Transcend Residential Property Fund

TRANSCEND RESIDENTIAL PROPERTY FUND

The market leader in quality affordable housing in South Africa

Investor presentation – November 2018

0 DISCLAIMER

This document has been compiled by Tenurey BSM Proprietary Limited (“Tenurey”) from information provided by the management of Transcend Residential Property Fund Limited (“Transcend”) and from publicly available sources. Information contained herein involves elements of subjective judgment and analysis which may or may not be correct and has not been independently verified.

While the information contained herein is believed to be accurate, Tenurey has not conducted any investigation with respect to such information. No representation or warranty, express or implied is or will be given by Transcend or Tenurey or their respective directors, partners, employees or advisors or any other person as to the accuracy, completeness or fairness of this document and, so far as permitted by law and except in the case of fraud by the party concerned, no responsibility or liability whatsoever is accepted for the accuracy or sufficiency thereof or for any errors, omissions or misstatements negligent or otherwise relating thereto.

Transcend shall only be bound by those particular representations and warranties set forth in definitive written transaction documents, when and if such transaction documents are executed and subject to such restrictions and limitations as may be contained therein.

This document includes certain statements, estimates, targets, forecasts and projections provided by Transcend with respect to Transcend’s anticipated future performance. Such statements, estimates, targets, forecasts and projections reflect significant assumptions and subjective judgments and analysis by Transcend’s management concerning anticipated results which may or may not prove to be correct and there can be no assurance that any estimates, targets, forecasts or projections are attainable or will be realised. Tenurey does not assume responsibility for verifying any of such statements, targets, estimates, forecasts and projections. Nothing contained in this document is, or shall be relied upon as, a promise or representation, whether as to the past or the future. Accordingly, neither Transcend nor Tenurey nor any of their respective directors, partners, employees or advisors nor any other person, shall be liable for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on any statement in or omission from this document and any such liability is expressly disclaimed. In particular, but without limitation, no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on, any estimates, targets, forecasts or projections contained in this document (or otherwise provided by or on behalf of Transcend with respect to the subject matter of this document). In all cases, addressees should conduct their own investigation and analysis of Transcend and the information contained in this document.

This presentation and the documents provided with this presentation are confidential and may not be disclosed to any third party without the prior written consent of Tenurey and Transcend.

TRANSCEND RESIDENTIAL PROPERTY FUND 1 PRESENTERS

Rob Wesselo Solly Mboweni Myles Kritzinger Chief Executive Officer – Chief Operations Officer Chief Financial Officer Transcend Managing Director – IHS

TRANSCEND RESIDENTIAL PROPERTY FUND 2 PRESENTATION OUTLINE

Page 1. Executive summary 4 2. Transcend 7 2.1 Current group structure 8 2.2 Current portfolio overview 9 2.3 Current board of directors 10 2.4 Proposed board and management 11 2.5 Role of IHS 12 2.6 Investment case – why Transcend 14 3. Proposed Transactions 15 3.1 IHS Res 1 Transactions 16 3.2 Other Transactions 18 3.3 Funding and capital structure 19 4. Financials 20 4.1 Pro forma effects – DPS 21 4.2 Pro forma balance sheet 22 5. Conclusion 23 Annexures 26 I Transcend existing portfolio 27 II IHS Res 1 Properties, Protea Glen & Silverleaf 44 III Portfolio post Proposed Transactions 55 IV Transcend vs MSCI Residential Benchmark 57 V IHS and MMA (Hunt) 59

TRANSCEND RESIDENTIAL PROPERTY FUND 3 1. EXECUTIVE SUMMARY

Transcend at a glance (status quo) Current market metrics Rmil Closing share price (R) 5,60 • Listed on the Altx in December 2016 at R6.75 (21% Shares outstanding (mil) 73.6 discount to NAV) Market capitalisation 412,2 Listing • Intention to migrate to the Main Board (speciality Net interest bearing debt 509.3 REIT sector) post implementation of the Proposed Enterprise value 921,5 Transactions Investment property 1 252 • A residential REIT, focused on affordable housing Gearing (LTV) 42% that is lifestyle enhancing and well located in high Net asset value (NAV) as at 30 June 2018 764.8 Profile growth urban areas NAV per share (R) 10,39 • Exposure to Gauteng, Mpumalanga* and the Interim DPS (Cents) 30.10 Western Cape Discount to NAV -46% Forward yield 12,2% • 14 properties comprising 2,532 units* • 128,915m² GLA Share price since listing (R) • Portfolio value of R1.25bn Portfolio overview^ Volume traded since listing: 226,082 shares • Occupancy: 96%^ 8,00 Value traded since listing: R1,393,907 • Avg gross rental per unit: R5,576 1,981 shares traded at R5.60 • 90% of portfolio comprising 2 bed, 1 bath units 7,00 6,00 • Transcend = 2nd largest residential focused listed property fund, with high quality assets, safe and 5,00 secure lifestyle complexes and a focus on

greening

Jun-17 Jun-18

Sep-17 Sep-18

Dec-16 Dec-17 Mar-18 Investment case • Properties are +/- 5 years old Mar-17 • Defensive asset class Geographic spread of properties • Residential fund expertise through International Housing Solutions’ (“IHS”) – a market leader in residential real estate investment

• Access to a future R6.4bn asset pipeline consisting Pipeline of 9,900 units through IHS

*Includes Acacia Place (sale agreement signed in Sep 2018 to dispose of Acacia Place for R127.5mil) 4 ^As at 1 Nov 2018. Occupancy includes Acacia Place with a 10% vacancy TRANSCEND RESIDENTIAL PROPERTY FUND 4 1. EXECUTIVE SUMMARY

Proposed Transactions and Capital Raise

• Res 1 Properties: 1,983 units spread across 7 properties from IHS Res 1 Fund for R1.21bn (9.76% yield and 13.4% discount to independent valuation); • Protea Glen: 176 units from a wholly owned subsidiary of South Africa Workforce Housing Fund (“SAWHF”) for Acquisitions R60mil (10.3% yield and 2.1% discount to independent valuation); • Silver Leaf: 76 units for R44.5mil (9.6% yield); and • Vanguard: 60 units for R33.3mil (9.8% yield) (transferred in Aug 2018) • Total purchase consideration: ±R1.35bn at an average acquisition yield of 9.78%

• Purchase consideration (including transaction costs) funded by: debt of ±60% (R825mil) and equity of ±40% Funded by (R551mil)

• R6.29 per share (ex-div), c. R6.44 cum dividend (as at 1 Dec 2018) Equity raise • Forward yield of 10.5% (post Proposed Transactions) • Discount to NAV of 31% (post Proposed Transactions)

Pre-commitments and • Emira Property Fund: up to R337mil of equity (max 34.9% shareholding and a min 25.1% shareholding) and a SH loan facility of R105mil underwrite • MMA Capital Management (“MMA”): Underwrite of R105mil

Shareholding post • SAWHF: 38.4% (intention is for SAWHF to dilute over time, as Transcend pipeline is executed) • Emira: 25.1% (minimum) Proposed Transactions • Public: 36.5%^ (assuming no underwrite take-up)

• Investors meetings (12 – 21 Nov) • Site visit (22 Nov) Timing • Final CPs (expected to be received by 30 Nov) • Equity commitments (by 30 Nov) • Effective date – targeting 1 Dec and issue of new shares – 1st week of Dec

^Includes SA Corporate Real Estate Limited (4.3%), who has communicated that they will dispose of their stake as part of the new equity raise or post the Proposed Transactions

5 TRANSCEND RESIDENTIAL PROPERTY FUND 5 1. EXECUTIVE SUMMARY

Rationale of Proposed Transactions

✓ Ability to secure portfolio at deep discount to fair value, despite scarcity value of large residential portfolios ✓ Lifestyle enhancing properties in well located, high growth urban areas ✓ Stable income stream at an attractive yield ✓ Highly sought after properties of superior quality to comparable portfolios in the market ✓ Favourable arrangement with IHS provides ability to access significant future pipeline ✓ Benefits of institutional knowledge of assets, which also ensures efficient handover ✓ Adds critical scale providing portfolio efficiency benefits ✓ Facilitates increased free float, liquidity and Main Board migration

Snapshot of Transcend post the Proposed Transactions

81% Gauteng, Market Cap 31% discount 10.5% forward 22 properties 254,201m2 GLA 19% Western R970m to NAV yield Cape*

