For the year ended 30 June 2022

1. Basic and headline earnings per share

1.1 Summary of earnings per share (EPS), headline earnings per share (HEPS) and distributable income per share (DIPS)

	Earnings attributable		Weighted average number of shares		Cents per share
	2022 Rm	2021 Rm	2022	2021	2022	2021
Total operations
EPS       Basic	7 937	(497)	3 405 871 086	3 246 192 089	233.04	(15.31)
EPS       Diluted	7 937	(497)	3 419 088 046	3 258 891 090	232.14	(15.25)
HEPS     Basic	7 191	5 518	3 405 871 086	3 246 192 089	211.14	169.98
HEPS     Diluted	7 191	5 518	3 419 088 046	3 258 891 090	210.32	169.32

	Earnings attributable		Actual number of shares		Cents per share (DIPS)
	2022 Rm	2021 Rm	2022	2021	2022	2021
DIPS reconciliation	5 307	5 052	3 407 663 028	3 402 889 319	155.60	148.10

1.2 Reconciliation between basic earnings, diluted earnings and headline earnings

	SOCI#			Total gross and net
	2022 Rm	2021 Rm		2022 Rm	2021 Rm
Profit/(loss) for the year				7 937	(497)
Adjustments:
Fair value adjustments on investment property				(746)	6 015
Net investment property revaluation	6 262*	(4 381)*		(1 857)	4 745
Fair value adjustments: equity-accounted investments	(479)*	(1 206)*		(13)	1 239
NCI portion of fair value adjustments	6 262*	(4 381)*		1 124	31
Headline basic and diluted earnings				7 191	5 518

*

The fair value adjustment on investment property and NCI portions is included in the “Fair value adjustment, capital items and other charges” line item on the face of the statement of profit or loss and other comprehensive income, which total R6 262m (FY21: (R4 381m)). The fair value adjustments for equity-accounted investments are included in the “Non-distributable income” line item on the face of the statement of profit or loss and other comprehensive income, which totals (R479m) (FY21: (R1 206m)).

#

Statement of profit or loss and other comprehensive income.

1.3 Reconciliation of weighted average number of shares

	Weighted number of shares
	2022	2021
Weighted average number of shares	3 405 871 086	3 246 192 089
Number of shares as at 1 July	3 430 787 066	3 022 496 382
Shares issued during the year	–	254 975 929
Effect of treasury shares held	(24 915 980)	(31 280 222)
Diluted effect of share options granted to employees	13 216 960	12 699 001
Diluted average number of shares	3 419 088 046	3 258 891 090

2. Classification of financial assets and liabilities

2.1 Assets

	Designated  at fair value  through  profit or loss* Rm	Fair value through profit or loss Rm	Financial assets at amortised cost Rm	Outside scope of IFRS 9 Rm	Total Rm
2022
Cash and cash equivalents	–	–	2 841	–	2 841
Trade and other receivables	–	–	2 114	207	2 321
Derivative assets	–	2 492	–	–	2 492
Listed investments	–	1 489	–	–	1 489
Unlisted investments	–	921	–	–	921
Long-term loans granted	3 313	–	–	–	3 313
2021
Cash and cash equivalents	–	–	2 622	–	2 622
Trade and other receivables	–	–	1 841	246	2 087
Derivative assets	–	814	–	–	814
Listed investments	–	1 122	–	–	1 122
Unlisted investments	–	808	–	–	808
Long-term loans granted	2 534	–	–	–	2 534

2.2 Liabilities

	Designated  at fair value  through  profit or loss* Rm	Fair value through profit or loss Rm	Financial liabilities at amortised cost Rm	Outside scope of IFRS 9 Rm	Total Rm
2022
Trade payables	–	–	3 277	264	3 541
Derivative liabilities	–	817	–	–	817
Liabilities associated with assets classified as held for sale	–	–	39	–	39
Interest-bearing borrowings	62 857	–	–	–	62 857
Lease liability	–	–	1 826	–	1 826
2021
Trade payables	–	–	2 974	230	3 204
Derivative liabilities	–	1 995	–	–	1 995
Interest-bearing borrowings	61 947	–	–	–	61 947
Lease liability	–	–	2 235	–	2 235

*	An additional column has been added to distinguish between financial assets and liabilities designated at fair value through profit or loss and those mandatory through profit or loss.

