Umlazi Mega City, KwaZulu Natal

A n n u a l R e p o r t 2 0 0 6

Umlazi Mega City, KwaZulu Natal

A n n u a l R e p o r t 2 0 0 6 1

Tygerberg Business Park, Western Cape

Contents

PageExecutive summary 2 - 3Structure of the Fund 4Distribution plan dates 5Directorate and administration 6 - 8Directors’ responsibility for and approval of the annual financial statements 9Report of the trustee 9Declaration by secretary 9Independent auditors’ report 10Management company’s review 11 - 27

SA Corporate Real Estate Fund

Balance sheets 28Income statements 29Statements of changes in unitholders’ funds 30Cash flow statements 31Statutory information and notes to the annual financial statements 32 - 45

Property portfolio and investment in fixed property companies 46 - 55

SA Corporate Real Estate Fund Managers Limited

Independent auditors’ report 56Directors’ report 57 - 58Balance sheet 59Income statement 60Statement of changes in equity 61Cash flow statement 61Statutory information and notes 62 - 66

Unitholders’ information

Notice of annual general meeting 67 - 68Proxy form 69 - 70

This report together with additional information on the property portfolio is available at: www.sacorp.co.za

(Formerly Martprop Property Fund)

2

CORPORATE STRUCTURE

• SA Corporate Real Estate Fund (SA Corporate) (formerly Martprop Property Fund) is a collective investment scheme in propertyregistered in terms of the Collective Investment Schemes Control Act, No. 45 of 2002.

• The Fund is listed on the JSE Securities Exchange South Africa (the JSE) under Real Estate Investment Trusts (REITs).(Share code: SAC, ISIN code: ZAE 000083614)

• SA Corporate is managed by SA Corporate Real Estate Fund Managers Limited (formerly Marriott Property Fund Managers Limited), a company approved by the Registrar of Collective Investment Schemes to manage the Fund.

• In terms of the Collective Investment Schemes Control Act, No. 45 of 2002 the Fund is obliged to distribute to its unitholders all net revenue profit earned and received. As a result of its distribution obligations, no income tax is generally payable by the Fund.

VISION, STRATEGY AND PROSPECTS

• SA Corporate’s vision is to be the premier real estate investment fund listed on the JSE and a market leader in terms of investment rating and earnings growth.

• SA Corporate’s strategy is:

• To improve profile and investor communication so as to position the Fund to attract significant domestic and internationalinvestment capital.

• To expand the real estate portfolio to R10 billion in the medium term and to grow the market capitalisation so as to be placed amongst the largest three counters in the sector. In so doing, to align the portfolio more closely with the InvestmentProperty Databank (IPD) sectoral benchmark.

• To deliver sustainable earnings growth so as to achieve top quartile total returns in the short, medium and long term.

• To address the requirements of the Property Charter and Final Codes of Good Practice in terms of Black Economic Empowerment so as to maximise benefits for the Fund and investors.

• The prospects for sustained income growth in the future are good and unitholders can expect that this will impact favourably on the Fund’s unit price in the short term.

Executive Summary

No 3 The Terrace, Westway Office Park,KwaZulu Natal

A n n u a l R e p o r t 2 0 0 6 3


GROUP FINANCIAL HIGHLIGHTS AND SALIENT FEATURES

GROUP17 months to 12 months to

31 December 2006 31 July 2005 (Restated)

Distributions (cents per unit) 38,00 25,50Headline earnings (cents per unit) 39,23 25,50 Portfolio valuation analysis

Net asset value (cents per unit - including finaldistribution yet to be paid) 340 258Listed market price (cents per unit) 340 291Premium to net asset value 0% 13%Listed market price at 12 March 2007 (cents per unit) 406

Capital and funding resources (Rm)

Capital cash available 0,2 33,5Capital commitments (140,9) (383,0)Expected net proceeds from sale of properties 76,4 34,1Debt funding capacity available 278,3 433,0

Units in issue 725 183 772 725 183 772Market capitalisation at end of period (Rm) 2 466 2 110Long term borrowings before prepayment of net rentals (Rm) 699,3 197,5Long term borrowings to investment property at valuation (%) 23% 10%Sectoral portfolio (by market value)

