Safari Integrated Annual Report 2021

Natural resources§ Environmental impact is carefully considered with newacquisitions, expansions and refurbishments§ Green building initiatives are considered and incorporatedwhere feasible§ Solar power systems at retail centres and adding orexpanding solar systems to optimal capacity where feasible§ Natural light and ventilation maximised inside buildings§ Recycling of waste material and professionalwaste sortingSocial and relationship resources§ Strong geographic concentration of assets in emerging sector§ Transformation manager appointed and BBBEE targets set§ Relationships and engagement with our communities areprioritised§ In an ideal position to enhance consumer experience throughthe development of holistic business nodes§ Safari’s balanced and combined service offerings serveFinancial resources§§§§§Capital growth and dividend income to shareholdersDisciplined cost managementTax contributions to authoritiesCredit rating strength and access to fundingCentres have economic impact offering businessand employment opportunitiescommunities well§ Retail centres are linked to public transport networks§ Health, safety and security measures are in place at all sites§ Involved in and initiating many social and philanthropicprojects within the communities residing around our centres§ Internship and learnership programmesACTIVITIESThe aim is to create value for allour stakeholders through selectiveincome-generating assets andby optimising these assets to fullpotential. Our activities include acombination of:§ Responsible delivery of buildings, products and activitiesresulting in reduced impact on the environment and onnatural resourcesAcquisitionAcquire new investmentpropertyDevelopmentInvest in vacant landor property withdevelopment potentialOptimisationGrow and unlock valuefrom existing assets§ Economic growth and employment opportunities§ Black economic empowerment and transformation§ Strong community cohesion and support in fostering§ Economic prosperity of organisations and communitiesand increased investor interest§ Strong cash flow and healthy gearing ratiorelationships, loyalty and trust§ Safari environment known for mentorship, learning anddevelopment of skillsSAFARI INVESTMENTS RSA LIMITED2021 INTEGRATED ANNUAL REPORTSafari IAR 2021 front P5.indd 3329/06/21 10:17 AM

STRATEGIC OVERVIEWOUR STRATEGYAT A GLANCETo achieve our vision and mission,we leverage our business modeland focus on growth, efficiencyand our brand.Strategic growth with a specialised focus .OUR VISIONTo become a leading retail-focused REITon the JSE through selective propertyinvestments while driving sustainable growthand materialising shareholder return abovethe market average.Why?Grow Safari’s asset value to unlock funding opportunities for developments andacquisitions. Through growth we can increase income distribution and stimulateshare liquidity.How?By working intentionally on unlocking value through yield-enhancing acquisitions,prudent asset management and pursuing development opportunities whilemaintaining a clear and focused investment strategy in line with our risk appetiteand company culture supported by our shareholders.ProgressOUR MISSIONBuilding a property portfolio which offers:§ To our investors/Investments that deliver long-term incomeand capital growth§ To our communities/Social and environmental sustainability§ To our tenants and their clients/Highly sought-after spaces§ To our employees/A secure and sustainable futureOUR VALUES§ Quality/Unlocking and delivering high-quality assets§ Innovation/Finding opportunities in the market throughcreative thinking§ Improvement/Making a difference for the better of our stakeholders§ Integrity/Acting honestly and ethically in all we do4§ Resolved to stay focused on quality assets in the South African retail sector andnarrowed our focus to convenience and small regional retail assets§ Defined and formulated our parameters and criteria for new assets in order todeliver solid and yield-accretive growth§ Currently, there are multiple development and acquisition opportunities in linewith our investment guidelinesFuture outlook§ Look for opportunities to expand existing assets where we have available bulkreserve for optimisation of assets§ Continue to explore potential ancillary assets such as the addition of fillingstations§ Stay focused and competitive in terms of Safari’s offering§ Continue to consider yield-accretive acquisitions and redevelopmentsProperty portfolioincreased byNet asset value pershare increased by5,7%8,5%to R3,46 billionDividend per share42centsSAFARI INVESTMENTS RSA LIMITED2021 INTEGRATED ANNUAL REPORTSafari IAR 2021 front P5.indd 429/06/21 10:17 AM

