1. Deutsche Presentation
Retail Market Dynamics February 2015

2. Consumer Position High Income vs. Low & Middle Income markets
Relative outperformance but not immune to slowing economy
Credit position is the major differentiator
Risks:
Aspirational shopper has limited resources
Stock market performance
Possible higher personal taxes

3. Annual Trading Densities
Y / Y % Growth
Affluent
BROOKLYN MALL
8.8%
LA LUCIA MALL
5.6%
WALMER PARK
9.0%
CONSTANTIA VILLAGE
6.4%
Solid-Middle
WATERFALL MALL
-1.0%
KOLONNADE
5.9%
WOODMEAD RETAIL PARK
4.3%
RIVER SQUARE
3.8%
Lower-Middle
NORTHGATE
-0.7%
LONGBEACH MALL
8.2%
CBD / Commuter
LAKESIDE MALL
3.0%
ALBERTON CITY
-0.4%
GOLDEN ACRE
10.3%
CITY VIEW
2.1%
CITY MALL
-8.7%
HATFIELD PLAZA
2.8%

4. Annual Trading Densities
Y / Y % Growth
Affluent
BROOKLYN MALL
8.8%
LA LUCIA MALL
5.6%
WALMER PARK
9.0%
CONSTANTIA VILLAGE
6.4%
Solid-Middle
WATERFALL MALL
-1.0%
KOLONNADE
5.9%
WOODMEAD RETAIL PARK
4.3%
RIVER SQUARE
3.8%
Lower-Middle
NORTHGATE
-0.7%
LONGBEACH MALL
8.2%
CBD / Commuter
LAKESIDE MALL
3.0%
ALBERTON CITY
-0.4%
GOLDEN ACRE
10.3%
CITY VIEW
2.1%
CITY MALL
-8.7%
HATFIELD PLAZA
2.8%

5. Annual Trading Densities
Y / Y % Growth
Affluent
BROOKLYN MALL
8.8%
LA LUCIA MALL
5.6%
WALMER PARK
9.0%
CONSTANTIA VILLAGE
6.4%
Solid-Middle
WATERFALL MALL
-1.0%
KOLONNADE
5.9%
WOODMEAD RETAIL PARK
4.3%
RIVER SQUARE
3.8%
Lower-Middle
NORTHGATE
-0.7%
LONGBEACH MALL
8.2%
CBD / Commuter
LAKESIDE MALL
3.0%
ALBERTON CITY
-0.4%
GOLDEN ACRE
10.3%
CITY VIEW
2.1%
CITY MALL
-8.7%
HATFIELD PLAZA
2.8%

6. Annual Trading Densities
Y / Y % Growth
Affluent
BROOKLYN MALL
8.8%
LA LUCIA MALL
5.6%
WALMER PARK
9.0%
CONSTANTIA VILLAGE
6.4%
Solid-Middle
WATERFALL MALL
-1.0%
KOLONNADE
5.9%
WOODMEAD RETAIL PARK
4.3%
RIVER SQUARE
3.8%
Lower-Middle
NORTHGATE
-0.7%
LONGBEACH MALL
8.2%
CBD / Commuter
LAKESIDE MALL
3.0%
ALBERTON CITY
-0.4%
GOLDEN ACRE
10.3%
CITY VIEW
2.1%
CITY MALL
-8.7%
HATFIELD PLAZA
2.8%

7. Annual Trading Densities
Y / Y % Growth
Affluent
BROOKLYN MALL
8.8%
LA LUCIA MALL
5.6%
WALMER PARK
9.0%
CONSTANTIA VILLAGE
6.4%
Solid-Middle
WATERFALL MALL
-1.0%
KOLONNADE
5.9%
WOODMEAD RETAIL PARK
4.3%
RIVER SQUARE
3.8%
Lower-Middle
NORTHGATE
-0.7%
LONGBEACH MALL
8.2%
CBD / Commuter
LAKESIDE MALL
3.0%
ALBERTON CITY
-0.4%
GOLDEN ACRE
10.3%
CITY VIEW
2.1%
CITY MALL
-8.7%
HATFIELD PLAZA
2.8%