- Industrial 61% 65%- Office 12% 8%- Retail 27% 27%

Geographic portfolio (by market value)- KwaZulu Natal 50% 55%- Gauteng 39% 35%- Western Cape 11% 10%

Property acquisitions (Rm) 405,6 187,5Developments (Rm) 164,6 44,6Disposals (Rm) 70,0 106,2Number of properties 133 127Market value of property (Rm) 3 103 1 961Average vacancy factor (based on rentable area) 1% 2%

4

Structure Of The Fund

UNITHOLDERSEffective ownership in property portfolio

FIXED PROPERTY COMPANIES/PROPERTIES133 Properties: 94 industrial, 25 commercial and 14 retail (19 properties held via 18 trading companies)

SA CORPORATE REAL ESTATE FUND725 183 772 units listed on the JSE Limited

Shareholdersof Management Company

Marriott Property Services (Pty) Ltd,a wholly owned subsidiary ofOld Mutual Property Group

(Pty) Ltd* (95%)

Durban Pension Fund (5%)

Marriott Property Services (Pty) Ltd

Company Secretary

Management Regulatory Bodies

JSE Limited

Ensures compliance with JSE regulations;provides market for trading of units

Registrar of Collective Investment Schemes

Ensures compliance with Collective Investment SchemesControl Act, No. 45 of 2002; monitors operation of

the property trust

Trustee: ABSA Bank Ltd

Protects unitholders' interests; actsas custodian of Fund's assets and

securities; ensures compliance with trust deed

Auditors:Deloitte & Touche

PKF Durban

Report fairpresentation of financial position and results

SA Corporate Real EstateFund Managers Ltd

Manages the Fund and its assets;reports to unitholders

Old Mutual Property Group (Pty) Ltd

Property asset manager, propertymanager and consultant

* Trading as Old Mutual Investment Group (SA) - Property Investments (OMIG(SA)-PI)

A n n u a l R e p o r t 2 0 0 6 5

Distribution Plan Datesfor the financial year ending 31 December 2007


1st half to 30 June 2007 24/08/2007 14/09/2007 17/09/2007 21/09/2007 25/09/20072nd half to 31 Dec 2007 22/02/2008 13/03/2008 14/03/2008 20/03/2008 24/03/2008

Income distributionperiod

Distributionannouncement

Last date totrade cum-distribution

Units will tradeex-distribution

Record dateto participate

in thedistribution

Payment ofdistribution

Tokai Junction, Tokai, Western Cape

6

Directorate And AdministrationDirectors of SA Corporate Real Estate Fund Managers Limited (Registration No: 1994/009895/06)

Benjamin Monaheng Kodisang Craig John Ewin

Ian Michael Groves Ipeleng Nonkululeko MkhariKenneth John Forbes Roger Rundle Perkin

Ebrahim Suleman Seedat Lauren Carole Tapping Malcolm Ivan Wyndham

Colin Stephen Young Michael James Reading Anderson

A n n u a l R e p o r t 2 0 0 6 7


Benjamin Monaheng Kodisang CA(SA) (36 years)(Date appointed 7 July 2006)South AfricanChairman, non-executive director (non-independent)*o

Ben was appointed Managing Director of Old Mutual PropertyGroup (Pty) Ltd in 2005. He is also a director of, inter-alia: OldMutual Properties (Namibia) (Pty) Ltd, Old Mutual Properties (UK)Ltd and Lifestyle Communications (Pty) Ltd and is a member ofthe Securities Regulation Panel.

Craig John Ewin CA(SA) (46 years)South AfricanExecutive director #*

Craig has 17 years property experience with particular emphasison the listed property sector. He is currently the Head of ListedReal Estate: Old Mutual Investment Group (SA) - PropertyInvestments and is a director of, inter alia: Oryx ManagementServices (Pty) Ltd, SA Retail Properties Ltd and an alternatedirector of Oryx Properties Ltd and is a past Chairman of theAssociation of Property Unit Trust Management Companies.

Kenneth John Forbes CA(SA) (57 years)South AfricanNon-executive director (independent)

Ken has over 22 years experience in the township developmentbusiness, mostly in the industrial, commercial and retail sectors.He is currently The Resorts Development director of MorelandDevelopments (Pty) Ltd.

