)

Retail (2.5%)

GLA - by tenant*

71.7%

17.8%

6.7% 3.8%



Retail (6.7%)

Industrial (3.8%)

30

SECTORAL SPLIT

Rental - by building

75.4%

20.8%

2.0%1.8%



Retail (2.0%)

Industrial (1.8%)

Rental - by tenant

75.9%

15.2%

7.1% 1.8%


Office - Other(15.2%)

Retail (7.1%)

Industrial (1.8%)

*Excludes vacancies. Analysis focuses on what category the specific tenant falls into, rather than the category of the building


Tenant Profile by GLA

71.7%

17.8%

6.7%

3.8%

37.9%

15.5%

12.5%

5.8%

Office - Sovereign

Office - Other

Retail

Industrial

Tenant Profile by Rental

75.9%

15.2%

7.1%

1.8%

37.0%

20.8%

11.8%

6.3%

National Government

ProvincialGovernment

Local Government

State-OwnedEnterprise

31

DETAILED TENANT BREAKDOWN

Excludes vacancies. Total occupied GLA = 863,382 m2


UPDATE ON SOVEREIGN TENANTS

➢ The current year has been challenging economically, coupled with the delays in signing the new leasing policy and the staff changes at Department of Public Works

➢ There have been some major changes in the Property Management Trading Entity/DPW senior structures • Head of PMTE (Mr. Paul Serote) departed end of August 2017 returning to the private sector

• DG (Mr. Mziwonke Dlabantu) departed end of September 2017 to head up NHBRC

• DDG (Mr. Mandla Sithole) 2nd in command to Paul Serote, departed end of September 2017,redeployed back to Finance

➢ This shake up has resulted in the slowing down of the bulk lease renewal proposals process➢ We take comfort in that they have been replaced by veterans from the old guard at DPW who were at the

helm in the old days when the radical BBBEE policy that favored empowered companies was in place➢ Mr. Sam Vukela who was the DG from 2007 to 2010 has been re-instated as the acting DG

➢ Ms. Lydia Bici, a DPW veteran on Policy and Regulation, who was instrumental in crafting the old BBBEE policy has returned as the acting head of the PMTE

➢ Mr Matlala, a seasoned regional manager from the North West, has been tasked with taking on theDDG position

32


UPDATE ON SOVEREIGN TENANTS

➢ Given that the old guard are pro-transformation, we remain bullish that the policy will now be finalized and implemented by the end of the year

➢ National Treasury and DPW have set up Negotiation Task Teams that will be negotiating the lease renewals once the relevant circulars shall have been issued by end of November 2017

➢ More encouraging is the fact that notwithstanding the non-finalisation of the new Leasing Framework user departments have been able to conclude leases

• where the User Departments are in need of certainty for space

• and where they can prove to DPW and Treasury that they have the budgets available

• Delta’s diversification within its sovereign tenants i.e. National, Provincial, SOEs and Municipalities is paying dividends as evidenced by the renewal and conclusion of new leases despite the delays in implementing the new leasing policy at national level

33


BUSINESS STRATEGY

➢ Delta Property Fund is a REIT that focuses on properties that are leased to The RSA government at all spheres of government be it national, provincial, local government and state owned enterprises

➢ Close to 76% of our income is from sovereign tenants

➢ Sovereign tenants are generally “sticky” tenants and tend to remain in significantly longer than those in the private sector, with most sovereign users historically occupying space for more than 20 years at a time.Do not move easily due to

• the building sizes

• location

➢ The income from sovereign tenants is generally stable and safe income

• reflected in debtors age analysis

34


BUSINESS STRATEGY

➢ To continue being the top sovereign fund in the country

➢ Conservative investment strategy aims to provide high quality space for tenants and a secure and stableincome for investors

➢ We are focused on maintaining high tenancy retention and high occupancy levels

➢ As a result of our current investment strategy on sovereign tenants, we have solid retention rate with anoccupancy rate that is consistently over 90% since listing

