BROLL PROPERTY GROUP

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B r o l l

P r o p e r t y

G r o u p

Broll has a formidable reputation serving some of Africa’s largest listed property portfolios

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B r o l l

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S o m e J u s t See W i n d o ws ,

Founded in 1975, Broll Property Group a leading commercial property service company in Africa, with offices in major cities and towns in South Africa as well as operations in Ghana, Indian Ocean Islands, Kenya, Malawi, Namibia, Nigeria and Rwanda and provides services in other African countries Writer Emily Jarvis Project Manager Nick Norris

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roll offers services which include asset management and consulting, corporate real estate services, facilities management, industrial, investment and office broking, property and project management, retail leasing and projects, research, shopping centre management, valuation and advisory services, own patented Broll-Online property-management software solution and a property search function with a vast database of properties across South Africa.

For 10 years now, Broll has been affiliated with CBRE, a leading

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Investment Trends Heidi Rix, Broll Property Group, Director for Investor Services Talk me through some of the property asset and management and investment trends you have witnessed?

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global commercial real estate and investment firm and thanks to this association, the company offer unrivalled local expertise and global market knowledge with the sole purpose of maximising the potential of your property. Broll’s country CEO’s and Directors tell us more about the property market trends, company projects and their facilities management systems.

In South Africa, we have seen a lot consolidation in the listed property sector with the larger listed companies absorbing the smaller ones. Further to this, most of these listed properties have in-house property management and for these funds we can offer strategic and operational asset management services either on a specific property or on a portfolio basis.

Broll manages at total of 291 malls 9 retail centres in West Africa, 275 in the SADC region and 7 in East Africa.

The company manages the largest malls in seven Sub-Saharan African countries.Asset management is the key to success and this is done by way of aligning the interests of the property investor, the tenants and the manager utilising a blended recipe of skill, experience, knowledge, relationships and proactive operational efficiency including establishing proper checks and balances in the property operation process.

The right holistic management solution is important in unlocking the property investment value and

property managers need to have business intelligence skills in order to best manage the property and investment asset. In other words, managers need to be aware and keep abreast of what is happening in the economy, the property industry and its respective sectors.

Asset management include aspects such as market intelligence and research as well as property sector specifics, projections, appraisals and capital projects, strategic leasing and renewals planning, value add initiatives and income risk mitigation all of which address the strategic long term planning and investment growth of the asset under management.

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B r o l l

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Broll in

East Africa, I n d i a n Oc e a n a n d S AD C Group CEO, Malcolm Horne, Broll Property Group, East Africa, Indian Ocean and SADC Tell me about the real estate markets in East Africa, Indian Ocean and the SADC region

Closer to SA, Namibia is often described as Africa’s optimist and with good reason. Not only does it enjoy one of the continent’s most pleasant, peaceful and politically Although Nairobi is still a preferred location for many global organisations stable environments, but also an infrastructure to rival many entering the market, many are developed countries. investing heavily into other areas While the rest of the world is in the Indian Ocean and the SADC still recovering from the impact of region. Major real estate investors the US housing loan crisis, rising in Malawi include the government, inflation and financial crisis in Europe, institutional investors, the Asian Namibia’s real estate sector continues community, foreign and local real to grow on all fronts. In recent estate companies. years Namibia has become a new Recently, Malawi Housing international property hot spot with Corporation, an arm of government, new developments and ambitious partnered with a Chinese company construction projects springing up investing in real estate and lately, we have noted that the Asian community in most major hubs as well as areas which provide adequate disposable has teamed up and invests in all real income to warrant development. estate sectors.

Zambia is another investment When one considers the economic and political factors and the eagerness gem in the region, what’s more, the of government to incentivise potential country has signed double taxation agreements with a number of investors, the real estate sector will European, North America, African and grow substantially in the next five to 10 years and with this growth, comes Asian countries, as such, investors from these countries are not liable to tax vast opportunities for investors. For in more than one country or territory. example, with rapid urbanisation, What’s more, the government offers Malawians are now adapting the a well-balanced package of fiscal Western culture, wanting modern incentives in priority areas as well as homes, sophisticated retail spaces additional negotiated benefits towards as well as offices and industrial strategic investments. properties to cater to their needs.

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Where has the Group seen the most success in the last year?

Across the continent, retail is becoming more formalised, with new retail developments coming onto the market in the next 24 to 36 months. In East Africa, Kenya for example, the new malls being built have GLAs (Gross Lettable Areas) of over 30,000m2 while in West Africa, they are less than 30,000m2.

South Africa which has a more sophisticated real estate market continues to see retail growth and we are starting to see new retail developments in second-tier cities and rural areas. With new office developments, the trend is green buildings and this is mostly seen in Sandton Johannesburg where a number of listed property companies build specifically for high profile tenants who are becoming particular about what they want from a building – efficiency being top of mind as energy saving and cutting costs is what many tenants are looking to achieve from the buildings they occupy. We are experiencing an occupier market that is being influenced by international best practice and rapidly developing formal occupier centric service offerings such as CRES to Facilities Management.