8. Annual Trading Densities
Y / Y % Growth
Affluent
BROOKLYN MALL
8.8%
LA LUCIA MALL
5.6%
WALMER PARK
9.0%
CONSTANTIA VILLAGE
6.4%
Solid-Middle
WATERFALL MALL
-1.0%
KOLONNADE
5.9%
WOODMEAD RETAIL PARK
4.3%
RIVER SQUARE
3.8%
Lower-Middle
NORTHGATE
-0.7%
LONGBEACH MALL
8.2%
CBD / Commuter
LAKESIDE MALL
3.0%
ALBERTON CITY
-0.4%
GOLDEN ACRE
10.3%
CITY VIEW
2.1%
CITY MALL
-8.7%
HATFIELD PLAZA
2.8%

9. Annual Trading Densities
Y / Y % Growth
Affluent
BROOKLYN MALL
8.8%
LA LUCIA MALL
5.6%
WALMER PARK
9.0%
CONSTANTIA VILLAGE
6.4%
Solid-Middle
WATERFALL MALL
-1.0%
KOLONNADE
5.9%
WOODMEAD RETAIL PARK
4.3%
RIVER SQUARE
3.8%
Lower-Middle
NORTHGATE
-0.7%
LONGBEACH MALL
8.2%
CBD / Commuter
LAKESIDE MALL
3.0%
ALBERTON CITY
-0.4%
GOLDEN ACRE
10.3%
CITY VIEW
2.1%
CITY MALL
-8.7%
HATFIELD PLAZA
2.8%

10. December Trading Densities
Dec-13 vs Dec-14 (% Growth)
Affluent
BROOKLYN MALL
9.9%
LA LUCIA MALL
5.2%
WALMER PARK
12.6%
CONSTANTIA VILLAGE
8.2%
Solid-Middle
WATERFALL MALL
1.1%
KOLONNADE
5.9%
WOODMEAD RETAIL PARK
5.5%
RIVER SQUARE
-0.8%
Lower-Middle
NORTHGATE
3.6%
LONGBEACH MALL
11.2%
CBD / Commuter
LAKESIDE MALL
3.0%
ALBERTON CITY
-0.4%
GOLDEN ACRE
10.3%
CITY VIEW
0.1%
CITY MALL
-19.0%
HATFIELD PLAZA
9.2%

11. December Trading Densities
Dec-13 vs Dec-14 (% Growth)
Affluent
BROOKLYN MALL
9.9%
LA LUCIA MALL
5.2%
WALMER PARK
12.6%
CONSTANTIA VILLAGE
8.2%
Solid-Middle
WATERFALL MALL
1.1%
KOLONNADE
5.9%
WOODMEAD RETAIL PARK
5.5%
RIVER SQUARE
-0.8%
Lower-Middle
NORTHGATE
3.6%
LONGBEACH MALL
11.2%
CBD / Commuter
LAKESIDE MALL
3.0%
ALBERTON CITY
-0.4%
GOLDEN ACRE
10.3%
CITY VIEW
0.1%
CITY MALL
-19.0%
HATFIELD PLAZA
9.2%

12. Rental Affordability TOP 10 CENTRES VALUE (R mil) GLA VALUE / M2
COST OF OCCUPANCY
AVE. TRADING DENSITY
(12 Months)
BROOKLYN MALL (75%)
1,953
56,069
34,839
8.8%
2,819
WATERFALL MALL
1,287
49,228
26,142
7.4%
2,649
LAKESIDE MALL
1,234
67,515
18,270
7.2%
2,056
LA LUCIA MALL
1,066
36,379
29,295
2,921
KOLONNADE (50%)
958
37,893
25,292
6.3%
2,828
WALMER PARK
901
43,202
20,858
6.5%
2,530
ALBERTON CITY
877
47,615
18,414
7.3%
2,135
CONSTANTIA VILLAGE
813
20,370
39,926
4.8%
6,007
NORTHGATE (50%)
756
45,329
16,669
10.4%
1,664
WOODMEAD RETAIL PARK
732
54,891
13,328
4.9%
2,876