Ian Michael Groves CA(SA) (61 years)South AfricanNon-executive director (independent)Chairman of the Risk, Audit & Compliance Committee#

Mike has over 34 years business experience in the shippingindustry. He is a director of, inter alia: Grindrod Ltd, GrindrodBank Ltd, Tiger Wheels Ltd, Tiger Automotive Ltd and Value GroupLtd and is the past Chief Executive Officer of Grindrod Ltd.

Ipeleng Nonkululeko Mkhari B.A. Soc. Science (32 years)South AfricanNon-executive director (independent)

Ipeleng has 9 years marketing experience with the MotsengInvestment Holdings Group. She is the Co-founder and ChiefInvestment Officer of Motseng Investment Holdings and FoundedPhosa Iliso CCTV in 1998. She is also a director of, inter alia: KapInternational and Ambit Properties Ltd.

Roger Rundle Perkin B.A. LLB (42 years)South AfricanManaging Director (Executive)*

Roger is a qualified attorney and has 13 years of diverse propertyexperience and is a director of the underlying SA Corporate fixedproperty companies. He is a past Chairman of the Association ofProperty Unit Trust Management Companies.

Ebrahim Suleman Seedat F.I.M.F.O. CA(SA) (55 years)South AfricanNon-executive director (independent)#

Ebrahim has extensive local government experience. The last 11years have been in property with particular emphasis on the listedproperty sector. He is currently the finance manager (Investments)of Ethekwini Municipality.

Lauren Carole Tapping CA(SA) (36 years)South AfricanExecutive director

Lauren has over 12 years property experience with particularemphasis on the listed property sector. She is also a director of,inter alia: Oryx Management Services (Pty) Ltd, Oryx PropertiesLtd and Marriott Property Services (Pty) Ltd.

Malcolm Ivan Wyndham (65 years)South AfricanNon-executive director (independent)o

Malcolm retired from Grinaker-LTA Construction Limited after 35years of service. He served on the executive board of the holdingcompany with responsibilities for property administration anddevelopment and was the Managing Director of the KwaZulu Nataloperation for some 16 years and had overall responsibility forSelborne Park Estate.

Colin Stephen Young CA(SA) MBA (Cum Laude) (39 years)(Date appointed 7 July 2006)South AfricanNon-executive director (non-independent)*

Colin has been involved in listed property fund management since2002 and currently holds the position of Head of InstitutionalProperty: Old Mutual Investment Group (SA) - PropertyInvestments. He is registered with the FSB as an AuthorisedRepresentative.

# member Risk, Audit and Compliance Committee* member Investment Committeeo member Nomination and Remuneration Committee

8

Directorate And Administration (continued)

Alternate director

Michael James Reading Anderson CA(SA) (39 years)(Date appointed 7 July 2006)(Alt. to B M Kodisang and C S Young)South AfricanNon-executive director (non-independent)

Michael is currently the Chief Financial Officer of Old MutualInvestment Group (South Africa) (Pty) Ltd having worked 5 yearsas Chief Financial Officer for Old Mutual Property Group (Pty) Ltdand 5 years as Financial Controller for Ogilvy & Mather Europe,owned by London listed WPP Group Plc.

Administration

PROPERTY ASSET MANAGER, PROPERTY MANAGERAND CONSULTANT

Old Mutual Property Group (Pty) LtdMarriott at KingsmeadKingsmead Office ParkDurban, 4001PO Box 207, Durban, 4000

COMPANY SECRETARY (REGISTERED OFFICE)

Marriott Property Services (Pty) LtdMarriott at KingsmeadKingsmead Office ParkDurban, 4001PO Box 207, Durban, 4000E-mail: [email protected]

AUDITORS

Deloitte & Touche2 Pencarrow CrescentPencarrow ParkLa Lucia Ridge Office EstateLa Lucia, 4051PO Box 243, Durban, 4000

PKF Durban12 on Palm BoulevardGateway, 4319PO Box 1858, Durban, 4000

TRUSTEES

ABSA Bank LtdFlora Park Office1st Floor, Block ECorner of Ontdekkers and Conrad RoadsFlorida, 1709PO Box 1132,Johannesburg, 2000

TRANSFER SECRETARIES

Computershare Investor Services 2004 (Pty) LtdGround Floor, 70 Marshall StreetJohannesburg, 2001PO Box 61051,Marshalltown, 2107