OUR CORPORATE STRATEGYGrowthBrandEfficiencyStrategically grow a specialised portfolio ofpremium retail assets through investing inconvenience or small regional shoppingcenters and potential ancillary or valueadding assets, either through newacquisitions or expansion of existing assets,within South AfricaMaintain a defensive income stream byfocusing on long-term sustainabilitythrough effective property management andenhancing the dominance of our assets inour target marketStrengthen the Safari brand throughfocusing on transformation, talentmanagement, investor relations andcontinued good corporate governanceEfficiency, sustainability, dominance .Inclusivity, transformation, relations and governance .Why?Why?Optimum efficiencies in our core business will strengthendistributable income streams and positively impact our shareliquidity and market cap and unlock faster growth.The Safari brand must stand out as an attractive investment in ahighly competitive environment. A positive brand reputation, wellknown in the market, will support our strategic goals.How?How?Through effective operational management of assets with a focus onefficiency at all levels as we aim for dominance of our assets in ourtarget market.By focusing on transformation, talent management, investor relationsand continued good corporate governance.ProgressProgress§ A focused leasing strategy followed aiming for positive reversion,tenant retention and the right tenant mix§ Maintained healthy tenant occupancy rates§ Maintained net operating expenses at an acceptable level§ Efficient management of capital structures and debt§ Solar installations provide significant electricity cost savings§ Newly constituted Board and independence strengthened§ Transformation targets set§ SETA-accredited learnership course introduced during 2021relating to general business administration, project managementand business management§ Detailed investor relations programme whereby regularinteraction and communication is planned for§ Continued supporting various social projects in our communitiesthat have a far-reaching impact on loyalty to the Safari brand§ Renewed focus on non-financial factors such as environmental,social and governance that are central in measuring the societalimpact of a businessFuture outlookFuture outlook§ Use tenant lease expiries as opportunities to improve tenant mix§ Continue to explore and extract sources of non-gross lettable area(“GLA”) revenue§ Retain dominance and appeal through a proactive approach torepairs and maintenance§ Unlock value-added services crucial to emerging markets§ Continue to pursue sustainable and worthy corporate socialinvestment (“CSI”) projects§ Refine marketing campaigns for the Safari brand to reach a widernetwork of businesses, professionals and potential futureinvestors§ Cultivate learning, mentorship and training§ During the COVID-19 crisis, embrace challenges as opportunitiesto strengthen the portfolio’s position and brand in the market, andbe innovative with solutions for the benefit of all stakeholdersTenant retention97,6% 84%occupancyR321millionproperty revenueFourinternship andlearnershipprogrammesNineactive Safari CSIinitiatives67%IndependentNon-Executive BoardrepresentationSAFARI INVESTMENTS RSA LIMITED2021 INTEGRATED ANNUAL REPORTSafari IAR 2021 front P5.indd 5529/06/21 10:17 AM

STRATEGIC OVERVIEWCHAIRPERSON’SREPORT“While the pandemic saw the larger regional and super-regional malls under pressure, the convenience retail nature of Safari’sassets showed resilience in unprecedented circumstances.”With the national lockdown commencing on26 March 2020, the year under review isone that has felt the full impact of theCOVID-19 pandemic. The impact of thepandemic has been terrible. For those whohave suffered loss, we extend our deepestsympathies.The Safari team has done an outstandingjob in ensuring the safety of all those whoselives Safari touches – our staff, our tenants,their customers and our service providers– and will continue to do so.COVID-19 has proven the resilience anddefensiveness of the Safari portfolio. Whilethe pandemic saw the larger regional andsuper-regional malls under pressure, theconvenience retail nature of Safari’s assetsshowed resilience in unprecedentedcircumstances. The focus on convenienceretail in the peri-urban areas in the largeeconomic hubs of South Africa remainsSafari’s core strategy.The year was one in which cash flowmanagement, liquidity and funding wereunder intense focus. Support was offeredin the form of rental relief and defermentsto those of our tenants who were impactedby the pandemic – this came at a costto the business of some R30 million– a necessary expense under thecircumstances. The lower interest rateenvironment provided some relief given thatonly approximately 50% of our borrowingswere hedged. The position will continue tobe monitored although the expectation isthat the interest rate environment willremain subdued for some time.The difficult conditions saw a decline inSafari’s earnings, however, a total dividend(interim and final) equivalent toapproximately 90% of distributable earningshas been proposed. While the total dividendfor the year is below that of the previousyear, the fact that Safari was able to paydividends is a notable achievement in anenvironment where many have either notpaid dividends or have done so at far lowerlevels than Safari. We are confident thatmore normalised dividends, assuming nomaterial further deterioration in theeconomy, will resume in the 2021/22 year.The year saw a complete change in theNon-executive Director component of theBoard. To those Non-executives whorelinquished their positions, Safari extendsits thanks for the time and effort devotedto its affairs. The new IndependentNon-executives, Dr Tumeka MatshobaRamuedzisi, Marius Muller and Dr PinePienaar provide a broad and diverse skillset that will serve the Company well inthe future.It is true that employees are anorganisation’s most valuable asset andthe implementation of an appropriateLong-term Incentive Plan will be tabled forapproval at a Special General Meeting tobe held on 30 June 2021. We encourageour shareholders to provide the necessarysupport for the plan.The outstanding matter with SouthernPalace also remains a key priority and wecan assure our shareholders that we areactively working towards a final resolutionwhich will be in the best interest of theCompany and its stakeholders.To my fellow Directors, members of theexecutive management team and all atSafari, I extend my appreciation for yourefforts in a tumultuous year. Safari hasproved its resilience and is well positionedto take advantage of opportunities either viaacquisitions or development of its existingassets. To our capital and service providers,our tenants and their customers and to ourshareholders, thank you too for yourcontinued support.GJ HeronChairperson23 June 20216SAFARI INVESTMENTS RSA LIMITED2021 INTEGRATED ANNUAL REPORTSafari IAR 2021 front P5.indd 629/06/21 10:17 AM