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Major Projects Across East Africa, SADC Region and West Africa

Over 1,009,748m2 of retail projects in various stages of

completion within the next 24 months

An additional 500,000m2 of retail projects under investigation A total of 53 retail across these regions

projects

Geographical spread of projects:

28% East Africa 44% SADC 28% West Africa

In Kenya, Broll has been awarded management and is involved with leasing of Two Rivers in Nairobi, the largest mixed-use development under construction in East Africa

(68,000m2 of retail and 18,000m2 residential).

The SADC region has 19 projects with retail interest mainly

coming from master franchise, Middle East retailers in Angola (limited interest in SA), global luxury brands and strong SA local retail expansion into the region.

There are 23 projects in West Africa. The market here is

seeing a lot of master franchise as well as emerging Middle East retail interest, European brands and a strengthening of the local retail market.

In South Africa, Broll has been

awarded the exclusive leasing mandate of the Mall of Africa in Johannesburg,

the largest single retail first phase ever constructed in Sub-Saharan Africa as well as the recently opened Newtown Junction in Johannesburg.

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Research & Marketing Elaine Wilson, Divisional Director Research and Marketing at the Broll Property Group What makes Broll Property Group stand out in the real estate crowd of companies?

We are a multi-disciplinary real estate firm offering services including asset management and consulting, corporate real estate services, facilities management, industrial, investment and office broking, property and project management, retail leasing and projects, research, shopping centre management, valuation and advisory services.

We have been affiliated with CBRE, a global leading commercial real estate firm for 10 years now and that enables us to use our international expertise combined with local knowledge to maximum. We pride ourselves in having intimate knowledge of the markets in which we operate and have presence in. This coupled with the fact that we have African talent at company and country level. Some of our staff members have local and international real estate knowledge in the markets and we continue to educate and skill our people on various aspects of real estate to keep up with the changing dynamics in various markets.

Talk to us about your market research and how it plays a pivotal role in where you choose to invest

Research is the cornerstone of our business, and with non-transparency and lack of data in some countries, it is essential to have feet on the ground and this is perhaps an area where we differentiate ourselves from the market. We have operations in over 15 countries in Sub-Saharan Africa and this is useful as we have a team of dedicated researchers who have in-depth knowledge of the countries

we operate in and have presence in. The research aspect also allows for further expansion into the continent, importantly, our brokers, asset managers and clients tap into this research which then allows them to make informed decisions.

We approach research differently, instead of just looking at rental levels or what lease terms are for example, we focus on factors such as legislation issues in different markets and how these factors impact on the property investment. In essence, our research is tailored such that an investor learns from it, use a guide or reference and assist them in making decisions about their existing and potential property investments.

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Broll in

West Africa Leonard Michau, Director and Head of Operations West Africa Which countries are investors eyeing in the West Africa region?

As Broll celebrates ten years in Nigeria, business here has taken centre stage, closely followed by Ghana. Ivory Coast and Cameroon have tended to lag with their smaller GDP and the overhang of the 2010/2011 Ivory Coast political instability. However we are seeing a growing interest from private equity developers in the Ivory Coast albeit in the early stages. Nigeria received a boost with the rerating of their GDP, and with the current state of the Ghana economy many investors have focused their attention on Nigeria where they see greater opportunities and higher returns.

Conversely, Ghana’s economy is currently under pressure and we have seen a definite slowdown in deal flow on the transactional side of our business, mostly in leasing, tenant representation and research projects.

In some cases new investors have taken a cautious approach of wait and see, whilst many existing investors have taken a view that property is a long term investment and that the underlying economic fundamentals remain reasonably sound and will improve over the long term.

The proposed IMF financial backing will restore confidence; however, this will come with onerous conditions, not welcomed by a large segment of the population.

Each country has its own unique challenges and characteristics for example, in the case of Ghana vs Nigeria, the dynamics of doing business in each country is very different despite geographically being close to each other. Therefore it is important that investors take cognisance of this and do their in country homework.

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How does Broll intend on growing business?

It is our intention to open offices in Ivory Coast and Cameroon on the back of client mandates recently secured and demand for professional property services. We see huge growth potential in the corporate real estate and tenant representation space while facility management has gained significant momentum on the back of international companies wanting to outsource this service. Retail leasing and mall management have been a core part of our business during the initial years and this continues to grow on the back of the surge in new retail developments and positive demographics.

We have been operating in Ghana and Nigeria for 9 and 10 years respectively and are very fortunate to have experienced our most successful trading year to date. We have seen growth across all our operational divisions with buildings under management in West Africa now exceeding $1 billion.

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Facilities Management Rowland Gurnell, COO Facilities Management Talk us through Broll Facilities Management and what this entails as well as your footprints in Africa?