INVESTMENT BANK AND SPONSORS

Nedbank Capital, a division of Nedbank Ltd3rd Floor, Corporate Place, Nedbank Sandton135 Rivonia RoadSandton, 2196PO Box 1144,Johannesburg, 2000

BANKERS

First National Bank, a division of FirstRand Bank LtdCorporate Account Services – Durban8 Rydall Vale ParkDouglas Saunders DriveLa Lucia Ridge, 4051PO Box 4130, The Square, Umhlanga Rocks, 4320

A n n u a l R e p o r t 2 0 0 6 9


Directors’ Responsibility For And Approval OfThe Annual Financial Statements

The directors of SA Corporate Real Estate Fund Managers Limitedare responsible for the preparation and integrity of the annualfinancial statements and the related information included in theannual report. In order for the board to discharge its responsibilities,management has developed and continues to maintain a systemof internal control. The board has ultimate responsibility for thesystem of internal controls and reviews its operation, primarilythrough the risk, audit and compliance committee.

The internal controls include a risk-based system of internalaccounting and administrative controls designed to providereasonable but not absolute assurance that the assets aresafeguarded and that transactions are executed and recorded inaccordance with generally accepted business practices and theGroup's policies and procedures. These controls are implementedby trained, skilled personnel with appropriate segregation ofduties, are monitored by management and the risk, audit andcompliance committee and include a comprehensive budgetingand reporting system operating within an appropriate controlframework.

The external auditors are responsible for reporting on the annualfinancial statements, and their unmodified opinion is included onpage 10. The annual financial statements are prepared in accordancewith International Financial Reporting Standards and in the mannerrequired by the Companies Act, No. 61 of 1973 and the CollectiveInvestment Schemes Control Act, No. 45 of 2002, and incorporatedisclosures in line with the accounting philosophy of the Group.They are based on appropriate accounting policies consistentlyapplied, except where otherwise stated, and are supported byreasonable judgements and estimates.

The directors believe that the Fund will be a going concern in theyear ahead. Accordingly, in preparing the annual financialstatements, the going concern basis has been adopted.

The annual financial statements for the seventeen months ended31 December 2006 as set out on pages 28 to 45 were approvedby the board of directors on 12 March 2007 and are signed onits behalf by:

BM KodisangChairman12 March 2007

Report Of The Trustee

For the year ended 31 December 2006In terms of Section 70(1)(f) of the Collective Investment SchemesControl Act of 2002.

To The Unitholders Of SA Corporate Real Estate Fund

During the period as set out above during which the CollectiveInvestment Schemes Control Act of 2002 has been in effect thetrust has been administered in accordance with:

i) The limitation imposed on the investment and borrowing powers of the Manager by the Act, andii) The provisions of the Act and the deed.

ABSA Bank LimitedTrusteeJohannesburg29 January 2007

Declaration By Secretary

Marriott Property Services (Pty) Ltd, in its capacity as CompanySecretary of SA Corporate Real Estate Fund Managers Limited,hereby certifies that the Company has lodged with the Registrarof Companies all such returns as are required of a public company,in terms of section 268G(d) of the Companies Act, No. 61 of 1973,as amended, and that all such returns are true, correct and upto date.

Marriott Property Services (Proprietary) LimitedCompany Secretary12 March 2007

IM GrovesChairman– risk, audit and compliance committee12 March 2007

10

Independent Auditors’ ReportTo The Unitholders Of SA Corporate Real Estate Fund

Report on the Financial StatementsWe have audited the annual financial statements and Group annual financial statements of SA Corporate Real Estate Fund, whichcomprise the balance sheet and the consolidated balance sheet as at 31 December 2006, the income statement and the consolidatedincome statement, the statement of changes in unitholders’ funds and the consolidated statement of changes in unitholders' fundsand the cash flow statement and the consolidated cash flow statement for the 17 months then ended, a summary of significantaccounting policies and other explanatory notes, as set out on pages 28 to 45.

Directors' Responsibility for the Financial StatementsThe directors of SA Corporate Real Estate Fund Managers Limited are responsible for the preparation and fair presentation of thesefinancial statements in accordance with International Financial Reporting Standards, and in the manner required by the CollectiveInvestment Schemes Control Act, No. 45 of 2002. This responsibility includes: designing, implementing and maintaining internal controlrelevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due tofraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in thecircumstances.