ANNUALPERFORMANCEREVIEW02SAFARI INVESTMENTS RSA LIMITED2021 INTEGRATED ANNUAL REPORTSafari IAR 2021 front P5.indd 7729/06/21 10:17 AM

ANNUAL PERFORMANCE REVIEWPROPERTYPORTFOLIOThe Safari portfolio primarily comprises of dominant well-located convenience retail centres, largely underpinned by nationallessees on long-term contractual leases.Immediate development opportunities8THE VICTORIAN REVAMPMNANDI FILLING STATIONLYNNWOOD DEVELOPMENTInvestment value:Approximately R13 millionRezoning in process:RetailCapex:Approximately R68 millionExpected opening:Q4 2022Planned:4 000m² convenience retailOpening:Q1 geville(cnr Phudufufu and Khoza Streets)(cnr Stormvoël and Maphalla Roads)(Maunde Street)Trading sinceNumber of shopsTotal rentable areaInvestment valueTrading densityNational tenantsAnchor tenantOccupancy levelsTrading sinceNumber of shopsTotal rentable areaInvestment valueTrading densityNational tenantsAnchor tenantsOccupancy levelsTrading sinceNumber of shopsTotal rentable areaInvestment valueTrading densityNational tenantsAnchor tenantOccupancy levels20069931 239m2R627 500 000R31 954/m2 per annum89%Shoprite100%200312134 470m2R889 000 000R38 235/m2 per annum89%Shoprite, SuperSpar99,76%2015308 717m2R148 400 000R27 301/m2 per annum79%Pick n Pay99,94%SAFARI INVESTMENTS RSA LIMITED2021 INTEGRATED ANNUAL REPORTSafari IAR 2021 front P5.indd 829/06/21 10:17 AM

SectorRetailTHE VICTORIANTHABONGLivingMedicalPLATZ AM MEERSebokengHeidelberg(Moshoeshoe Street)(cnr Voortrekker and Jordaan Streets)(cnr Albatros and Tsavorite Streets)Trading sinceNumber of shopsTotal rentable areaInvestment valueTrading densityNational tenantsAnchor tenantsTrading sinceNumber of shopsTotal rentable areaInvestment valueTrading densityNational tenantsAnchor tenantOccupancy levelsTrading sinceNumber of shopsTotal rentable areaInvestment valueTrading densityNational tenantsAnchor tenantOccupancy levelsOccupancy levels20079934 611m2R561 300 000*R38 347/m2 per annum86%Boxer, Pick n Pay,SuperSpar100%Swakopmund, Namibia19973811 777m2R188 700 000R57 573/m2 per annum98%Pick n Pay89,78%20167221 228m2R270 862 400*R23 016/m2 per annum77%Checkers90,63%* Includes additional bulk.* Includes additional bulk.SOWETO DAY HOSPITALNKOMO VILLAGESowetoAtteridgeville(R558, Protea Glen)(49 Tlou Street)Trading sinceNumber of shopsTotal rentable areaInvestment valueNational tenantAnchor tenantOccupancy levelOffice2016201 379m2R35 000 000100%Advanced Health100%Trading sinceNumber of shopsTotal rentable areaInvestment valueTrading densityNational tenantsAnchor tenantsOccupancy levelsTHORNHILLPolokwane(cnr Veldspaat Street and Munnik Avenue)20186019 312m2R357 700 000*R39 180/m2 per annum85%Boxer, Pick n Pay95,19%Trading sinceNumber of shopsTotal rentable areaInvestment valueTrading densityNational tenantsAnchor tenantsOccupancy levels20093612 390m2R243 300 000R37 941/m2 per annum93%SuperSpar, FoodLover’s Market99,80%* Includes additional bulk.SAFARI INVESTMENTS RSA LIMITED2021 INTEGRATED ANNUAL REPORTSafari IAR 2021 front P5.indd 9929/06/21 10:17 AM