13. Rental Affordability TOP 10 CENTRES VALUE (R mil) GLA VALUE / M2
COST OF OCCUPANCY
AVE. TRADING DENSITY
(12 Months)
BROOKLYN MALL (75%)
1,953
56,069
34,839
8.8%
2,819
WATERFALL MALL
1,287
49,228
26,142
7.4%
2,649
LAKESIDE MALL
1,234
67,515
18,270
7.2%
2,056
LA LUCIA MALL
1,066
36,379
29,295
2,921
KOLONNADE (50%)
958
37,893
25,292
6.3%
2,828
WALMER PARK
901
43,202
20,858
6.5%
2,530
ALBERTON CITY
877
47,615
18,414
7.3%
2,135
CONSTANTIA VILLAGE
813
20,370
39,926
4.8%
6,007
NORTHGATE (50%)
756
45,329
16,669
10.4%
1,664
WOODMEAD RETAIL PARK
732
54,891
13,328
4.9%
2,876

14. Rental Affordability TOP 10 CENTRES VALUE (R mil) GLA VALUE / M2
COST OF OCCUPANCY
AVE. TRADING DENSITY
(12 Months)
BROOKLYN MALL (75%)
1,953
56,069
34,839
8.8%
2,819
WATERFALL MALL
1,287
49,228
26,142
7.4%
2,649
LAKESIDE MALL
1,234
67,515
18,270
7.2%
2,056
LA LUCIA MALL
1,066
36,379
29,295
2,921
KOLONNADE (50%)
958
37,893
25,292
6.3%
2,828
WALMER PARK
901
43,202
20,858
6.5%
2,530
ALBERTON CITY
877
47,615
18,414
7.3%
2,135
CONSTANTIA VILLAGE
813
20,370
39,926
4.8%
6,007
NORTHGATE (50%)
756
45,329
16,669
10.4%
1,664
WOODMEAD RETAIL PARK
732
54,891
13,328
4.9%
2,876

15. Listed Retailers Listed Retailers GLA Ave. Trading Density (12 Months)
Y/Y Growth
CHECKERS
23,229
2,902
PICK 'N PAY
73,420
2,721
CLICKS
13,781
3,259
GAME
35,886
1,941
MR PRICE HOME
10,809
2,105
MR PRICE APPAREL
13,717
2,782
FOSCHINI
9,128
1,937
TRUWORTHS
14,293
2,505
WOOLWORTHS
59,066
3,019

16. Retail Space: Supply & Demand Dynamics
: Strong GDP growth of ≥ 3% : 2002 – 2008
Relative high employment growth :
Social Grant roll-out : 2004 – 2009
Consumer Credit Growth: Debt/Income Ratio 55% in ’03 to 83% in ’08
2010 – 2012: Recovery driven by unsecured lending

17. National Shopping Centre GLA Growth
Shopping centres ≥ m² expansion rate:
1993 – 2012 : 7.8% p.a – 2009: 12.4% p.a.
2009 – 2012: 9% p.a onwards: +/- 6%
Supply exceeding demand, leading to declining trading densities, higher occupancy costs and margin compression.
Landlords experience higher vacancies, lower turnover rental, limited rental growth
USA Example
USA Mall Health Index (Vacancy ≤ 10%): Deteriorated 94% (2006) to 80% (2014)
USA Malls with 10% - 40% vacancy: 5% (2006) to 15% (2014)
Shopping centres with combined GLA of 3mil m² are 40%+ vacant

18. Listed Retailer: Trading area growth - Relative performance
MR PRICE: Consolidation: (Mr Price Home & Sport)
Increasing GLA at performing stores
WOOLWORTHS: Enlarging high trading density stores
Rental model supporting GLA growth
FOSCHINI: New stores underperforming existing
Trading density growth decelerating
TRUWORTHS: Aggressive growth Negative trading density growth