Portfolio value R6,406 avg 9,900 units LTV of gross monthly of 4,442 units 46.0% 5.99% vacancy (R6.4bn) R2.63bn rental / unit^ pipeline

*Based on value ^ For forecast period of FY2019 TRANSCEND RESIDENTIAL PROPERTY FUND 6 2. TRANSCEND

TRANSCEND RESIDENTIAL PROPERTY FUND 7 2.1 CURRENT GROUP STRUCTURE

IHS Property SA Workforce IHS Asset Management Other SA Corporate Emira Housing Management (“IHSPM”)3 Fund SA 1 (“Manco”)

100%

0.9% 9.0% 9.9% 80.2% SAWHF PVE (“SAWHF”)

Property Management Asset Management Agreement Agreement

• Fee: annual asset management fee of 0.50% of • Avg collection fee of 6.5% (+ VAT) company EV (+ VAT) • 3 month’s notice to cancel • Term: 10 years from Dec 2016 and option for 100% ownership of 14 Transcend to renew for further 5 years (every 5 years) properties1 • Option: Transcend has option to purchase equity or business of Manco at fair value (to be negotiated) once market cap reaches R4bn

Acacia 67 on 7th Alpine Ekhaya Ekhaya Jackalberry Kensington Molware Village Terenure Theresa Trade- Vanguard(2) Parklands Place(1) Edenvale Mews Fleurhof Jabulani Close Place Estate Seven Estate Park winds Stone Arch Estate Estate

Notes 1. Acacia Place: As announced on 18 September 2018, Transcend has concluded a sale agreement to dispose of Acacia Place (325 units) for R127.5mil 2. Vanguard: A fully-let rental enterprise comprising 60 sectional title units was acquired for R33.3 million on 23 August 2018 8 3. Wholly owned by MMA Capital Management. The intention is for IHSPM to become a wholly owned subsidiary of IHS in 2019

TRANSCEND RESIDENTIAL PROPERTY FUND 8 2.2 CURRENT PORTFOLIO OVERVIEW

• Transcend’s current property portfolio comprises 2,532 units (across 14 properties) with a valuation of R1.25bn • Transcend concluded a sale agreement in September to dispose of Acacia Place (325 units) for R127.5mil. Acacia Place had exposure of 39% to bulk leases (which expired) for the interim period ending 30 June 2018, resulting in a 42% vacancy (based on units) • The rest of the portfolio has no exposure to bulk leases and is defensive in nature

Weighted Total number average Total number Independent Current of units Total GLA rental per No. Property name Location of units in Valuation Vacancy (% owned by (m²) unit per complex R’000 of units) Transcend month (R/units) 1 67 on 7th Edenvale, Gauteng 204 157 8,478 97,500 5,942 0.60% 2 Acacia Place(2) Witbank, Mpumalanga 325 325 17,891 127,500 6,853 10.00% 3 Alpine Mews Eersterivier, Western Cape 90 90 4,005 36,200 4,659 1.00% 4 Ekhaya Fleurhof Fleurhof, Gauteng 162 162 6,642 69,500 4,336 1.23% 5 Ekhaya Jabulani Jabulani, Gauteng 244 244 10,004 90,600 4,112 2.46% 6 Jackalberry Close Jansen Park, Gauteng 252 208 10,713 112,300 5,589 6.35% 7 Kensington Place Ferndale, Gauteng 56 56 2,376 35,100 6,233 1.79% 8 Molware Kosmosdal, Gauteng 252 252 11,937 138,500 5,542 3.57% 9 Parklands Parklands, Western Cape 187 187 10,044 98,100 6,092 4.28% Village Seven, 10 Castleview, Gauteng 114 114 6,039 55,100 5,414 4.39% Stone Arch Village 11 Terenure Estate Terenure, Gauteng 350 350 22,028 214,200 6,380 4.00% Theresa Park 12 Theresa Park, Gauteng 242 242 12,388 98,000 4,346 5.79% Estates 13 Tradewinds Ferndale, Gauteng 85 85 3,730 46,000 6,119 0.00% 14 Vanguard Heideveld, Western Cape 60 60 2,640 33,300 6,057 1.49% Total 2,623 2,532 128,915 1,251,900 5,5763 4.34%4

Notes: 1. Refer to Annexure I on slide 27 for further detail on all the above properties 3. As at 1 Nov 2018 2. As referred to on slide 8, Transcend has signed an agreement to sell Acacia Place for R127.5mil 4. Vacancy excl Acacia Place is 3.45% TRANSCEND RESIDENTIAL PROPERTY FUND 9 2.3 CURRENT BOARD OF DIRECTORS

Name Background

Rob Wesselo (54) Rob is responsible for the South African operations of International Housing Solutions, a post he has held since 2010. In this role, he is Chief Executive Officer responsible for sourcing investments, structuring, and negotiating deals with developers and managing the operations of IHS in South LLB from WITS Africa. Before joining Transcend, Rob was the Head of Commercial Property Finance (Property Investments) at ABSA. He has held other property-focused positions such as Commercial Director at Pangbourne Properties and Head of Listed Property Funding at RMB.

Solly Mboweni (49) Prior to joining Transcend, Solly was at ABSA for 4 years in a number of senior positions. He has also managed the asset Chief Operations Officer management and property development departments at Liberty Properties. Solly recently served as the Vice President of SAIBPP BCom and PGDip in Property Studies (WITS) (South African Institute of Black Property Practitioners). Solly is also Head of Housing Operations at IHS, with direct responsibility for the activities of New Business and the Asset Management of the Rental Portfolio Since 2014.

Myles Kritzinger (34) Chief Financial Officer Myles was appointed as CFO for Transcend on 9 March 2018. He has experience in the affordable housing market and new fund BCom(Acc)(Hons) development as former Dealmaker at IHS. Former Manager at Deloitte & Touche, former Financial Analyst at Absa Capital and Absa CA(SA), Diploma in Insolvency Law (SARIPA) Retail banks and former Consultant at Nimble Risk Services.

Robert Emslie (59) Chairman, independent Robert is an independent non-executive director of Finbond Group Limited, the independent chairman at Silverbridge Holdings Limited non-exec director and an independent director of New Europe Property Investments Plc. He is also on the boards of a number of unlisted companies. Undergraduate & Graduate degree from RAU

Faith Khanyile (50) Independent non-exec director Faith is the CEO of WDB Investment Holdings (WDBIH) and has been associated with WDBIH for over 18 years. She spent 12 years BA (Economics) Wheaton, USA with Standard Bank, Corporate & Investment Bank from 2001 to 2013 in various senior management and executive roles. MBA (Finance) Bentley, USA

Michael Aitken (58) Michael has been a non-executive director of Strategic Real Estate Managers (Pty) Ltd and Emira Property Fund Limited since April Independent non-exec 16, 2007. He also served as a non-executive director of Hyprop Investments Limited from August 2000 to June 2013, acting as director chairman from August 2007 to June 2013. BA and LLB

Michael Falcone (55) Non-executive director Mike is the chief executive officer and president of MMA Capital Management, a position he has held since January 1, 2005. Prior to BA (Economics) (Dartmouth) his involvement with MMA Capital Management, Mike served as senior vice president and partner at the Shelter Group. and MBA from Harvard

Cathal Conaty (53) Non-executive director In various positions in the past 15 years, he has set up and managed private investment funds, served as a Regional Vice President of BA (University College) (Dublin) property management, and represented investors’ interests in a variety of market-rate and subsidised properties. MBA (IESE) (Barcelona, Spain)

TRANSCEND RESIDENTIAL PROPERTY FUND 10 2.4 PROPOSED BOARD AND MANAGEMENT

Proposed management and board composition (post Proposed Transactions)

• A process is underway through Transcend’s nominations committee to change the Board and appoint key personnel to the Manco (anticipated to take place in early FY19 post implementation of the Proposed Transactions)

• It is Transcend’s intention to implement a share incentive scheme for the executive directors and management team in FY2019

Executive directors and key management (to be employed by Manco)

• Solly Mboweni and Myles Kritzinger currently serve as executive directors of Transcend

• Vanessa Perfect is currently the Head of Rental Asset Management at IHS

• It is intended that Solly, Myles and Vanessa will be dedicated exclusively to Transcend following the management restructure to be determined by the nominations committee

Non-executive directors

• It is anticipated that certain of the non executive board directorships will be reconstituted to take into account the prevailing JSE Main Board requirements as well as to enhance capacity and the requisite skill set of Transcend

