15 February 2005

Investec Property Group secured leases valued at over R1,27 billion during 2004, representing nearly double the value of leases it concluded during 2003 (R746 million).

Of these, R490 million were over commercial space, R442 million for retail premises and a competitive R341 million worth of leases were secured for industrial space. Together the deals represent over 925,000m2 nationwide.

“On a national level, strong economic fundamentals, and in particular, the strong performance of the retail sector has resulted in a substantial knock-on effect. This has seen a positive impact on commercial property, and specifically the industrial sector, which directly and indirectly services the retail sector and ultimately the consumer,” said Steve Grupel, Head of Leasing Division, Investec Property Group.

Notably renewals contributed substantially to Investec Property Group’s positive leasing results, with some R500 million worth of deals representing retained tenants.

Gauteng saw the lion’s share of leasing with deals worth R708 million secured over 615 000 m2 of commercial, industrial and retail space.

“Commercial leasing in this province continues to strengthen and the take up of stock has increased substantially resulting in shortages in A grade space in select areas,” explained Grupel. Investec Property Group secured leases over 170 000m2 of commercial space valued at R314 million during 2004.

The office market in Pretoria is very active at the moment with high demand for office space in the east, Roodeplaat and Montana area. As a result there is a shortage of right size space in these areas.

The industrial sector in Gauteng exerted a huge demand for premises, taking up 345,000m2, double the amount of industrial space leased during 2003, with deal values totalling R182 million.

“The majority of activity and demand has been for smaller space between 300 – 1500m2 where demand is outstripping supply. Larger space is still in demand and shortages are beginning to appear in popular areas, especially in the areas surrounding Johannesburg International Airport, which are well positioned for a diversity of industries,” said Grupel.

Retail continues to perform extremely well, resulting in negligible vacancies within the Investec Property Group portfolio. During 2004 tenants were secured for over 100 000m2 of space in Gauteng shopping centres, with lease values totalling R211 million.

“Almost all our existing tenants renewed their leases while, at the same time, new tenants reduced vacancies. We expect this trend to continue, at least until the end of 2005, and already the lower availability of prime space is becoming a limiting factor,” Grupel reported.

In order to address this, Investec Property Group will be creating more prime retail space through upgrades and refurbishments, specifically to select retail properties in Gauteng. New developments include the 43 000m2 Trade Route Shopping Mall in Lenasia.

This proactive approach is further driven by nearly all Investec Property Group’s net lets being achieved on budgeted rentals or greater.

Letting in KwaZulu Natal tripled, both in deal value and space, from 2003. The value of leases concluded during 2004 was R328 million (2003: R110 million) over 151 000m2 (2003: 42 000m2) with the majority of leases resulting from the retail and industrial sectors.

“On the back of low interest rates and renewed consumer confidence in the economy national retailers are enjoying increased sales which has resulted in demand for bigger stores and also new stores in centres where they are not represented,” said Greg de Klerk of Investec Property Group, KwaZulu Natal and Eastern Cape.

In meeting this need Walmer Park Shopping Centre in Port Elizabeth is being extended by 6 500m2 with Edgars opening a new 3 300m2 store and the balance of the space oversubscribed by other national retailers.

As in Gauteng, the demand for quality industrial space in KwaZulu/Natal has increased, to the extent that Investec Property Group’s industrial portfolio in KwaZulu/Natal is fully let.

“Resulting from the lack of available industrial space in the market and new developments coming on stream at high rentals, we achieved growth of between 10% and 20% in rentals on existing industrial buildings,” said de Klerk.

Similarly, in the Western Cape, there was a general improvement in industrial letting with the value of deals concluded increasing by 21%.

The total value of leases concluded in the Western Cape amounted to R235 million for 2004, increasing by 27% (2003: R185 million), while the total space let increased by 18% from 134,000m2 (2003) to 158,000m2.

“The most significant increase came from the commercial property sector which grew from R92 million to R130 million, an increase of 41%, which is indicative of the improvement in occupancy in this sector, in particular in Mowbray, Rondebosch and Claremont," said David Stoll, of Investec Property Group Cape Town.

Investec Property Group’s excellent leasing results for 2004, Grupel is quick to point out, were achieved through strong team-work between its leasing consultants and the country-wide network of external brokers active across all sectors. External brokers accounted for in excess of 35% of the total deals for the 12-month period.

End

Distributed on behalf of: Investec Property Group

For further information, please contact:

Investec Property Group

Steve Grupel

Tel. 011 286 7000

Or

Cape Town

Investec Property Group

David Stoll

Tel. 021 416 1000

Or

KwaZuly/Natal

Greg de Klerk

Tel. 031 365 4700

Cell 083 680 3756