35


BUSINESS STRATEGY

SUSTAINABLE BUSINESS PRACTICES

➢ Our internal DPW Task Team is made of 6 people that interact and work closely with DPW at all levels

➢ Whilst we have budgetary constraints we continue to explore greening where possible

DISCIPLINED ASSET MANAGEMENT TEAM

➢ Since listing we have grown the portfolio from R2 billion to R11.3 billion

➢ We have been very selective in the assets that we acquire and have turned down a significant pipeline that does not meet our criteria

➢ Over the last year we have been inward focused on renewing our leases, filling up vacancies and fixing our buildings

➢ We have also identified the non performing assets and are disposing off these assets

➢ Thus far, we have disposed off assets totalling R254.1 million, of which 4 assets to the value of R139.1 million transferred by interim and 1 asset of R115.0 million post interim. These have been done at a haircut of 6.9%. An additional R371 million has been concluded and should transfer in the next 2 months, at a haircut of 0.5%

➢ Once transfer of the latter is complete, the total haircut on all disposals will be 3.2%

36


LEASING UPDATE

➢ A total of 70 leases were renewed measuring 71,661 m2 for the value of R 246 million. Our most notable renewals are :

37

Major leases concluded

37

Building Tenant GLA Term

Smart Xchange Durban Technology 7,940 m² 36 months

Temo Towers Dept. of Agriculture 7,668 m² 36 months

Treasury House Dept. of Finance 7,243 m² 24 months

Std Bank Greyville Standard Bank 6,491 m² 60 months

Sleepy Hollow SARS 4,022 m² 60 months

Liberty Towers Bidvest 3,397 m² 11 months **

TOTAL 36,761 m²

** additional space (2 437m²) committed to Mr Price effective 01 October 2018


LEASING UPDATE cont….

➢ A total of 40 new leases were concluded measuring 48 590m2 for value of R 189,5million. Our most notable new leases are :

Tenant retention

➢ Thanks to the hands on approach of the operations team and the property managers we have managed to achieve a high tenant retention rate and to conclude the abovementioned deals

38

38

Building Tenant GLA Term

Embassy & Delta Towers Ethekwini Municipality 14,680 m² 36 months

Delta Heights Compensation Fund 14,229 m² 36 months

Commission House Dept. of Pubic Enterprises 6,157 m² 36 months

Liberty Towers Mr Price 2,667 m² 120 monthsplus 2 437m² from 01-Oct-18

TOTAL 37,733 m²


REVERSION39

*All rentals quoted are gross rentals # Excludes 24,727m2 renewed post 31 August 2017

Renewals by Sector

Sector No of Leases Total AreaW.A. Term(months)

W.A. Expiry Rate / m2 *

W.A. Achieved Rate / m2 *

Escalation / (Reversion)

W.A. Esc. achieved

Provincial government 2 14,911 30.17 101.82 116.34 +14% 7.51%

State-owned enterprise 3 5,133 60.00 131.47 109.53 (17%) 7.88%

Office - other 15 22,243 40.68 84.65 82.08 (3%) 7.54%

Retail 25 4,647 46.07 97.68 104.58 +7% 8.12%

TOTAL 45 46,934 39.99 91.40 95.19 +4% 7.63%

Total leases concluded 1 March 2017 – 31 August 2017

No of Leases Total Area (m2)W.A Term (months)

W.A. Expiry Rate (R / m2) *

W.A. Achieved Rate (R / m2) *


W.A. Esc. achieved

Renewed leases # 45 46,934 39.99 91.40 95.19 +4% 7.63%


LEASING | OUTLOOK40

Anticipated budgeted sovereign renewals

Sector No of Leases Total AreaW.A. ExpiryRate / m2 *

W.A. ProposedRate / m2 *


Leases on month-to-month or expiring by 28 February 2018

National government 44 197,400 99.72 94.75 (4.98%)

Provincial government 12 46,363 120.59 112.70 (6.54%)

Local government 2 34,977 116.83 112.85 (3.41%)