TRANSCEND RESIDENTIAL PROPERTY FUND 11 2.5 ROLE OF IHS

Focus: Affordable housing Focus: Green housing Equity: Private Equity Fund Equity: Private Equity Fund Deals: Develop & Rental Location: SA Size: R1.8bn (raised) Deals: Develop & Rental Focus: Property Management Units: 28,000 (committed) Size: R2.1bn (raised) Focus: SA & SSA End Life: Apr 2019 (ext.) Units: 11,591 (committed) Deals: Rental End Life: Jul 2024 Size: 9,138 units under mgmt. Employees: 175 Focus: Affordable Green housing Name: Development Fund SAWHF Equity: Private Equity Fund Location: SA Location: SSA (Nam & Bots) Deals: Develop units for REIT’s IHS Deals: Develop & Rental Size: $150m (target) IHS PM FUND II Size: R1.02bn (raised) Units: 17,500 (projected units) (SA) Units: 942 (committed) End Life: Jul 2024

Name: Kenya Rental Fund Location: Kenya IHS Focus: Mid Mkt Rental Deals: Green Rental Equity: Private Equity JV Size: $250m (target) IHS Location: SA Units: 7,500 (projected units) NEW Deals: Rental BUSINESS FUND II (SSA) Size: R796m (committed) RES I* Units: 2,093 (committed) End Life: N/A

• Established in 2007, a real estate fund manager focused on development and management of affordable housing communities • Recognise the need to both create viable housing investments and provide broader community infrastructure with easy access to schools, shops and work opportunities • Owned by MMA – a subsidiary of Hunt Company (private US family company – 7th largest US Multifamily Owner) • 212 employees (37 in IHS and 175 in IHS PM) • Based on the current size of Transcend, the external Manco is a more cost effective approach than performing this function internally. Ability for Transcend to leverage off IHS’ resources, network and pipeline of opportunities

Notes: *The units in Res 1 are in the process of being acquired by Transcend TRANSCEND RESIDENTIAL PROPERTY FUND 12 2.5 ROLE OF IHS

Highlights of IHS include:

36 900 units / stands 29 800 units / stands 21 000 units / stands 7 100 units under commenced since completed since 2007 sold since 2007 construction 2007

R5.8bn of investor 76 investments in 9 138 units in rental 3 300 units approved equity commitments residential real estate portfolio and fully funded managed under IHS projects

Local pipeline Potential US Multifamily strategy

• Transcend will leverage off of IHS’ strong network and deal making capability for future external acquisitions – access to: - an existing pipeline of 9,900 units (R6.4bn) through the IHS managed funds - An existing pipeline from 3rd party developers of ±760 units R653mil • Transcend has the ability to leverage off IHS’ network and relationship with MMA, which in turn has access to the Hunt Company - 105,018 Multifamily housing units developed - Hunt is the 7th largest Multifamily owner in the US

Notes: *The units in Res 1 are in the process of being acquired by Transcend TRANSCEND RESIDENTIAL PROPERTY FUND 13 2.6 INVESTMENT CASE – WHY TRANSCEND

• Management team has extensive track record in residential property investment and management Track record • IHS has become a market leader and has been a driver of the institutional residential rental market in SA

• Transcend focuses on medium density, secure estates with lifestyle amenities • The affordable market, is one of the few in which demand exceeds supply with strong fundamentals, given the Unique defensive ever increasing trend in South Africa towards urbanisation market segment • The affordable market has the lowest vacancy rate of the residential rental market • Counter cyclical nature of residential property

• In addition to the Transcend portfolio, IHS currently manages approximately 9,138 quality affordable rental properties and Transcend is well placed to acquire these units from the respective funds (upon exit) • Transcend will leverage off IHS’ strong network and deal making capability for future acquisitions Pipeline and growth • IHS is experienced in sourcing and stabilising properties, which will be used to the benefit of Transcend strategy • Transcend is gaining increased exposure to off-market transactions given its rapidly increasing profile within the SA market • Transcend can also leverage off IHS’ shareholder – MMA (Hunt) (which specialises in investing in affordable housing and clean energy) and gain access to Hunt’s US portfolio

• Focus on greening • High quality assets • Lifestyle complexes • Safe and Secure • Internal amenities • +/- 5 years old Competitive edge • Low maintenance • Close to work and transport • Community friendly

TRANSCEND RESIDENTIAL PROPERTY FUND 14 3. PROPOSED TRANSACTIONS

TRANSCEND RESIDENTIAL PROPERTY FUND 15 3.1 IHS RES 1 TRANSACTIONS

Key transaction details

• 1,983 units spread across seven properties comprising Midrand Village, De Velde, Birchwood Village, Southgate Units acquired Ridge, Urban Ridge (West), Urban Ridge (East) and Urban Ridge (South) • International Housing Solutions Residential Partners 1 (RF) Proprietary Limited (“IHS Res 1”) - currently managed Seller by IHS. IHS Res 1 is 95% owned by PSP (Public Sector Pension Investment Board – one of Canada’s largest pension investment managers). PSP has a 45% stake in SAWHF • R1.21 billion at a weighted average yield of 9.76%, subject to subject to an escalation of 6% per annum (pro-rated Purchase consideration accordingly) from 1 December 2018 (price determination date) until the date of transfer of each of the respective units

Settlement • To be settled 100% in cash

• Gearing of 60% (c. R742 million), with the intention to settle the balance of the purchase consideration by raising Funding c. R495 million of new equity by way of a Vendor Placement • Emira has provided an irrevocable commitment to subscribe for a minimum 25.1% of Transcend shares and a maximum of 34.9% of the Transcend shares in issue post implementation of the Proposed Transactions Underwriting and − MMA Capital has provided an underwrite of R105mil commitments − Emira has also provided an underwrite of R105mil in the form of a shareholder loan to the extent that there is a shortfall in the equity raise • Shareholder approvals (by 30 Nov 2018) − Related party transaction (IHS Res 1 is a related party) (50% +1) of independent Transcend shareholders − Issue greater than 30% of shares in issue (75% +1) of all Transcend shareholders Conditions precedent • JSE approval – Category 1 related party transaction and Reverse Takeover • Debt (by 21 Nov 2018) • Competition Commission (approved on 14 Nov 2018) • Raising the equity amount (by 14 Dec 2018) • Effective date: First day of the month following the last CP being fulfilled - expected to be 1 December 2018 • Closing date: Effective date and − 1 Dec 2018 (if CPs are met by 23 Nov 2018); or closing date − 14 Dec (if CPs are met between 24 Nov and 30 Nov); or − 31 Jan (if CPs are met between 1 Dec and 14 Dec 2018)

TRANSCEND RESIDENTIAL PROPERTY FUND 16 3.1 IHS RES 1 TRANSACTIONS (continued)

Valuation 1 Dec ’18 – 30 No of Independent exceeding Property Location Purchase price Nov ‘19 Cap Rate units valuation purchase forecast NOI consideration Midrand Village 225 Clayville, Gauteng R139,295,212 R153,300,000 R14,004,788 R12,525,642 8.99% De Velde, Western De Velde 310 R289,144,251 R337,700,000 R48,555,749 R23,681,581 8.19% Cape Birchwood Village 360 Chartwell, Gauteng R266,463,076 R288,300,000 R21,836,924 R25,866,036 9.71%

Southgate Ridge 412 Naturena, Gauteng R170,420,202 R216,600,000 R46,179,798 R19,751,200 11.59%

Urban Ridge (West) 260 Midrand, Gauteng R127,516,812 R153,100,000 R25,583,188 R13,674,100 10.72%

Urban Ridge (East) 184 Midrand, Gauteng R98,783,206 R109,600,000 R10,816,794 R10,394,953 10.52%

Urban Ridge (South) 232 Midrand, Gauteng R118,277,360 R138,800,000 R20,522,640 R12,219,568 10.33%

Total 1,983 R1,209,900,119 R1,397,400,000 R187,499,881 R118,113,079 9.76%

• Transcend is acquiring the IHS Res 1 units at a 13% discount to their independent market valuation

• The IHS Res 1 units offer stable and secure income streams and are located in well-situated, high growth urban areas

• Three of the properties – Midrand Village, De Velde and Birchwood Village are well suited to a sectional title sales program and could generate greater value for Transcend if Transcend disposes of the individual units at market value over a period of time vs. keeping the units as rental stock

• Transcend will re-invest such proceeds and acquire additional rental units by leveraging off IHS’ network and pipeline of managed funds and making 3rd party acquisitions