Auditors' ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordancewith International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. Theprocedures selected depend on the auditors' judgement, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to theentity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by thedirectors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements present fairly, in all material respects, the financial position of SA Corporate Real Estate Fundand the Group as at 31 December 2006, and of their financial performance and their cash flows for the 17 months then ended inaccordance with International Financial Reporting Standards and in the manner required by the Collective Investment Schemes ControlAct, No. 45 of 2002.

Deloitte & ToucheRegistered Auditors

Per GD KrugerPartner16 March 2007

2 Pencarrow CrescentLa Lucia Ridge Office EstateDurban

National Executive: GG Gelink - Chief Executive, AE Swiegers - Chief Operating Officer, GM Pinnock - Audit, DL Kenney - Tax, L Geeingh - Consulting, MG Crisp - Financial Advisory, L Bam - Strategy,CR Beukman - Finance, TJ Brown - Clients & Markets, SJC Sibisi - Public Sector and Corporate Social Responsibility, NTMtubu - Chairman of the Board, J Rhynes - Deputy Chairmanof the Board

Regional Leader: GC Brazier

PKF DurbanRegistered Auditors

Per GJ AdendorffPartner16 March 2007

2nd Floor12 on Palm BoulevardGateway

GJ Adendorff, RC Alcock, RC Boulle, KJ Dall, PJDuncan, PS Gering, K Gertenbach, RJ Kelly, NMcHardy, GJ Nijhuis, AE Paruk, D Puran, MSchroeder

A n n u a l R e p o r t 2 0 0 6 11


Management Company’s Reviewfor the seventeen months ended 31 December 2006

Chairman's report

During the financial period Martprop Property Fund underwent a name change to SA Corporate Real Estate Fund, as well as changesto the composition of the Board. Messrs Ben Kodisang and Colin Young and their alternate, Michael Anderson were appointed asdirectors, with the resignation of Messrs Tony Ardington and Mick Hyatt and their alternate, Mike Mun-Gavin. The Board would liketo acknowledge the fundamental role that the outgoing directors played in the listing and ongoing management of the Fund and ourcollective thanks are extended to them for their valued contributions over many years. Subsequent to the period end, both Craig Ewinand Lauren Tapping were appointed as executive directors of the Board.

VISION OF SA CORPORATE

At the same time as the name change SA Corporate established as its vision, “to be the premier real estate investment fund listedon the JSE and a market leader in terms of investment rating and earnings growth”.

Behind this vision are four specific strategic objectives:

• Earnings - To deliver sustainable earnings growth so as to achieve top quartile total returns in the short, medium and long term• Expansion - To expand the real estate portfolio to R10bn in the medium term and grow the market capitalisation so as to be

placed amongst the three largest counters in the sector. To align the portfolio more closely with the Investment Property Databank(IPD) sectoral benchmark

• Profile - To improve profile and investor communication so as to position the Fund to attract significant domestic and internationalinvestment capital

• Broad Based Black Economic Empowerment - To address the requirements of the Property Charter and the Final Codes of GoodPractice so as to maximise benefits for the Fund and investors

HIGHLIGHTS

In terms of earnings, SA Corporate showed a significant improvement in distributions in the final distribution for the five-month periodto 31 December 2006. The negative rental reversions which affected the first 2 distributions of the period have been cleared throughthe system and distributions were up 18% on the comparable 5 month period.

SA Corporate has made an offer to the unitholders of SA Retail Properties Limited (SA Retail), a listed property loan stock companywith a market capitalisation of over R2.5 billion. Further, SA Retail is acquiring an additional R1 billion property portfolio. SA Corporate'smarket capitalisation will be close to R7 billion once these deals are finalised, and this will establish the Fund as the third largestcounter in the South African listed real estate sector. This will bring the advantages of enhanced liquidity, diversification, cost economiesand investment demand. In addition, it will improve the geographic and sectoral composition of the SA Corporate portfolio with greateralignment to IPD benchmarks.

In addition, a Black Economic Empowerment deal has been concluded whereby, upon the successful acquisition of SA Retail, theWipken Trust, an equal partnership between Women Investment Portfolio Holdings Ltd (Wiphold) and Kensani Properties (Pty) Ltd(Kensani) will own an 11% BEE holding in SA Corporate.