Over the years and serving some of South Africa’s largest listed property portfolios, Broll has earned a formidable reputation for delivering quality, effectiveness and value. The ability to cross-reference information from an enormous database compiled from years of experience and exacting market research enables us to provide unique, cost-effective solutions for our clients. Focused teamwork and specialised skills ensure that you get the optimum service to match specific goals.

What has been the two major trends in facilities management you have seen across the continent and how have these impacted or will impact on the real estate sector?

Africa is a growth area for many global companies with presence on the continent. Many of these companies want the same office accommodation and services they would get in Europe or America and it is here that we can provide this through the training and employment of the local community.

Another trend we have noticed is that in many countries, these global companies want to have policies, procedures and Service Level Agreements introduced and we are in a position to assist with this and introduce our Computerised Maintenance Management Systems (CMMS) across Africa.

What makes Broll Facilities Management unique?

We have vast experience across all sectors of the Facilities Management sector and expertise within hard and soft services. We also have the 24/7 Call centre which runs on our highly sophisticated CMMS Software. Broll FM has a large footprint across the African continent and is well placed to look after the facilities of global and local companies in Africa.

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B r o l l

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C o r p o r at e R e a l

Es tat e S e r v i c e s ( C RE S ) Ken Gerber, Director and Head of Occupier Services Talk us through CRES in SA and in Africa. What trends do you see emerging in this sector?

CRES shifts the focus of real estate to the demand side of the equation, to property’s most fundamental functional role which is to support and enhance the operations of the businesses who pay to use it. We look at the role that corporate real estate can play not only as a facilitator to business and economy, but also in providing a competitive advantage to individual companies.

Understanding what occupiers need from their real estate in Africa is founded on the two underlying cornerstones required of any portfolio, i.e. that it is fit for purpose and provides value for money. Particularly within the rest of Africa, supply is evolving to meet those needs, and real estate is truly becoming a creator of change and is in fact changing the face of entire markets and cities.

Why should investors and tenants choose Broll CRES? How are you perceived in the market?

Broll’s Corporate Real Estate Service is unique in the South African market as a purely tenant focused service. Our successful track record of delivery of real estate services for some of our most significant clients - including leading financial service providers and other global companies - and we have delivered benefits to our clients of: R1.7 billion savings in the past 12 months alone 52,000 invoices totalling R1.3 billion processed to date 7,200 payments processed per month Average return on client investment of 1500% Broll’s platform is based on well-proven processes and technologies using global best practice.

Originating from our associated company CBRE,

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these have been tailored to the South African market. Our clients are therefore able to benefit from leading edge services confident in the experience that Broll brings to allow them to seize opportunities to unlock inherent value within their portfolios and generate sustainable financial benefits in line with their objectives.

Broll has proven experience in crafting, implementing and managing flexible strategies to successfully optimise corporate real estate portfolios.

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The Future of Broll Group CEO, Malcolm Horne, Concludes...

Where do you see Broll’s business going in future years?

Ultimately we would like to see Broll being compared on an international stage with the best in the world.

On 15th January 2015, Broll Property Group turns 40, a major milestone in the life of the company. Our staff compliment has grown to over 1,329 and counting.

We have plans for further expansion plans as we believe Africa is the future, having said that, it will take time to unlock opportunities on the African continent. Knowledge of the markets, patience and local partners are key in doing business in Africa.

Our focussed service lines that operate in East, South and West Africa will provide a platform for future growth and momentum driven by client needs and expansion plans. We have spent the last decade building our platform and wish to stand out of the pre-eminent professional property services company across Sub-Saharan Africa. Our love and passion for the development of the continent is part of what drives our desire to promote Africa to the world. We hope the future will promote our business on the international stage.

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Noteworthy C o m pa n y Aw a r d s Broll Property Group won in six different categories and achieved several further nominations in the Euromoney Real Estate Survey Awards 2014: Real Estate Advisors and Consultants – Overall 1st place in Africa

Real Estate Agency/Letting – 1st place in Africa

Real Estate Valuation

– 1st place in Africa

Real Estate Research Services – 1st place in Africa

Broll South Africa and Broll Nigeria were ranked number 1 overall in the Real Estate Advisors and Consultants category in their respective countries

Broll Nigeria scooped two more awards in the Real Estate UNITE 2014 Awards in October 2014 With Ikeja City Mall (a Broll Nigeria managed retail centre) winning the Best Commercial Property Award and Broll Nigeria winning the Best Real Estate Support Service of the Year.

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E n q uiries Tel (UK): +44 (0) 1603 559 151

Broll Property Group

Tel (SA): +27 (0) 21 527 0053

27 Fricker Road

ben.weaver@outlookpublishing.com

Illovo

SUBSCRIPTIONS

Tel: +27 11 441 4000

Tel (UK): +44 (0) 1603 559 152 emily.jarvis@outlookpublishing.com

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Johannesburg, 2196

Fax: 27 11 441 4452 Email: info@broll.com

www.broll.com