TRANSCEND RESIDENTIAL PROPERTY FUND 17 3.2 OTHER TRANSACTIONS

• On 3 April 2018 it was announced that Transcend is in the process of acquiring the Silverleaf Portfolio − Agreement entered into between De Facto Investments 264 Proprietary Limited and Transcend on 28 March 2018 – Transcend will acquire 76 sectional title units Silverleaf − For an aggregate purchase consideration of R44.5 million • Due to delays in the finalisation of town-planning amendments, It is expected that Silverleaf should transfer to Transcend by 1 December 2018

• On 12 June 2018 Transcend announced that it has entered into an agreement with SAWHF SA Rental 4 Trust • Transcend acquired 60 sectional title units in the scheme known as Vanguard Residential Village 3 for an aggregate Vanguard purchase consideration of R33.3 million − The Vanguard transaction has been successfully concluded, with Vanguard transferring to Transcend on 23 August 2018

• On 8 October 2018 Transcend announced it has concluded a legal agreement with Sunnyshore Trade and Invest 105 Proprietary Limited (“Sunnyshore”) (owned by SAWHF) to acquire 176 residential sectional title units in two sectional schemes known as Protea Glen for R60 million • The Protea Glen Transaction is subject to fulfilment of inter alia the following suspensive conditions, as set out in the Protea Glen Sale Agreements: Protea Glen − Transcend complying with the applicable JSE Listings Requirements − Approval from the shareholders of Sunnyshore − Approval from Transcend shareholders (included with IHS Res 1 Transaction) − Transcend conducting a technical due diligence − Transcend raising the required funding to settle the purchase consideration • The effective date (transfer) of the Protea Glen Transaction is estimated to be on or about 1 December 2018

• On 18 September 2018 Transcend announced that it has entered into a sale agreement with Instratin Properties Proprietary Limited (“Instratin”) to: Acacia Place − dispose of all 325 units comprising Acacia Place located in Duvha, eMalahleni (Witbank), Mpumalanga, to Instratin − for a cash price of R392,308 per unit amounting to a total cash price of R127.5 million − the proceeds of which will be used to reduce interest-bearing liabilities until required for new acquisitions

TRANSCEND RESIDENTIAL PROPERTY FUND 18 3.3 FUNDING AND CAPITAL STRUCTURE

Analysis of total funding requirement Salient terms of private placement

▪ Quantum Proposed Transactions (at cost) R1.348bn ▪ Excluding Emira’s total subscription of 25.1%, approximately R308mil is available for issue to the public Transaction costs (incl. VAT) R28m ▪ Pricing ▪ Indicative clean pricing range of R6.29 per share, (cum price of Total funding requirement R1.38bn R6.44, assuming an issue date of 1 December 2018) ▪ Forward yield of 10.5% Equity requirement: maximum (40%) R551m ▪ Timing ▪ To be completed after the last of the conditions precedent being Less: Emira (Assume Emira take up 25.1%) (R243m) fulfilled, which is expected to be met by 30 November 2018

Private Placement R308m

Utilisation of SBSA and Nedbank facilities R825m

LTV ratio post the Proposed Transactions 46%

Salient terms of debt funding

Standard Bank & Nedbank Facility amount Terms Interest rate Profile

Facility (1) & (A) R295m 3 years 3-month JIBAR +190 bps Interest quarterly

Facility (2) & (B) R295m 5 years 3-month JIBAR +225 bps Interest quarterly

Facility (3) (RCF) R150m R857m 3 years Prime less 1% Interest monthly

Facility (4) R107m 3 years 3-month JIBAR +215 bps Interest quarterly

Facility (5) R10m 3 years Prime less 1% Interest quarterly

TRANSCEND RESIDENTIAL PROPERTY FUND 19 4. FINANCIALS

TRANSCEND RESIDENTIAL PROPERTY FUND 20 4.1 PRO FORMA EFFECTS – DISTRIBUTION PER SHARE

Transcend financial effects based on the implementation of the Proposed Transactions, being funded with 40% equity and 60% debt

Pre Proposed Transactions 31-Dec-19 Forecast distribution (pre Proposed Transactions)1 ZAR 49 396 760 # shares in issue # 73 605 662 DPS Cents 67,11 Growth ±5,0% Pro forma adjustments ZAR Net income from Proposed Transactions2 128 706 605 Increase in Manco fee3 -6 288 342 Increase in interest cost4 -73 219 573 Net return on re-investment of proceeds5 2 698 871 Net increase in distributable income 51 897 561 Distributable income post Proposed Transactions 101 294 321 New shares issued # 80 096 999 Total shares in issue post Proposed Transactions 153 702 661 DPS post Proposed Transactions Cents 65.90 Dilution in DPS (from current forecast) -1,8% Forward yield (at issue price of R6.29) 10,5%

Notes: 1. Already takes into account the Vanguard and Acacia Place transactions as well as the issue of 7.3mil shares to Emira 2. Assumes effective date of 1 Dec 2018 and included 12 months net income at acquisition yields 3. Manco fee at 0.5% + VAT 4. Interest at a weighted average cost of 9.1% 5. Assumes re-investment of proceeds from sale of sectional title units relating to Midrand Village, De Velde and Birchwood Village

TRANSCEND RESIDENTIAL PROPERTY FUND 21 4.2 PRO FORMA BALANCE SHEET

Balance sheet FY 31 December 2017 Interim 30 June 2018 Post Proposed Transactions

Assets

Investment property 1,218,640,000 1,219,201,000 2,630,519,090

Other 51,243,000 47,254,000 174,754,000

Total assets 1,269,883,000 1,266,455,000 2,805,273,090

Liabilities

Interest bearing 555,324,000 555,377,000 1,379,984,548

Other liabilities 25,730,000 23,134,000 23,134,000

Total liabilities 581,054,000 578,511,000 1,403,118,548

NAV 688,829,000 687,944,000 1,402,154,542

Number of shares in issue 66,305,662 66,305,662 153,704,448

NAV per share 10.39 10.38 9.12

Gearing ratio (net cash) 45.6% 42.2% 46.0%

• Post implementation of the Proposed Transactions, Transcend’s total property value will be R2.63bn

• Total interest bearing debt of R1.38bn will exist with an all-in weighted average debt cost of 9.1%. It is the intention to fix a minimum of 50% of the debt post implementation of the Proposed Transactions

• The LTV will be c. 46% and it is Transcend’s intention to reduce this to a market average of 30-40% post rolling out its pipeline

TRANSCEND RESIDENTIAL PROPERTY FUND 22 5. CONCLUSION

TRANSCEND RESIDENTIAL PROPERTY FUND 23 5.1 CONCLUSION AND TIMING

Opportunity to • Implementation of the Proposed Transactions will result in significantly enhanced scale; and double portfolio • Significant increase in market capitalisation size and migrate to Main Board of JSE − providing a solid platform to scale further and increase its shareholder base and liquidity

• IHS Asset Management performs the asset management function of Transcend Scalable portfolio • IHS currently manages R5.8bn in assets across 3 Funds & 1 JV and has made investments in 76 real estate projects with access to IHS − Currently operates a rental portfolio of approximately 9 138 units managed funds − Properties located in 5 provinces in SA − High quality property portfolio with critical mass at attractive yields in a challenging South African economy

• Provides investors with exposure to a geographically diverse, well-managed and well-maintained portfolio of properties that are well-located and good quality, which are expected to appreciate in value over time Transcend • Residential housing a unique defensive investment - potential to act as an inflation hedge over the long term, investment case returning real growth in distributions and outlook • Growth profile of underlying portfolio earnings attractive • Conservative outlook on balance sheet gearing to remain in place post the Proposed Transactions

• Transcend is seeking irrevocable funding commitments from investors for up to R308mil • Timing of calling on such commitments is expected by 10 December 2018

Deliverable Timing

Investors meetings 12 – 21 November 2018 Irrevocable commitments and Site visit 22 November 2018 timing Final CP Expected to be received by 30 November 2018 Equity commitments By 30 November 2018

Effective date Targeting 1 December 2018

Closing date and issue of new shares 1st week of Dec 2018

TRANSCEND RESIDENTIAL PROPERTY FUND 24 5.2 CONTACT DETAILS

Rob Wesselo 083 290 3868 [email protected]

Solly Mboweni 072 821 7261 [email protected]

Vanessa Perfect 079 496 9409 [email protected]

Myles Kritzinger 072 440 0072 [email protected]

Panico Theocharides 082 412 0542 [email protected]

Shaun Stewart 082 479 7147 [email protected]

Jacques Russouw 083 269 0310 [email protected]