ANNUAL PERFORMANCE REVIEW2021 PERFORMANCEOVERVIEWGeographical spreadTotal tenant mixRevenueGLASwakopmund – eng – South AfricaTenants of national listed companies and other nationalsTenants of national franchises and medium to large professional firmsLocal tradersLimpopo – South AfricaContracted versus uncontractedSectoral 99%0%0%1%1%UncontractedRetailHealthcareLease expiry profile of the 2024/256%21%2025 25%0%105%10%15%20%25%RevenueRentable area30%SAFARI INVESTMENTS RSA LIMITED2021 INTEGRATED ANNUAL REPORTSafari IAR 2021 front P5.indd 1029/06/21 10:17 AM

Vacancy profile by sector by rentable rage rental for portfolio by rentable areaOffice159 R/m2Medical203 R/m2Retail149 R/m2Living82 R/m2Weightedaveragerental149 R/m20 R/m250 R/m2100 R/m2150 R/m2200 R/m2250 R/m2Weighted average gross rent per m² g the impact of temporary COVID-19 relief.Portfolio valueProperty incomeThe Victorian5%NkomoProperty 10%0%The atz am Meer8%Atlyn16%Platz am 11%Mnandi4%Soweto1%Mnandi2%Soweto0%8%SAFARI INVESTMENTS RSA LIMITED2021 INTEGRATED ANNUAL REPORTSafari IAR 2021 front P5.indd 111129/06/21 10:17 AM

ANNUAL PERFORMANCE REVIEWFIVE-YEARFINANCIAL REVIEWProperty revenue2021R2020R2019R2018R2017R320 898 551320 786 920275 978 654240 998 870203 426 9790%16%15%18%20%116 993 085114 830 672104 321 82870 890 78061 471 1582%10%47%15%27%Property revenue year-on-yearOperating expensesOperating expenses year-on-year27%24%26%25%30%3 245 809 5963 058 198 0093 009 003 8452 638 537 7182 421 549 684Property expenses as % of property revenueInvestment property6%2%14%9%18%3 554 149 0003 372 719 0003 320 511 0002 939 779 0002 650 701 000Investment property year-on-yearTotal asset value5%2%13%11%19%106 000 000122 684 400153 438 300169 648 600175 003 438Total asset value year-on-yearInventory1Inventory ,6%2%2%175 123175 135174 583134 8230,3%29%Total rentable area (m2)(0,01%)Rentable area year-on-year1Note that inventory units are sold off over time thus value should be decreasing.Property portfolio value – R3,459 billion3 5003 0002 5002 0001 5001 920202021Denlyn289 823 223375 500 000431 500 000511 700 000530 400 000581 700 000693 800 000788 800 000792 800 000798 900 000889 000 000Thabong164 100 000176 000 000237 900 000265 700 000368 000 000382 100 000488 900 000497 600 000534 500 000559 400 000561 300 000Atlyn260 000 000274 900 000307 400 000373 100 000395 100 000428 500 000484 400 000527 200 000538 300 000577 600 000627 500 00032 400 00028 330 00044 500 00075 921 98286 248 436188 479 821331 600 000333 600 000357 700 000NkomoMnandi13 100 0009 150 000117 400 00092 000 000103 500 000107 300 000136 600 000136 900 000148 400 00067 121 63492 804 651156 900 000412 571 973547 816 479500 790 100436 798 800400 276 000376 862 400135 000 000142 500 000143 500 000154 600 000166 200 000172 000 000161 900 000188 700 000Soweto28 400 00033 900 00035 506 19039 400 00041 000 00035 000 000Lynnwood40 795 24739 200 00039 400 00041 700 00036 500 00032 000 000205 100 000226 000 000243 300 000Platz am Meer16 166 139The VictorianThornhill1243 000 000SAFARI INVESTMENTS RSA LIMITED2021 INTEGRATED ANNUAL REPORTSafari IAR 2021 front P5.indd 1229/06/21 10:17 AM

MONITORING OURPERFORMANCEOur progress is measured against our strategic objectives using financial and non-financial indicators.OccupancyWeighted average gross rent per m² %2020R149202197,6%2021R14911Tenant retentionIncluding the impact of temporary COVID-19 relief.Reversion 202033%202136%202138%Basic headline earning per shareDistribution201847 cents2020interim24 cents201951 cents2020final22 cents202035 cents2021interim17 cents202

At Safari, we work to unlock value through prudent asset management, yield-enhancing acquisitions and sensible development or redevelopment opportunities while maintaining a clear and focused investment strategy in line with our risk appetite and company culture. Safari Investments RSA Limited is a property investment company