Progress made in building out the Group’s fund and investment activities and strategic partnership with Blackstone

Strategic partnership with Blackstone Inc. (Blackstone) on the Group’s Pan-European Logistics (PEL) portfolio (PEL Portfolio) launching Burstone’s European funds and asset management strategy. The strategic partnership will look to further aggregate industrial and logistics properties across Burstone’s core European markets.

• Burstone retains 20% co-investment and asset management of portfolio

• €1,022 million headline price for PEL, representing a 5.6% net initial asset yield

• Significant reduction in Group loan-to-value (LTV) by 12.5% to circa 33.5%, providing headroom to support the Group’s strategic initiatives

• Look through gearing reduces from 58% to circa 41%

• Positive earnings impact in the short-term of 1.3% based on historic FY24 distributable earnings

• Enhanced impact in medium term as future impact of higher interest rates is negated through lower leverage

• Burstone will increase its dividend payout ratio from 75% to between 85% to 90% with effect from its interim reporting period i.e.1H25

• Significant benefits through operational leverage as platform is scaled

The Group is accelerating the expansion of its fund and investment management strategy across all regions in which it operates:

• Australia: The Irongate Group joint venture (Irongate JV) presents a new industrial joint venture backed by a leading global alternative asset management firm, increasing Irongate’s equity assets under management (AUM) from A$490 million to circa A$600 million post implementation of initial acquisitions :

  • An initial soft commitment of A$200 million of equity has been earmarked with the aim to upsize upon successful deployment

  • Burstone will have a minority co-investment (alongside Irongate) in the new joint venture and the Irongate JV will provide the investment and asset management functions

  • Initial portfolio of industrial and logistics assets located in Queensland - total purchase consideration of circa A$140 million and equity commitment from the new joint venture of circa A$80 million

• Europe: Burstone is currently in exclusive negotiations with regards to a 25% co-investment and ongoing management of €170 million in respect of a German light industrial and last mile logistics platform. This is expected to be earnings accretive if concluded in Q3 and to replicate a successful light industrial track record

• South Africa: Burstone is in exclusive negotiations with cornerstone investors to build its “SA Core plus platform”. This will utilise a portion of South African assets to seed the platform

Post the successful implementation of the abovementioned transactions, Burstone’s total gross asset value (GAV) will be circa R42 billion with 54% third party AUM. Third party AUM increases almost 5x from R4.7 billion to circa R23.0 billion

Expanding the Group’s fund and investment management model offers multiple benefits for Burstone, particularly the ability to achieve enhanced integrated real estate returns. This approach combines traditional real estate asset yields with additional upside from operating a funds, investment, and asset management model, where the Group can earn management, leasing, and acquisition fees, as well as potentially generate performance fees through outperformance.

This hybrid model of traditional real estate investment, stapled with expertise across fund management, investment management, asset management and development management support the Group’s strategy of delivering enhanced returns on capital deployed and maximising operational leverage from its scalable platform