TRANSCEND RESIDENTIAL PROPERTY FUND 25 ANNEXURES

TRANSCEND RESIDENTIAL PROPERTY FUND 26 1. TRANSCEND EXISTING PORTFOLIO

TRANSCEND RESIDENTIAL PROPERTY FUND 27 TRANSCEND PORTFOLIO – CURRENT

Johannesburg Cape Town

12 6

8 13 11 5 10 2 1

7 3

TRANSCEND RESIDENTIAL PROPERTY FUND 28 TRANSCEND PORTFOLIO – GAUTENG

1 67th on 7th (Edenvale, Gauteng)

Key facts Photographs

• 67 on 7th is located along Van Riebeeck Avenue, in Edenvale, Ekurhuleni, Gauteng • The site is well-located close to a central business district along Van Riebeeck Avenue, and easily accessible from major routes, specifically the N12 and N3 highways • All units are 2-bedroom, 1 bathroom and 55m2

Property valuation R97.5mil* Age of property 2.8 years Total # of units in complex 204 # of units owned by Transcend 157 Size 8,478m2 Historic occupancy rate 95.54%* Current occupancy rate 99.40%# Average lease term 16.3 months* Average gross rental per unit R5,942# Cap rate 8.25%*

* *As As per per the the 2017 2017 Annual Annual Integrated Integrated Report Report # As at 1 November 2018 TRANSCEND RESIDENTIAL PROPERTY FUND 29 TRANSCEND PORTFOLIO – GAUTENG

2 Ekhaya Fleurhof (Fleurhof, Gauteng)

Key facts Photographs

• The property is located on Main Reed Road in Fleurhof, Johannesburg, which has good access to the Joburg CBD, transit routes, and forms part of the Fleurhof development which is owned by Calgro M3

• Ekhaya Fleurhof consists of 162 units in 4-storey walk- up blocks. All units are 2-bedroom, 1 bathroom at an average size of 43m2

Property valuation R69.5mil* Age of property 5.8 years Total # of units in complex 162 # of units owned by Transcend 162 Size 6,642m2 Historic occupancy rate 98.15%* Current occupancy rate 99.00%# Average lease term 20.06 months* Average gross rental per unit R4,336# Cap rate 9.50%*

* *As As per per the the 2017 2017 Annual Annual Integrated Integrated Report Report # As at 1 November 2018 TRANSCEND RESIDENTIAL PROPERTY FUND 30 TRANSCEND PORTFOLIO – GAUTENG

3 Ekhaya Jabulani (Soweto, Gauteng)

Key facts Photographs

• The property is located in the CBD of Soweto, directly behind the Jabulani Mall, near to the Soweto theatre

• Ekhaya Jabulani consists of 243 residential units (of 4 storey walk-up), which are all 2-bedroom, 1 bathroom, of average size of 43m2

• The units were completed for occupation in February 2014

Property valuation R90.6mil* Age of property 4.8 years Total # of units in complex 244 # of units owned by Transcend 244 Size 10,004m2 Historic occupancy rate 94.67%* Current occupancy rate 98.77%# Average lease term 17.64 months* Average gross rental per unit R4,112# Cap rate 9.50%*

* *As As per per the the 2017 2017 Annual Annual Integrated Integrated Report Report # As at 1 November 2018 TRANSCEND RESIDENTIAL PROPERTY FUND 31 TRANSCEND PORTFOLIO – GAUTENG

4 Jackalberry Close (Boksburg, Gauteng)

Key facts Photographs

• Jackalberry Close is located in Jansen Park, Boksburg of the East Rand, and consists of a total of 252 residential units, of which Transcend owns 208 units. All units are 2-bedroom, 1 bathroom units, of 51.5m2 in 3 storey walk-ups

• The developer was Bluegate Properties, the same developer of Molware Estate. Construction began in May 2013 with occupation completed in mid April 2014

Property valuation R112.3mil* Age of property 4.6 years Total # of units in complex 252 # of units owned by Transcend 208 Size 10,713m2 Historic occupancy rate 86.06%* Current occupancy rate 97.54%# Average lease term 15.84 months* Average gross rental per unit R5,589# Cap rate 8.50%*

* *As As per per the the 2017 2017 Annual Annual Integrated Integrated Report Report # As at 1 November 2018 TRANSCEND RESIDENTIAL PROPERTY FUND 32 TRANSCEND PORTFOLIO – GAUTENG

5 Kensington Place (Randburg, Gauteng)

Key facts Photographs

• The property is located near the CBD of the Randburg suburb in Johannesburg, West of Sandton. A number of large employers are based in the area, including Multi Choice and Sasol. The area has a strong demand for quality rental stock

• Kensington Place consists of 56 residential units (4 storey walk-ups). All units are 2-bedroom, 1 bathroom units of 50m2

Property valuation R35.1mil* Age of property 6.6 years Total # of units in complex 56 # of units owned by Transcend 56 Size 2,376m2 Historic occupancy rate 96.43%* Current occupancy rate 93.65%# Average lease term 15.95 months* Average gross rental per unit R6,233# Cap rate 9.00%*

* *As As per per the the 2017 2017 Annual Annual Integrated Integrated Report Report # As at 1 November 2018 TRANSCEND RESIDENTIAL PROPERTY FUND 33 TRANSCEND PORTFOLIO – GAUTENG

6 Molware (Midrand, Gauteng)

Key facts Photographs

• The property is located between the central business district of Midrand and Centurion, off Samrand Road which allows for easy access to and from the N1 motorway

• Molware Estate consists of 252 residential units (3 storey walk-ups), all 2-bedroom, 1 bathroom, with an average size of 46m² and a crèche located adjacent to the site

Property valuation R138.5mil* Age of property 5.2 years Total # of units in complex 252 # of units owned by Transcend 252 Size 11,937m2 Historic occupancy rate 98.41%* Current occupancy rate 98.21%# Average lease term 18.9 months* Average gross rental per unit R5,542# Cap rate 8.50%*

* *As As per per the the 2017 2017 Annual Annual Integrated Integrated Report Report # As at 1 November 2018 TRANSCEND RESIDENTIAL PROPERTY FUND 34 TRANSCEND PORTFOLIO – GAUTENG

7 Village Seven Stone Arch Estate (Germiston, Gauteng)

Key facts Photographs

• Stone Arch Village 7 is located in Castleview, within the greater Stone Arch estate, which was developed by Cosmopolitan between 2011 to 2012

• The property consists of 114 units, which are all 2- bedroom, 1 bathroom units, of size of 54m2 in 3 storey walk-ups

Property valuation R55.1mil* Age of property 6.7 years Total # of units in complex 114 # of units owned by Transcend 114 Size 6,039m2 Historic occupancy rate 98.25%* Current occupancy rate 95.72%# Average lease term 22.39 months* Average gross rental per unit R5,414# Cap rate 8.25%*

* *As As per per the the 2017 2017 Annual Annual Integrated Integrated Report Report # As at 1 November 2018 TRANSCEND RESIDENTIAL PROPERTY FUND 35 TRANSCEND PORTFOLIO – GAUTENG

8 Terenure Estate (Kempton Park, Gauteng)

Key facts Photographs

• Terenure consists of 350 sectional title units, which is held 100% by Transcend. The units were developed by Cosmopolitan, the same developer as for Stone Arch

• There is a good mix of two bedrooms, one bath stack units and three bedrooms, 2-bathroom simplex units. There is a crèche, gate house, clubhouse with braai facilities, jungle gym and pool available

Property valuation R214.2mil* Age of property 6.1 years Total # of units in complex 350 # of units owned by Transcend 350 Size 22,028m2 Historic occupancy rate 92.86%* Current occupancy rate 95.61%# Average lease term 30.7 months* Average gross rental per unit R6,380# Cap rate 8.75%*

* *As As per per the the 2017 2017 Annual Annual Integrated Integrated Report Report # As at 1 November 2018 TRANSCEND RESIDENTIAL PROPERTY FUND 36 TRANSCEND PORTFOLIO – GAUTENG

9 Theresa Park Estate (Pretoria, Gauteng)

Key facts Photographs

• Theresa Park is located in Pretoria North, Gauteng

• Consists of 242 residential units (2 storey walk-ups) with an average size of 50m², both 1 bedroom, 1 bathroom and 2-bedroom, 1 bathroom units