3. Fair value estimation

3.1 Fair value measurement of assets and liabilities

The below table includes only those assets and liabilities that are measured at fair value including non-recurring items measured at fair value:

	2022				2021
	Fair value Rm	Level 1 Rm	Level 2 Rm	Level 3 Rm	Fair value Rm	Level 1 Rm	Level 2 Rm	Level 3 Rm
Assets
Recurring fair value measurement
Fair value of property assets	134 712	–	–	134 712	128 061	–	–	128 061
Listed investments	1 489	1 489	–	–	1 122	1 122	–	–
Unlisted investments	921	–	–	921	808	–	–	808
Long-term loans granted	3 313	–	–	3 313	2 534	–	–	2 534
Derivative assets	2 492	–	2 492	–	814	–	814	–
Non-recurring fair value measurement
Non-current assets held for sale	866	–	–	866	181	–	–	181
Total assets measured at fair value	143 793	1 489	2 492	139 812	133 520	1 122	814	131 584
Liabilities
Recurring fair value measurement
Interest-bearing borrowings	62 857	7 038	55 819	–	61 947	6 621	55 326	–
Derivative liabilities	817	–	817	–	1 995	–	1 995	–
Total liabilities measured at fair value	63 674	7 038	56 636	–	63 942	6 621	57 321	–

The carrying amount of assets and liabilities that are not measured at fair value reasonably approximate their fair value due to their short-term nature. These include trade and other receivables, cash and cash equivalents and trade and other payables.

3.2 Movement in level 3 instruments

	2022			2021
	Property assets Rm	Unlisted invest- ments Rm	Long-term loans granted Rm	Property assets Rm	Unlisted invest- ments Rm	Long-term loans granted Rm
Opening balance	128 242	808	2 534	139 113	922	2 338
Gain/(loss) from fair value adjustments and translation of foreign operations	4 650	77	587	(10 672)	(127)	(11)
Depreciation and amortisation	(387)	–	–	(96)	–	–
Accrued interest	–	–	238	–	–	185
Acquisitions	4 993	11	–	1 348	13	–
GSAH acquisitions	2 060	–	–	–	–	–
Reclassified from long-term loans granted to unlisted investments	–	42	(42)
Tenant incentives	–	–	–	357	–	–
Right-of-use assets	(26)	–	–	(539)	–	–
Disposals	(1 955)	(17)	–	(1 707)	–	–
Deconsolidation of C&R Luton	(1 981)	–	–	–	–	–
Transferred to investment property held for trading and development	(18)	–	–	(22)	–	–
Transferred from investment property held for trading and development	–	–	–	460	–	–
Advances	–	–	3	–	–	25
Settlements	–	–	(7)	–	–	(3)
Closing balance	135 578	921	3 313	128 242	808	2 534

3.3 Valuation process

A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Group has an established control framework with respect to the measurement of fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including level 3 fair values, and reports directly to the Group Financial Director.

The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third-party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of IFRS, including the level in the fair value hierarchy in which such valuations should be classified.

Significant valuation issues are reported to the Group’s Audit Committee.

When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

There were no transfers between levels during the year.

3.4 Valuation techniques and significant unobservable inputs

Level 2 instruments

Interest-bearing borrowings

Description		Valuation technique and inputs used		Significant unobservable inputs
Interest-bearing borrowings		Valued by discounting future cash flows using the applicable swap curve plus an appropriate credit margin of between 1.0% and 2.0% at the dates when the cash flow will take place (FY21: 1.0% to 3.6%).		Not applicable

The estimated fair value would increase/(decrease) if the credit margin were lower/(higher).

Derivative instruments

Description		Valuation technique and inputs used		Significant unobservable inputs
Forward exchange contracts		Valued by discounting the forward rates applied at year end to the open hedged positions using the swap curve of the respective currencies.		Not applicable
Interest rate swaps		Valued by discounting the future cash flows using the basis swap curve of the respective currencies at the dates when the cash flows will take place.		Not applicable
Cross-currency interest rate swaps		Valued by discounting the future cash flows using the basis swap curve of the respective currencies at the dates when the cash flows will take place.		Not applicable

Level 3 instruments

In terms of the Group’s policy, at least 75% of the fair value of investment properties should be determined by an external, independent valuer, having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued.