Subsequent to SA Corporate’s year-end and following the announcement of the above transactions, SA Corporate’s unit price hasseen meaningful appreciation to 406 cents per unit, an increase of 19%.

THE SOUTH AFRICAN LISTED REAL ESTATE SECTOR

Globally real estate has performed well with the allocation to real estate increasing, and yield compression boosting investment returns.The “Global Search for Income” continues with the baby boomers retiring and an ageing worldwide population requiring post retirementincome from their investments. The competition for income yield and the mobility of investment capital has meant greater cross borderactivity with the USA and Europe looking to the emerging markets for investments.

The South African listed real estate sector has grown from a market capitalisation of R5 billion in 1991 and R7 billion in 2001 toR90 billion now. Performance over the last few years has been exceptional as the table below shows:

12

Listed real estate has outperformed both bonds and equities over a three-year time line. Within the international context South Africanreal estate has performed extremely well. In Ernst & Young’s Global REIT report to June 2006, South African REITs (PUTs) showedthe best performance in terms of total rate of return over 3 years (34%) and also performed strongly over the last year (ranked 2nd

with a total return of 23%). IPD statistics for 2005 showed that the property universe produced a total return of 29%, and listed fundsan excellent total return of 34%.

THE SOUTH AFRICAN ECONOMY

South African real estate is positioned well for strong distribution growth in the short to medium term. Economic growth for 2006was robust at 4,9% and the Minister of Finance, Trevor Manuel, in his 2007 Budget speech, predicted strong growth of averagingjust over 5% a year for the next three years. In addition, inflation has remained within the target band at 4,6% for 2006, and isexpected to remain in the target range of 3 to 6% in the medium term.

The fundamentals affecting real estate performance are strong, with business confidence high, corporate fundamentals strong andsustainable and the interest rate outlook improving. Space shortages and increasing land and building costs position the sector forstrong rental growth. The construction activity ahead of the 2010 FIFA World Cup will be positive for the real estate sector.

The South African listed real estate sector is entering a phase of corporate activity and consolidation, a period where good managementand value extraction are of paramount importance.

Estimated growth in distributions in the region of 10% for 2007 makes the sector's forward yields attractive.

SA CORPORATE PROSPECTS

With negative rental reversions a thing of the past, a strong and focused management team, and good property fundamentals, SACorporate looks forward to property returns in line with the rest of the sector. The effects of the acquisition of SA Retail on incomereturns will be detailed in the circular to be distributed in March 2007. SA Corporate’s unit price has already seen meaningful appreciationfollowing the announcements relating to the SA Retail acquisition and accordingly capital returns for 2007 are expected to be strong.

Executive Report

INTRODUCTION

Following the acquisition of the Marriott Group’s majority interest in the Fund’s management company by the Old Mutual Group inthe first half of 2006, the Fund has initiated and implemented a number of strategic changes in line with the objectives referred toin the Chairman’s Report. The specific activities in this regard are dealt with in more detail in this review.

The investment by Old Mutual in the management company signals a clear intent by Old Mutual to expand its influence in the SouthAfrican real estate market to include a strong presence in the listed real estate sector. These intentions have been realised in a numberof key areas and the Fund has already seen some of the benefits that Old Mutual brings as a shareholder in the management company.Unitholders can expect to benefit accordingly in coming years.

The change of name to SA Corporate Real Estate Fund brings a clearer alignment with the Fund’s objectives of building a premierquality portfolio of investment grade properties which are leased to the major corporates driving the South African economy. As partof the Fund’s strategy to increase it’s foreign investor base, the internationally accepted terminology of real estate has been assumed,confirmed by the fact that PUT’s are classified as Real Estate Investment Trusts by both local and foreign indices.

With the change of SA Corporate’s financial year-end from July to December, the financial results reported on are in respect of theseventeen month period ended 31 December 2006.

2006 2005 2004 3 year average

SA listed real estate (J253) 28.4% 50.0% 41.3% 39.9%

Bonds (ALBI) 5.5% 10.8% 15.2% 10.5%

Equities (ALSI) 41.2% 47.3% 25.4% 38.0% Source: INET

Management Company’s Review (continued)

for the seventeen months ended 31 December 2006

A n n u a l R e p o r t 2 0 0 6 13


FINANCIAL RESULTS

SA Corporate's distributable earnings for the financial period amounted to R275,6 million or 38,0 cents per unit. The comparison ofthe total distribution with prior periods is rendered impractical due to the change in year end, but on the basis that the distributionis annualised to a twelve month payment, it amounts to a 5% increase on the total distribution paid for the twelve months endedJuly 2005.