Property valuation R98.0mil* Age of property 6.4 years Total # of units in complex 242 # of units owned by Transcend 242 Size 12,388m2 Historic occupancy rate 95.04%* Current occupancy rate 96.00%# Average lease term 23.79 months* Average gross rental per unit R4,346# Cap rate 8.50%*

* *As As per per the the 2017 2017 Annual Annual Integrated Integrated Report Report # As at 1 November 2018 TRANSCEND RESIDENTIAL PROPERTY FUND 37 TRANSCEND PORTFOLIO – GAUTENG

10 Tradewinds (Randburg, Gauteng)

Key facts Photographs

• The property is located near the central business district of the Randburg suburb in JHB, West of Sandton. A number of large employers are based in the area, including Multi Choice and Sasol

• Trade Winds consists of 85 residential units in a five storey building, with an average unit size of 43m². The property has a swimming pool, underground parking and a lift. All units are 1 bedroom, 1-bathroom units

Property valuation R46.0mil* Age of property 7.2 years Total # of units in complex 85 # of units owned by Transcend 85 Size 3,730m2 Historic occupancy rate 100.00%* Current occupancy rate 94.21%# Average lease term 16.49 months* Average gross rental per unit R6,119# Cap rate 9.00%*

* *As As per per the the 2017 2017 Annual Annual Integrated Integrated Report Report # As at 1 November 2018 TRANSCEND RESIDENTIAL PROPERTY FUND 38 TRANSCEND PORTFOLIO – WESTERN CAPE

11 Alpine Mews (Cape Town, Western Cape)

Key facts Photographs

• Alpine Mews is located in Eersterivier in Western Cape. The site is in a popular area for affordable rental and is well positioned within walking distance of a train station and other important amenities

• The property consists of 90 units, all of which are 2- bedroom, 1 bathroom units in 3 storey walk-ups. The property attracts tenants with features such as secure access control, parking for tenants and visitors, as well as an exclusive use playground

Property valuation R36.2mil* Age of property 5.5 years Total # of units in complex 90 # of units owned by Transcend 90 Size 4,005m2 Historic occupancy rate 98.89%* Current occupancy rate 90.00%# Average lease term 18.58 months* Average gross rental per unit R4,659# Cap rate 9.25%*

* *As As per per the the 2017 2017 Annual Annual Integrated Integrated Report Report # As at 1 November 2018 TRANSCEND RESIDENTIAL PROPERTY FUND 39 TRANSCEND PORTFOLIO – WESTERN CAPE

12 Parklands (Eersterivier, Western Cape)

Key facts Photographs

• Parklands is located in circa. 15km north/north east of Cape Town and consists of 187 units

• This property remains very popular and has historically performed well

Property valuation R98.1mil* Age of property 5.9 years Total # of units in complex 187 # of units owned by Transcend 187 Size 10,044m2 Historic occupancy rate 97.86%* Current occupancy rate 96.43%# Average lease term 32.17 months* Average gross rental per unit R6,029# Cap rate 9.00%*

* *As As per per the the 2017 2017 Annual Annual Integrated Integrated Report Report # As at 1 November 2018 TRANSCEND RESIDENTIAL PROPERTY FUND 40 TRANSCEND PORTFOLIO – WESTERN CAPE

13 Vanguard (Heideveld, Western Cape)

Key facts Photographs

• Vanguard consists of 60 two bedroomed, one-bathroom residential units of 44m2 each and located at 29 Jade Street, off Klipfontein Road, Heideveld, Cape Town

Property valuation R33.3mil# Age of property 3.3 years Total # of units in complex 60 # of units owned by Transcend 60 Size 6,640m2 Historic occupancy rate 97.00%* Current occupancy rate 100.00%# Average lease term 27 months# Average gross rental per unit R6,057# Cap rate 9.00%#

* *As As per per the the 2017 2017 Annual Annual Integrated Integrated Report Report # As at 1 November 2018 TRANSCEND RESIDENTIAL PROPERTY FUND 41 PORTFOLIO OVERVIEW

30 June 2018 Portfolio Highlights

GEOGRAPHIC PROFILE BY REVENUE (%) UNIT PROFILE (%)

Gauteng Western Cape Mpumalanga 2 Bed 1 Bath 1 Bed 1 Bath 2 Bed 2 Bath 3 Bed 2 Bath

3 16 6

2 11

72 89

LEASE EXPIRY PROFILE (%) AVERAGE MONTHLY PROPERTY EXPENSES (%)

Monthly Prior to 31.12.2018 Utilities Operational Admin Prior to 30.06.2019 Prior to 31.12.2019 Vacancy

10,5 28 14,2 36 0,1

56,6

18,6

TRANSCEND RESIDENTIAL PROPERTY FUND 42 PERFORMANCE OVERVIEW

12 months to 31 Dec 2017 6 months to 30 June 2018

NAV per share (Rand) NAV per share (Rand)

31 Dec 2017 10,39 30 Jun 2018 10,38

31 Dec 2016* 9,78 30 Jun 2017 9,93

LTV (%) LTV (%)

31 Dec 2017 42 30 Jun 2018 42

31 Dec 2016* 44 30 Jun 2017 43

Net cost-to-income ratio (%) Net cost-to-income ratio (%)

31 Dec 2017 32 30 Jun 2018 31

31 Dec 2016* 28 30 Jun 2017 30

DIVIDEND per share (cents) OCCUPANCY average DIVIDEND per share (cents) OCCUPANCY average 2017 ACTUAL 2018 ACTUAL 2017 ACTUAL 2018 ACTUAL 64.04 92.7% 30.10 88.9% / (94.9%)# 2016 ACTUAL 2016 ACTUAL 2017 ACTUAL 2017 ACTUAL 5.61* 96%* 29.81 95.9%

DISTRIBUTABLE INCOME EARNINGS per share (cents) DISTRIBUTABLE INCOME EARNINGS per share (cents) (Rm) 2017 ACTUAL (Rm) 2018 ACTUAL 2017 ACTUAL 2018 ACTUAL 102.5 32.89 42.5 20.3 2016 ACTUAL 2017 ACTUAL 2016 ACTUAL 2017 ACTUAL 51.7* 27.26 3.7* 19.8

* For the 6 months ended 31 December 2016 # Occupancy rate if Acacia Place (with vacancy rate of 11%) is excluded TRANSCEND RESIDENTIAL PROPERTY FUND 43 2. IHS RES 1 PROPERTIES, PROTEA GLEN & SILVERLEAF

TRANSCEND RESIDENTIAL PROPERTY FUND 44 IHS RES 1 PORTFOLIO, PROTEA GLEN AND SILVER LEAF

Gauteng Western Cape

2 8 1 4 5 6

TRANSCEND RESIDENTIAL PROPERTY FUND 45 IHS RES 1 PORTFOLIO – GAUTENG

1 Birchwood (Johannesburg, Gauteng)

Key facts Photographs

• Situated on Erf 92 Chartwell Extension 14 & Erf 93 Chartwell Extension 15, located at the corner of Cedar Road & 3rd Street, Chartwell, Johannesburg

• The complex comprises 360 units (consisting of 108 one-bedroomed units, 224 two-bedroomed units and 28 three-bedroomed units), with an average size of 73m² and monthly gross rentals ranging from R6,200 – R11,000 per unit

Property valuation R288mil# Age of property 2.25 years Total # of units in complex 360 # of units owned by Transcend 360 Size 26,232m2 Historic occupancy rate 55.00%* Current occupancy rate 82.00%# Average lease term 13.52 months# Average gross rental per unit R7,950$ Cap rate 9.71%^

# *As As at per 1 Novemberthe 2017 Annual 2018 Integrated^ ReportAt acquisition * Occupancy a result of lease up $ Forecasted 2019 gross rental TRANSCEND RESIDENTIAL PROPERTY FUND 46 IHS RES 1 PORTFOLIO – GAUTENG

2 Midrand Village (Midrand, Gauteng)

Key facts Photographs

• Situated on Erven 4472 to 4809 Clayville Extension 46, Porcelain Road, Clayville, Gauteng. Transcend is acquiring 225 units which vary from two-bedroomed units with one bathroom, measuring 55m² to three- bedroomed units with two bathrooms, measuring 80m²

• New lettings currently range from monthly gross rentals of R6,500 for the two-bedroomed units up to R7,900 for the three-bedroomed units

Property valuation R153mil# Age of property 5.33 years Total # of units in complex 305 # of units owned by Transcend 225 Size 14,280m2 Historic occupancy rate 89.00%* Current occupancy rate 97.00%# Average lease term 18.78 months# Average gross rental per unit R7,313$ Cap rate 8.99%^