94.3% (FY21: 92.8%) of the South African portfolio based on fair value was externally valued at FY22. The balance of the South African portfolio was valued by Growthpoint’s qualified internal valuers.

The majority of the South African properties were valued at FY22 using the discounted cash flow of future income streams method by the following valuers who are all registered valuers in terms of section 19 of the Property Valuers Professional Act, No 47 of 2000:

Valuer company		Valuer		Qualification of the valuer
Mills Fitchet KZN (Pty) Limited		T Bate		MSc, BSc Land Econ (UK), MRICS, MIV (SA), professional valuer
Eris Property Group (Pty) Limited		C Everatt		BSc (Hons) Estate Management, MRICS, MIV (SA), professional valuer
Real Insights (Pty) Limited		TLJ Behrens		NDip (Real Estate in Prop Val), professional associate valuer
Jones Lang LaSalle (Pty) Limited		R Williams		CA(SA), ACMA, CGMA, MRICS
Broll Valuation and Advisory Services (Pty) Limited		R Long		BSc, MBA, MRICS, professional valuer
Knight Frank (Gauteng) (Pty) Limited		A Arbee		NDip (Real Estate in Prop Val), professional valuer
Rode & Associates (Pty) Limited		M Tighy		BSc Pr Sci Nat, MBL, MRICS, MIV (SA), professional valuer
Spectrum Valuations & Asset Solutions (Pty) Limited		PL O'Connell		NDip (Prop Val), MRICS, professional valuer
Premium Valuation and Advisory Services (Pty) Limited		Y Vahed		NDip (Real Estate in Prop Val), MIV (SA), professional valuer
Sterling Valuation Specialists CC		AS Greybe-Smith		BSc (Hons), MIV (SA), professional associate valuer
Mills Fitchet Cape (Pty) Limited		S Wolffs		NDip (Prop Val), professional associate valuer

The Australian properties were valued at FY22 using the discounted cash flow of future income streams method by Acumentis, CBRE, Colliers, JLL, Knight Frank, m3property, Savills and Urbis that are all members of the Australian Property Institute and certified practising valuers.

The United Kingdom properties were valued at FY22 using the income capitalisation approach method by CBRE and Knight Frank that are both members of the Royal Institution of Chartered Surveyors (RICS).

Investment property

At the reporting date, the key assumptions and unobservable inputs used by the Group in determining fair value were in the following ranges for the Group’s portfolio of properties:

	Significant unobservable inputs and range of estimates used
Description	Valuation technique	Fair value Rm		Discount rate %	Exit capitalisation rate %	Capitalisation rate %	Rental growth rate %
Retail		24 090		12.88	8.38	8.09	4.41
		9 287		12.25 – 12.50	7.50 – 8.25	7.50 – 8.25	3.99 – 5.00
		7 931		12.75 – 13.00	8.00 – 9.00	7.75 – 9.00	3.50 – 5.00
		5 637		13.25 – 13.50	8.25 – 9.75	8.00 – 9.50	3.49 – 5.00
		1 235		13.75 – 14.00	8.75 – 10.00	8.75 – 9.75	4.00 – 4.70
Office		24 489		13.16	9.20	8.76	3.79
		2 767		11.00 – 12.00	8.50 – 9.25	8.00 – 9.25	2.50 – 3.50
		5 646		12.25 – 12.75	8.50 – 9.75	8.00 – 9.25	2.50 – 5.00
		8 155		13.00 – 13.50	8.25 – 11.00	8.00 – 10.50	2.50 – 5.00
		7 921		13.75 – 14.50	9.00 – 10.50	8.50 – 10.00	2.99 – 5.00
Industrial		10 977		13.60	9.84	9.42	4.10
		869		11.50 – 12.75	9.00 – 10.00	8.75 – 10.00	3.55 – 4.00
	Discounted cash flow model	5 785		13.00 – 13.75	8.75 – 10.75	8.50 – 10.25	3.55 – 5.00
		4 085		14.00 – 14.75	9.50 – 11.25	9.00 – 10.75	3.49 – 5.00
		238		15.00 – 16.00	10.75 – 13.00	10.00 – 12.00	3.50 – 4.70
GHPH		3 385		14.38	9.38	9.42	5.00
		2 664		13.50 – 14.50	8.50 – 9.50	8.50 – 9.50	5.00 – 5.00
		721		15.25 – 15.50	10.25 – 10.50	10.25 – 10.75	5.00 – 5.00
GSAH		2 031		15.39	10.19	9.94	5.11
GOZ office		38 402		5.78	5.27	5.00	2.90
		13 873		5.50 – 5.75	4.13 – 6.27	3.75 – 6.02	2.20 – 3.70
		16 874		5.88 – 6.13	5.00 – 6.13	4.75 – 5.88	2.20 – 3.70
		7 655		6.25 – 6.50	5.50 – 6.50	5.37 – 6.75	2.20 – 3.70
GOZ industrial		19 352		5.65	5.25	4.72	3.00
		12 657		5.25 – 5.50	4.00 – 9.75	4.00 – 7.00	2.50 – 3.50
		3 282		5.75 – 6.00	4.62 – 9.75	4.50 – 6.16	2.50 – 3.50
		3 413		6.25 – 6.50	5.46 – 5.92	5.14 – 5.61	2.50 – 3.50
Total		120 695