State-owned enterprise 4 3,703 89.65 93.84 4.68%

TOTAL 62 282,443 105.13 99.92 (4.95%)

*All rentals quoted are gross rentals


Total portfolio - by GLA

Vacant (11.3%)

Month to Month (25.2%)

28 Feb 18 (8.8%)

28 Feb 19 (13.8%)

29 Feb 20 (11.3%)

28 Feb 21 (18.7%)

28 Feb 22 (5.0%)

Beyond 28 Feb 2022 (5.9%)

Total portfolio - by rental

Month to Month (25.5%)

28 Feb 18 (10.3%)

28 Feb 19 (18.7%)

29 Feb 20 (12.4%)

28 Feb 21 (19.4%)

28 Feb 22 (6.5%)

Beyond 28 Feb 2022 (7.2%)

41

LEASE EXPIRY PROFILE AT 31 AUGUST 2017


GLA - by buildingGauteng (43.8%)Kwazulu-Natal (28.6%)Free State (8.8%)Limpopo (4.6%)Western Cape (4.3%)Northern Cape (3.8%)Mpumalanga (3.1%)Eastern Cape (2.4%)North West (0.6%)

Rental - by buildingGauteng (44.5%)Kwazulu-Natal (25.2%)Limpopo (8.9%)Free State (6.4%)Western Cape (5.3%)Northern Cape (3.4%)Mpumalanga (2.9%)Eastern Cape (2.9%)North West (0.5%)

42

GEOGRAPHICAL AND GRADE SPLIT

Office grade - by GLA

A (14.8%)

B (84.0%)

C (1.2%)

Office grade – by rental

A (19.9%)

B (79.4%)

C (0.7%)


ACQUISITIONS

➢ Delta did not embark on any new acquisitions during the current year, choosing to rather focus inwardly on acquisitions, filling up vacancies and renewal of leases

Investment strategy

➢ Strategy is to continue to focus on:

• Significant assets (> R100million)

• Underpinned by (or have potential for) long term sovereign leases

• Located in nodes attractive to sovereign tenants

43


DISPOSAL OF NON-CORE ASSETS

Rationale➢ Recycling of capital from non-core or non-performing assets to reduce gearing, fund CAPEX, create liquidity for future acquisitions

Past yearTransferred buildings

Samora House• R45.0 million, transfer date 07 Mar 2017

1 Ferreira Street• R11.3 million, transfer date 20 Jun 2017

3 Ferreira Street• R26.7 million, transfer date 20 Jun 2017

Damelin House• R55.8 million, transfer date 05 Jul 2017

Presidia House• R115.0 million, transfer date 13 Oct 2017

5 assets subject to signed sale agreements• R371.6 million, with various conditions precedent still to be met

➢ Delta will continue to dispose of non-core assets with a rational approach to capital allocation in line withinvestment strategy

44


REDEVELOPMENT STRATEGY

Delta to deploy CAPEX into portfolio

➢ Create value uplift to assets

➢ Securing long term stable returns

➢ Provide improved accommodation offering to tenants

➢ Long term benefit to portfolio

➢ Tenant retention

Lease driven to identify assets where greatest value can be added, through value enhancing developments, and activation of under-utilised area or available bulk

Three tier approach to CAPEX

➢ Defensive – compliance

➢ Tenant installation – new and renewed leases

➢ Project specific – value uplift

Original FY2018 budget of R250 million (including projects on next slide)

➢ H1 spent = R67 million

➢ Subject to the renewal of the DPW portfolio, substantial CAPEX will be spend in support of the deployment strategy

45


CONCLUSIONSandile Nomvete


CONCLUSION

Strategy

➢ Continue focusing on pushing forward our advantage of being a Major landlord within the Sovereign underpinned Assets space

➢ Delta will be adaptable and will endeavor to meet the policy requirements from our Sovereign Tenant

Strengthening of balance sheet

➢ In a rapidly changing economic environment the aim is to bring the Gearing to < 40%

➢ Credit rating maintained

➢ Work continues to refinance / term out / settle debt

➢ Progress made with disposal of non-core assets and capital being recycled and allocated more effectively