# *As As at per 1 Novemberthe 2017 Annual 2018 Integrated^ At acquisition Report * Project was held for sale $ Forecasted 2019 gross rental TRANSCEND RESIDENTIAL PROPERTY FUND 47 IHS RES 1 PORTFOLIO – GAUTENG

3 Southgate Ridge (Midrand, Gauteng)

Key facts Photographs

• Situated on Erven 3030 and 3031 Naturena Extension 16, 5 Duin Place, Naturena, Gauteng. The complex comprises 412 units, all of them being two-bedroomed units with one bathroom, measuring approximately 53m². The units are accommodated in 62 two-storey blocks, all of which are north facing

• New lettings currently range from monthly gross rentals of R5,400 for first floor units to R5,600 for ground floor units

Property valuation R216mil# Age of property 5 years Total # of units in complex 412 # of units owned by Transcend 412 Size 21,972m2 Historic occupancy rate 98.04% Current occupancy rate 91.50%# Average lease term 16.59 months# Average gross rental per unit R5,874$ Cap rate 11.59%^

# *As As at per 1 Novemberthe 2017 Annual 2018 Integrated$ Forecasted Report 2019 gross rental ^ At acquisition TRANSCEND RESIDENTIAL PROPERTY FUND 48 IHS RES 1 PORTFOLIO – GAUTENG

4 Urban Ridge (East) (Midrand, Gauteng)

Key facts Photographs

• Situated on Erven Erf 1397 Halfway Gardens Extension 79, 77 Fifth Road, Midrand, Gauteng. The complex comprises 184 units, consisting of 170 two-bedroomed units with one bathroom and measuring approximately 53m² and 14 three bed-bedroomed units with two bathrooms measuring approximately 77m². The units are accommodated in 13 four-storey blocks • New lettings currently range from monthly gross rentals of R6,300 for the one-bedroomed units to R6,700 for the two-bedroomed units

Property valuation R110mil# Age of property 5.08 years Total # of units in complex 184 # of units owned by Transcend 184 Size 10,140m2 Historic occupancy rate 96.04% Current occupancy rate 91.00%# Average lease term 16.84 months# Average gross rental per unit R7,084$ Cap rate 10.52%^

# *As As at per 1 Novemberthe 2017 Annual 2018 Integrated$ Forecasted Report 2019 gross rental ^ At acquisition TRANSCEND RESIDENTIAL PROPERTY FUND 49 IHS RES 1 PORTFOLIO – GAUTENG

5 Urban Ridge (South) (Midrand, Gauteng)

Key facts Photographs

• Situated on Erf 1386 Halfway Gardens Extension 54, at the corner of Smuts and 3rd Road, Midrand, Gauteng. The complex comprises 232 units, all of them being two-bedroomed units with one bathroom, measuring approximately 54m². The units are accommodated in 8 four-storey blocks, all of them north facing

• New lettings currently range from monthly gross rentals of R6,300 for the upper floor units to R6,500 for the ground floor units

Property valuation R139mil# Age of property 3.92 years Total # of units in complex 232 # of units owned by Transcend 232 Size 12,472m2 Historic occupancy rate 96.66% Current occupancy rate 91.81%# Average lease term 17.19 months# Average gross rental per unit R6,642$ Cap rate 10.33%^

# *As As at per 1 Novemberthe 2017 Annual 2018 Integrated$ Forecasted Report 2019 gross rental ^ At acquisition TRANSCEND RESIDENTIAL PROPERTY FUND 50 IHS RES 1 PORTFOLIO – GAUTENG

6 Urban Ridge (West) (Midrand, Gauteng)

Key facts Photographs

• Situated on Erf 1399 Halfway Gardens Extension 35, 81 Fifth Road, Midrand, Gauteng. The complex comprises 260 units, all of them being two-bedroomed units with one bathroom, measuring approximately 57m². The units are accommodated in 4 four-storey blocks, all of them north facing

• New lettings currently range from monthly gross rentals of 6,100 for first floor units to R6,300 for ground floor units

Property valuation R153mil# Age of property 5.92 years Total # of units in complex 260 # of units owned by Transcend 260 Size 14,907m2 Historic occupancy rate 96.28% Current occupancy rate 91.92%# Average lease term 17.25 months# Average gross rental per unit R6,546$ Cap rate 10.69%^

# *As As at per 1 Novemberthe 2017 Annual 2018 Integrated$ Forecasted Report 2019 gross rental ^ At acquisition TRANSCEND RESIDENTIAL PROPERTY FUND 51 IHS RES 1 PORTFOLIO – WESTERN CAPE

7 De Velde (Somerset Wes, Western Cape)

Key facts Photographs

• Known as Sectional Schemes De-Velde 1, 2, 4 and 5, located on Portions 128, 131, 132 and 134 of the Farm 794 Stellenbosch RD, De Velde, Western Cape. The complex comprises 310 units varying from one- bedroomed units with one bathroom, measuring 38m² to three-bedroomed units with two bathrooms, measuring 104m² • New lettings currently range from monthly gross rentals of R6,600 for the one-bedroomed units up to R12,000 for the three-bedroomed units

Property valuation R139mil# Age of property 5.08 years Total # of units in complex 232 # of units owned by Transcend 232 Size 29,330,m2 Historic occupancy rate 88.00%* Current occupancy rate 94.00%# Average lease term 16.33 months# Average gross rental per unit R10,555$ Cap rate 8.19%^

# *As As at per 1 Novemberthe 2017 Annual 2018 Integrated ^Report At acquisition * Occupancy a result of lease up $ Forecasted 2019 gross rental TRANSCEND RESIDENTIAL PROPERTY FUND 52 IHS RES 1 PORTFOLIO – OTHER

8 Protea Glen (Midrand, Gauteng)

Key facts Photographs

• New lettings currently range from monthly gross rentals of 6,100 for first floor units to R6,300 for ground floor units

Property valuation R61mil# Age of property 10.1 years Total # of units in complex 176 # of units owned by Transcend 176 Size 8,480m2 Historic occupancy rate 94.08% Current occupancy rate 92.00%# Average lease term 29 months# Average gross rental per unit R4,675$ Cap rate 10.34%^

# *As As at per 1 Novemberthe 2017 Annual 2018 Integrated$ Forecasted Report 2019 gross rental ^ At acquisition TRANSCEND RESIDENTIAL PROPERTY FUND 53 IHS RES 1 PORTFOLIO – OTHER

9 Silverleaf (Pretoria, Gauteng)

Key facts Photographs

• The Property consists of 76 two bedroomed residential units located at 649 Krige Street, Silverton, Pretoria.

• The average rental income per unit is R5,900 per month

Property valuation R46mil# Age of property 9 months Total # of units in complex 76 # of units owned by Transcend 76 Size 5,364m2 Historic occupancy rate N/A Current occupancy rate 97.00%# Average lease term N/A# Average gross rental per unit R6,038$ Cap rate 9.87%^

# *As As at per 1 Novemberthe 2017 Annual 2018 Integrated$ Forecasted Report 2019 gross rental ^ At acquisition TRANSCEND RESIDENTIAL PROPERTY FUND 54 3. PORTFOLIO POST PROPOSED TRANSACTIONS