Description	Valuation technique	Fair value Rm		Value/m2
Retail		360		5 496.14
		153		1 047.49 – 6 807.85
		207		14 572.67 – 14 572.67
Office		1 199		4 633.30
	Market comparable approach	624		1 532.30 – 9 279.76
		160		11 438.87 – 15 656.39
		415		25 954.63 – 25 954.63
Industrial		1 094		1 766.46
		822		520.54 – 7 175.56
		272		6 540.22 – 12 807.84
GSAH		202		10 628.28
Total		2 855

			Significant unobservable inputs and range of estimates used
Description	Valuation technique	Fair value Rm		Income capitalisation rate %	Exit capitalisation rate %
C&R retail		8 007		7.29	8.12
	Income capitalisation approach	6 278		4.64 – 7.41	6.51 – 7.29
		1 511		9.98 – 11.23	11.35 – 12.86
		218		13.23 – 13.23	17.43 – 17.43
Total		8 007

Further assumptions are used in the valuation of investment property. The estimated fair value would increase/(decrease) if the expected market rental growth was higher/(lower), expected expense growth was lower/(higher), the vacant periods were shorter/(longer), the occupancy rate was higher/(lower), the rent-free periods were shorter/(longer), the discount rate was lower/(higher) and/or the reversionary capitalisation rate was lower/(higher).

The property portfolio on pages 82 to 104 of the Group annual financial statements provides further detail on each of the Group’s investment properties.

Long-term loans granted

Description		Valuation technique			Significant unobservable inputs	Range of inputs	Relationship of unobservable inputs to fair value
V&A Waterfront		Valued by discounting future cash flows using the South African swap curve plus an appropriate credit margin at the dates when the cash flows will take place.			Counterparty credit risk impacting the discount rate	Discount rate at prime + 2%	A change in the discount rate by 50 bps would increase/(decrease) the fair value by R68.7m/(R70.1m).
Acucap Unit Purchase scheme		Valued by discounting future cash flows using the South African swap curve at the dates when the cash flows will take place, capped at the Growthpoint share price at FY22.			Counterparty credit risk impacting the interest rate	6.55% – 8.36%	A change in the interest rate would not have an impact on the valuation as the loans were fair valued to the Growthpoint share price at FY22. Growthpoint shares are held as security for the loans.

Unlisted investments

Description		Valuation technique			Significant unobservable inputs	Range of inputs (probability-weighted average)	Relationship of unobservable inputs to fair value
Lango	Valued by calculating the company’s percentage of investment in the Fund by the net asset value.				Discount rate (%)	13.25% – 16.75% (14.16% average)	A change in the discount rate by 50 bps would increase/(decrease) the fair value by R160.9m/ (R155.5m).
					Exit capitalisation rate (%)	8.75% – 12.0% (8.86% average)	A change in the exit capitalisation rate by 50 bps would increase/(decrease) the fair value by R148.4m/(R137.8m).