47


CONCLUSION cont…

Leasing

➢ Difficult environment, HOWEVER, in the current financial year, a total of 120,000m2

GLA was renewedand concluded

➢ Delta continues to retain good management that have a good history in dealing in the sovereign space

Outlook

➢ The Financial benefits derived from the proposed BEE transaction will have a huge impact on the business

➢ The economic environment is expected to remain pressurised, this may have an impact on the Rentals in the medium term. However it will greatly reduce the likelihood of government spending money on new office developments and may offer opportunities for private sector landlords to build on behalf of the State

➢ We remain on track to achieve the full year guidance

48


THANK YOUQuestions & Answers


ANNEXURES


ANNEXURESExecutive management

Board of directors

Disposal of non-core assets

Top 10 properties by value

GLA and vacancy reconciliation

01

04

02

05

03


EXECUTIVE MANAGEMENT52

Executive Directors

Sandile NomveteChief Executive Officer

Exec Dep. & Prop Dev. Prog. (Wits & UCT Business Schools)

Otis TshabalalaChief Operating Officer

Prop Dev. Prog, CCPP

Appointed: 7 June 2016

Shaneel MaharajChief Financial Officer

BCom (Acc) (Hons)(Univ. of Natal), CA(SA), HDipTax

Sandile cofounded Delta Property Fund in 2002, which would go on tolist on the Johannesburg Stock Exchange in 2012. He has since led thecompany to be a predominately sovereign under-pinned fund that isrepresented in all 9 of South Africa’s provinces, growing the value ofits asset base from R2,1 billion at the time of listing to its current valueof R11.4 billion.

Through his leadership, Sandile has managed to position Delta as oneof the most prominent black-owned and black-managed propertyfunds for government and state owned enterprises across SouthAfrica.

Sandile serves as a director on a number of other listed entities,including KAP Limited and GRIT Real Estate Income Group, where he isthe Executive Chairman of the latter. He has more than a decade anda half of experience in executive and non-executive positions.

He is a graduate of the Property Development Programme from theUniversity of Cape Town Graduate School of Business. He also holdsan Executive Development Programme and Finance for non-financialmanagers Diploma from the University of Witwatersrand’s GraduateSchool of Business.

Mr Otis Tshabalala was appointed as COO and an executive director of Delta with effect from 7 June 2016. Otis is a graduate of the Property Development Programme from the University of Cape Town and holds a CCPP from the University of Pretoria and holds several certificates in real estate. Apart from heading up the task team that manages Deltas account with the Department of Public Works, Otis has over 25 years’ experience in the commercial property sector, with more than 12 years spent in the property finance space at Absa Property Finance where he excelled as a Top Dealmaker prior to joining Delta as a Senior Asset Manager. He has a thorough understanding of the business and its strategy.

He is a key member of the team that grew Delta from listing with 20 properties to its current portfolio of 114 assets and has also been instrumental in assisting with Delta’s funding and capital raising.

Shaneel completed his BCom (Honours) degree at the University ofNatal and articled at Deloitte & Touche. He started his career withImperial Fleet Services followed by JSE-listed Cargo Carriers Limited,where he was the Group Financial Manager for three years beforeassuming the role as CFO. He spent six years as CFO of Cargo,assuming a significant role in its overall management including itssubsidiary companies within South Africa and sub-Saharan Africa.

Shaneel joined Delta in December 2015 as CFO assuming a strategicrole in Delta’s overall financial, procurement and IT management. Hewas appointed to the board at year end February 2016.