An analysis of the three distributions in the seventeen months clearly demonstrates the improved earnings cycle that the Fund hasentered and indicates that the recovery in the performance of the unit price is well substantiated. The second distribution of 13,5cents per unit for the six months to 31 July 2006 was an 8% improvement on that of the first six months and the final distributionof 12,0 cents per unit for the last five months, when grossed up to six months, was a further 6,7% increase on the second interim.More significantly, the 12,0 cents declared for the five months to December 2006 was 18% higher than that for the correspondingfive months in 2005.

SA Corporate's unit price appreciated from 291 cents per unit at 31 July 2005 to 340 cents per unit at 31 December 2006. The unitprice has since increased substantially post year-end, following the announcement of the final distribution and as a consequence ofan offer the Fund has made to acquire SA Retail Limited, details of which are given later in this report. On 12 March 2007, the priceclosed at 406 cents per unit.

The results are set out in a summarised form below:

Including straight line Excluding straight line rental adjustment rental adjustment Seventeen Twelve Seventeen Twelve

months to months to months to months to31/12/2006 31/07/2005 31/12/2006 31/07/2005

R000 R000 R000 R000Restated Restated

Net property income 353 002 205 051 344 887 203 495

Interest received 6 900 4 440 6 900 4 440

Interest paid (50 127) (15 805) (50 127) (15 805)

Surplus on revaluation of interest rate swap derivative 1 602 514 1 602 514

Fund expenses (26 413) (9 242) (26 413) (9 242)

Deferred taxation on straight line rental adjustment (496) (57) - -

Headline earnings 284 468 184 901 276 849 183 402

Capital (deficit)/surplus on disposal of investment properties (2 091) 1 154 (2 091) 1 154

Write-up on revaluation of investment properties net of taxation 593 555 358 653 601 174 360 152

Net profit 875 932 544 708 875 932 544 708

Units in issue (000) 725 184 725 184 725 184 725 184

Net distributable income (cents per unit) 38,00 25,50 38,00 25,50

Headline earnings per unit (cents per unit) 39,23 25,50 38,18 25,29

Net profit (cents per unit) 120,79 75,11 120,79 75,11

Distribution per unit (cents)

No. 22 declared 23/2/06 (No. 20, 1/3/05) 12,50 12,50 12,50 12,50

No. 23 declared 24/8/06 (No. 21, 30/7/05) 13,50 13,00 13,50 13,00

No. 24 declared 20 December 2006 12,00 - 12,00 -

38,00 25,50 38,00 25,50

14

PORTFOLIO ACTIVITY

As anticipated by management, the disposal of underperforming properties has slowed appreciably in the last year, compared to thelast three years, and the process has given rise to a portfolio which is now well positioned to generate sustainable rental growth. Anumber of sales were effected at an average selling price of R5 million. The bulk of these disposals comprised small industrial properties,which no longer met the Fund’s investment and growth criteria, together with some office properties which are located in secondarynodes and which attracted limited tenant interest. The details of the disposals in the seventeen month period are contained in thefollowing table:

248364711455

126

68

62 Harden Avenue, Umhlatuzana, KZN12 Patrick Road, Jet Park, Gauteng309 15th Road, Randjespark, Gauteng20 Harden Avenue, Umhlatuzana, KZN449 Sydney Road, Durban, KZN437 Sydney Road, Durban, KZN9 Summit Road, Dunkeld West, Gauteng287 Berg Street, Pietermaritzburg, KZN310 Berg Street, Pietermaritzburg, KZN280 Kent Avenue, Randburg, GautengKruisfontein Road, Cape Town, Western Cape13 Eton Road, Parktown, GautengBlauwberg & Koeberg Road, Cape Town, Western CapeMilan Street, Cape Town, Western Cape

IndustrialIndustrialIndustrialIndustrialIndustrialIndustrialOfficeIndustrialIndustrialOfficeRetailCommercialIndustrialIndustrial

Total

Address Disposal price(Rm)

Sector

The Fund acquired twelve properties in the seventeen month period. These strategic acquisitions, which are set out below, have beenmade across all three property types and have been identified for their ability to deliver sustainable total return growth ahead of theportfolio average. SA Corporate has specifically set out to increase its office portfolio and a number of extremely well-let and welllocated office properties have been acquired in the period under review.