21. New Centre Performance
Matlosana Mall
Flamwood Mall
Waterfall Corner
Club Centre
Cosmo Centre
Forest Hill
Mall of Rosebank Redevelopment
Newtown

22. Impact of new competition
Klerksdorp – City Mall impacted by Flamwood & Matlosana
Greater Matlosana – 400k population; growth 2001 to 2011 : 1.04% (RSA 1.44%)
Northwest GDP/Capita 69% of Gauteng
Combined GLA of Flamwood, Tower Mall (Jouberton 2013) and Matlosana – m²
City Mall Trading Density y-o-y change:
2013 vs 2012 – down 4%
2014 vs 2013 – down 8.2% to R1922/m²
Dec 2014 vs Dec 2013 – down 19% to R2 776/m² (R14mil loss in sales)
≥ 40% decline: Woolworths, C.N.A., Musica, Red Square, Sterns, Verimark and most cellular shops
20% - 40% decline: All Foschini brands, Legit, The Hub, Wimpy, Sheet Street
Positive y-o-y growth: Ackermans, PEP, Webbers, PEP Cel, Signature Cosmetics, Side Step, Spitz, Skipper Bar

23. Impact of new competition
Brooklyn Mall impacted by 1500m² Woolworths stand-alone at Club Centre
Woolworths food trading density declined by average 5.1% p.m. y-o-y, reducing overall Woolworths growth to 2.7% in December up 6.8%
Woodmead impacted by Woolworths Food store at Waterfall Corner
2012/2013 Y-o-Y trading density growth – 15.7%
2014/2013 Y-o-Y trading density growth – 6.7%
December 2014 Y-o-Y growth – 9.6%
2014 Average trading density: R5000/m²

24. Eskom Load Shedding Shopper behaviour: At home & at shopping centres
Availability of back-up power: Anchors, Nationals & Line shops
Impact on centre operations: Security, parking, equipment
Impact on foot counts & trading
There is not a visible “loss” of visitors to the mall due to load shedding activities.
The rate of new arrivals drop on average with 50% during load shedding hours, but quickly resumes after power is restored.
The week day arrival pattern shifts to later during the day, but resumes the normal arrival patterns until close of business.
Average dwell times for the specific days in question shows a 200% increase across new visitors and recurring customers

25. Traditional Saturday Pattern
22/11/14
12 months general pattern for normal Saturdays
Power Outages on Saturdays
Saturday traffic growth peaks at 11h00 and 19h00 clock
With load-shedding the traffic drops in average with 50 % but resumes in growth after load-shedding stopped.
There is no substantial decrease in overall volumes. However, average time in mall spend however doubles.

26. 12 months normal arrival pattern for Sunday
Arrival pattern on a Sunday with Load Shedding
Normal Sunday traffic growth peaks at 11h00

27. Eskom Load Shedding Growthpoint position Diesel generators Solar
Inverters & UPS
Energy saving initiatives
Change in trading hours

28. International Retailers
Rationale for market entry : International foot print, RSA retailer margins.
Luxury International Brands
Brand recognition & Trading Performance
Market size
Presence & interest: LV, Gucci, Dior, Burberry, D&G, Prada, Fendi
Franchised International Brands
Edcon – Topshop, River Island, Tom Taylor, TM Lewin, Lucky Brand, Lipsy, Calvin Klein, Accessorize
Busby – Topshop, Guess, Mango, Tumi, Karen Millen
Surtee – Hugo Boss, Dunn Hill, Hacket, Armani
Other – GAP, Banana Republic, Pringle, Ben Sherman, Tiger of Sweden, Hamleys
H&M

29. Cotton On Group Market Entry Strategy Pricing
Performance in terms of market penetration, market share and trading density
Cotton On
Factorie
Typo
CO Kids
Impact on RSA retailers
Risks

30. Inditex / ZARA Market entry strategy Brand Awareness Store Performance
Sandton, V&A, KZN, PE, Cresta, Tyger Valley
Store roll-out programme
Impact on RSA retailers
Challenges
Currency pressure, product sizing, market knowledge, shrinkage
Zara Home

31. Questions