TRANSCEND RESIDENTIAL PROPERTY FUND 55 PORTFOLIO POST PROPOSED TRANSACTIONS

Weighted Total number Independent average rental Current Total number Total GLA Effective date No. Property name Physical address and province of units owned valuation per unit per Vacancy (% of of units (m2) of acquisition# by Transcend R’000 month units) (R/units)* Existing Portfolio 1 67 on 7th 67 Seventh Avenue Edenvale, Gauteng 204 157 8,478 97,500 1-Oct-16 6,452 0.60% 2 Alpine Mews 72 Forest Road Eersterivier, Western Cape 90 90 4,005 36,200 1-Oct-16 5,043 10.00% 3 Ekhaya Fleurhof 40 Salinga Crescent Fleurhof Ext 3, Gauteng 162 162 6,642 69,500 1-Oct-16 4,502 1.00% 2342 Dikgathlehong Street, Jabulani, 4 Ekhaya Jabulani 244 244 10,004 90,600 1-Oct-16 4,243 1.23% Gauteng 5 Jackalberry Close 23 Sydney Road, Jansen Park, Gauteng 252 208 10,713 112,300 1-Oct-16 5,702 2.46% 6 Kensington Place 26 Dover Street Ferndale, Gauteng 56 56 2,376 35,100 1-Oct-16 6,732 6.35% Corner Rietspruit Road and Morithi Street 7 Molware 252 252 11,937 138,500 1-Oct-16 5,652 1.79% Kosmosdal, Gauteng Along Southwark and Dartford Street 8 Parklands 187 187 10,044 98,100 1-Oct-16 6,502 3.57% Parklands, Western Cape Village Seven, Stone 9 19 Brookhill Road, Gauteng 114 114 6,039 55,100 1-Oct-16 5,526 4.28% Arch Village Corner Oranjerivier and Bergrivier Drive, 10 Terenure Estate 350 350 22,028 214,200 1-Oct-16 6,636 4.39% Terenure Ext 70, Gauteng 60 Burning Bush Street Theresa Park Ext 45, 11 Theresa Park Estates 242 242 12,388 98,000 1-Oct-16 4,540 4.00% Gauteng 12 Tradewinds 255 Kent Avenue Ferndale, Gauteng 85 85 3,730 46,040 1-Oct-16 6,313 5.79% 29 Jade Street, off Klipfontein Road, 13 Vanguard 60 60 2,640 33,300 22-Aug-18 6,730 0.00% Heideveld, Cape Town IHS Res 1 Portfolio Erven 4472 to 4812 Clayville Extension 46, 14 Midrand Village 225 225 14,280 153,300 1-Dec-18 7,313 3.00% Porcelain Road, Clayville, Gauteng Portions 128, 131, 132 and 134 of the Farm 15 De Velde 794 Stellenbosch RD, De Velde, Western 310 310 29,330 337,700 1-Dec-18 10,555 6.00% Cape North of Johannesburg in the suburb of 16 Birchwood Village 360 360 26,232 288,300 1-Dec-18 7,950 18.00% Chartwell, Gauteng Erven 3030 and 3031 Naturena Extension 17 Southgate Ridge 412 412 21,972 216,600 1-Dec-18 5,874 8.00% 16, 5 Duin Place, Naturena, Gauteng Erf 1399 Halfway Gardens Extension 35, 81 18 Urban Ridge (West) 260 260 14,907 153,100 1-Dec-18 6,546 8.00% Fifth Road, Midrand, Gauteng Erven Erf 1397 Halfway Gardens Extension 19 Urban Ridge (East) 184 184 10,140 109,600 1-Dec-18 7,084 9.00% 79, 77 Fifth Road, Midrand, Gauteng Erf 1386 Halfway Gardens Extension 54, at 20 Urban Ridge (South) the corner of Smuts & 3rd Road, Midrand, 232 232 12,472 138,800 1-Dec-18 6,642 8.00% Gauteng Other properties 21 Protea Glen Kganwe Street, Protea Glen, Soweto 176 176 8,480 61,290 1-Dec-18 4,675 8.00% Erf 2151 Silverton Township, City of 22 Silverleaf 76 76 5,364 46,800 1-Dec-18 6,038 3.00% Tshwane Total 4,533 4,442 254,201 2,629,930 6,406 5.99%

* Forecasted 2019 weighted average rental per unit per month. TRANSCEND RESIDENTIAL PROPERTY FUND 56 # Effective date of property acquired and implemented by Transcend. 4. TRANSCEND VS MSCI RESIDENTIAL BENCHMARK

TRANSCEND RESIDENTIAL PROPERTY FUND 57 TRANSCEND VS MSCI RESIDENTIAL BENCHMARK

Transcend’s income in Rand per m2 compared to Transcend’s return compared to MSCI SA Property MSCI Residential Benchmark# Index# 2017 – return (%) MSCI Transcend Relative to Rand / m2 / month Residential 15,00% Portfolio* Benchmark Benchmark* Basic rental 96.39 90.78 5.61 10,00% Fixed recoveries 0.00 2.67 (2.67) Gross rental 96.39 93.45 2.94 5,00% Variable recoveries 7.38 14.07 (6.69) 0,00% Total income 103.78 107.52 -3.74 Transcend Residential Retail Office Industrial Operating costs (21.02) (41.75) 20.73 Portfolio Net income^ 82.76 65.77 16.99 Income return Capital growth Average total return Total return * Income for year to December 2017

Costs per m2 – Affordable housing – Transcend vs MSCI Residential Benchmark 2017

7 6 5 4 3 2

Rand Rand sqm / month / 1

Security

Gardens

Cleaning

Electricity

Insurance

Bad debts Bad

costs

Building

costs

charges

cost)

R&M: aircon R&M:

ecalators

management

commissions

Letting fees & Letting

maintenance

Other operating Other

Other municipal Other

R&M: elevators / elevators R&M:

Service & & building Service

Tenant installation Tenant

Rates & taxes (ops & Rates taxes costs Management

Transcend Benchmark Ave cost per m2 - Transcend Ave cost per m2 - Benchmark

Source: MSCI Real Estate Portfolio Analysis Service – Transcend vs the MSCI Residential Benchmark TRANSCEND RESIDENTIAL PROPERTY FUND 58 5. IHS and MMA (Hunt)

TRANSCEND RESIDENTIAL PROPERTY FUND 59 THE ROLE OF IHS – IHS PM CREDIT VETTING

Qualifying Criteria

• Affordability Check: Rent must be at most 33% of tenant income (Earning R15,000 = Rent of R5,000) • No Listing on TPN: Check tenants payment behaviour, not just for listings • Pay slip: Verified • 3 Month Bank Statements: Check for spending patterns and affordability • Deposits: Single month’s deposit for rent & deposits for utilities (if applicable) • ID Documents: FICA • Strict rules: Specific approval required for co-signing of leases

If approved: Application Tenant to pay form completed TPN Credit 1 month and admin fee Check deposit and 1 paid by tenants month rent

TRANSCEND RESIDENTIAL PROPERTY FUND 60 THE ROLE OF IHS – CREDIT CONTROL

DATE ACTION TAKEN

21st Close – off

22nd – 23rd Weekend

24th – 28th Statements are printed and delivered by hand and e-mail

24th – 31st Credit controllers start calling/sms-ing and e-mailing tenants that have short paid

1st Rent is due

2nd - 7th TPN file upload once receipting is done (SMS please pay or thank you for the payment)

2nd Credit controllers will call/ e-mail daily

3rd Red letters placed on doors

5th 5th Debit order payers

6th - 8th Letters of Demand prepared and delivered to the tenant

Simultaneously second special action to commence (cancelling of tags)

7th TPN File upload, SMS (please pay or thank you for the payment)

Credit controllers request specific action to be taken and follow up daily

Credit controllers issue cancellation letters - tenant to vacate within 7days of receipt of the cancellation letter/notice to 7th vacate

TRANSCEND RESIDENTIAL PROPERTY FUND 61 MMA and HUNT

• 105,018 Multifamily housing units developed • Listed on NASDAQ • 7th largest Multifamily owner in the US • Invests primarily in debt that finances real assets • Largest owner of privatised Military Housing units in the US • MMAC leverages its extensive real estate and renewable energy • Investors in – and developers of – real estate assets experience to generate returns • Premier developer of master-planned communities • MMAC is externally managed by Hunt Investment Management • Invests equity in market rate housing developments across the US • Senior management team averages 23 years of experience in • Owner, manager and developer of mixed-use developments either the real estate or renewable energy business • Interests in the following subsidiaries: HUNT REAL ESTATE CAPITAL HUNT CAPITAL PARTNERS

In 2016, Hunt Real Estate Asset manager, funds manager, Capital originated $2.5 billion in and syndicator for the affordable loans, and to date has originated housing industry, using low Portfolio overview - MMAC’s investments, assets and liabilities more than $21 billion income housing tax credits are organized into three portfolios: MMA CAPITAL MANAGEMENT HUNT INVESTMENT • Leveraged Bonds MANAGEMENT − Portfolio of primarily tax-exempt mortgage revenue bonds Hunt subsidiary, MMAC (NASDAQ: MMAC), utilizes its Has more than $3.6 billion in • Energy Capital extensive real estate and assets under management in − Invest along side an institutional capital partner in sola ventures renewable energy experience to private real estate equity funds that finance the development and construction of renewable generate returns energy projects HUNT COMPANIES FINANCE TRUST • Other Assets and Liabilities HUNT FINANCIAL SECURITIES − Several debt and legacy balance sheet assets, including the A real estate investment trust Hunt Note, and additional real estate investments A financial services firm focused (“REIT”) focused on investing in, on serving the needs of financing and managing a institutional clients portfolio of residential mortgage- backed securities

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