BOARD OF DIRECTORS53

Non-Executive directors

Independent Non-Executive Chairman

Committees: NRC* (Nomination)

Lead Independent Non-Executive DirectorAppointed 01 April 2017Appointed LID 30 June 2017

Committees: ARC*

Independent Non-Executive DirectorAppointed 01 June 2017

Committees: IC*

Non-Executive Director

Committees: NRC* (Remuneration), SETC

Independent Non-Executive Director

Committees: NRC, SETC*


Committees: IC, ARC

Non-Executive Director

Committees: NRC


Committees: IC, ARC

JBMagwaza

Mfundiso JJ Njeke

Caswell Rampheri

NoorayaKhan

DumoMotua

Nombuso Afolayan

Bronwyn Corbett

IanMacleod

Board CommitteesIC = Investment Committee, ARC = Audit, Risk and Compliance Committee, NRC = Nomination and Remuneration Committee, SETC = Social, Ethics & Transformation Committee* Denotes chairperson


DISPOSAL OF NON-CORE ASSETS

Property Sector Location GLA Sales price (R) Transfer Date

Transferred 27 362 254 100 000

Samora House Office - Sovereign Durban 6 920 45 300 000 07-Mar-17

Damelin Building Office - Other Durban 3 933 55 800 000 05-Jul-17

1 Ferreira Street Office - Other Nelspruit 961 11 300 000 20-Jun-17

3 Ferreira Street Office - Other Nelspruit 2 282 26 700 000 20-Jun-17

Presidia Office - Other Pretoria CBD 12 656 115 000 000 13-Oct-17

Sale agreements concluded 37 318 371 600 000*

Block G Office - Sovereign Pretoria CBD 7 992 225 800 000 End December 2017

14 New Street Office - Other Johannesburg CBD 2 463 16 800 000 End November 2017

Edcon Building Office - Other Johannesburg South 6 188 46 000 000 End December 2017

Top Trailers site 1 Industrial Wadeville, Johannesburg 15 741 50 000 000 End December 2017

Broadcast House Office - Sovereign Mthatha, Eastern Cape 4 934 33 000 000 Early November 2017

8 other non-core assets 61 464 707 900 000#

54

# Total book value at Aug 2017

54


Forum Building

Location Pretoria

Sector*Office -

Sovereign

GLA 41,003 m2

Valuation R661 mil

Hallmark Building

Location Pretoria

Sector*Office -

Sovereign

GLA 26,255 m2

Valuation R407 mil

TOP 10 PROPERTIES

Poyntons

Location Pretoria

Sector*Office -

Sovereign

GLA 73,396 m2

Valuation R477 mil

Liberty Towers

Location Durban

Sector* Office - Other

GLA 40,080 m2

Valuation R402 mil

Delta Towers

Location Durban


GLA 41,677m2

Valuation R375 mil

55

* Building sector determined by majority occupation of a tenant type. Some buildings have different types in occupation


Embassy Building

Location Durban


GLA 32,829 m2

Valuation R347 mil

The Marine

Location Durban


GLA 24,655 m2

Valuation R313 mil

TOP 10 PROPERTIES | CONTINUED

Hensa Towers

Location Polokwane

Sector*Office -

Sovereign

GLA 13,675 m2

Valuation R341 mil

Delta Heights

Location Pretoria

Sector*Office -

Sovereign

GLA 19,122 m2

Valuation R279 mil

Phomoko Towers

Location Polokwane

Sector*Office -

Sovereign

GLA 13,058 m2

Valuation R270 mil

56

* Building sector determined by majority occupation of a tenant type. Some buildings have different tenant types in occupation


GLA AND VACANCY RECONCILIATION

Properties (No.) Total GLA (m2) Vacant GLA (m2) Vacancy (%)

As at 28 February 2017 112 981,777 105,119 10.7%

Disposals (4) (14,785) (4,086)

Acquisitions - - -

Leases terminated - - 51,555

New letting of vacant space - - (42,433)

Adjustments – Commission House *

- 6,157-

Adjustments - 282 (106)

As at 31 August 2017 108 973,431 110,049 11.3%

57

* Commission House was previously moth-balled due to renovations, building now functional and occupied by DPW


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Documents

INTERIM RESULTS PRESENTATION...RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 AUGUST 2017 CORPORATE HIGHLIGHTS UP TO INTERIM RESULTS PRESENTATION 2017 6 46.40 cents per share Increased