193527121253324071344030

405

Cnr Koornhof and Essex Streets, Meadowdale, Gauteng5 Yaldwyn Road, Jet Park, GautengTurner and Townsend House, Illovo Boulevard, Gauteng20 Commercial Road, Strydom Park, GautengStandard Bank Centre, Hillcrest, KZN772 Mimetes Road, Denver, GautengGame Centre, Ermelo, MpumalangaMelville Boulevard, Melville, GautengKV3 Portfolio, CountrywideCnr Staal & Stephenson Roads, Pretoria, GautengCnr Old Pretoria Road, Midrand, Gauteng8 Sookay Place, Derby Downs, KZN

IndustrialIndustrialOfficeIndustrialOfficeIndustrialRetailRetailOfficesIndustrialOfficeOffice

Total

Address Cost(Rm)

Sector

10,8810,7510,1411,049,509,649,409,56

11,3011,759,10

10,17

InitialYield(%)



A n n u a l R e p o r t 2 0 0 6 15


PORTFOLIO ACTIVITY (continued)

In addition to the properties acquired, SA Corporate completed three developments to a total value of R176 million. As can be seenfrom the initial yields at which these developments have commenced trading, there is value in the Fund identifying and exploitingdevelopment opportunities. Management is mindful of the importance of mitigating against the potential risk that developmentintroduces and it is worth noting that the structuring of the transactions in respect of the two retail properties has given rise to actualtrading yields exceeding those forecast at the commencement of the projects. The warehouse development, in Tygerberg, wasundertaken on a fixed yield basis.

842171

176

Umlazi Mega City, Umlazi, KZNHighland Mews, Witbank, MpumalangaTygerberg Business Park, Cape Town, Western Cape

RetailRetailIndustrial

Total

Address Cost(Rm)

Sector

11,4010,5010,25

Yield(%)

Umlazi Mega City, which was developed in partnership with SA Retail, commenced trading in March 2006 and has been a resoundingsuccess since opening. The centre has been designed and tenanted with a clear view to bringing first class retail facilities to the localUmlazi community, while still providing the service and access requirements that our shoppers demand in this unique location. Whilethere has been a limited amount of attrition amongst the independent line shop tenants, the trading performance of the anchor tenantsand the national retailers has exceeded all expectations. The revaluation of this investment at 31 December 2006 to R110,4 millionindicates the strong value that has been created in undertaking this development. There remains further unexploited bulk on the site,which is currently being assessed in terms of a feasibility study.

The extensions to Highland Mews in Witbank, again in partnership with SA Retail, were undertaken with a view to securing the centreas the fashion hub in the area. The full range of stores in the Foschini Group have now been accommodated, as well as a new storefor Mr Price. The overall upgrade has been effective in establishing a modern retail centre which caters for all the fashion needs ofthe area.

The warehousing and distribution hub that the Fund developed for the Fuel Group in Tygerberg Business Park in Cape Town is a highquality facility that provides a strategic base for the tenant’s business in the Western Cape. The modern design and superb accessthat the building provides will entrench this property as a flagship in the Fund’s industrial portfolio.

PORTFOLIO PERFORMANCE

The Fund’s standing portfolio again delivered exceptional total returns in the 2005 calendar year, as measured by IPD. The SA Corporatetotal return of 34,4% outperformed the listed fund benchmark of 33,8% and placed the Fund sixth out of a total of seventeenparticipants. When measured against the IPD Universe, which returned 28,8%, the Fund’s performance was most encouraging.

The disaggregation of the performance of the underlying property types gives a more meaningful illustration of how well the portfoliohas performed.

Total return %SA Corporate Benchmark

Retail 19.6 38.2Office 41.8 28.2Industrial 40.5 32.4

16

PORTFOLIO PERFORMANCE (continued)

The retail benchmark performance was significantly impacted by the outperformance of Super Regional Centres, which exhibited totalreturns approximating 80%, on the back of outstanding capital appreciation. SA Corporate, with no exposure to these assets, clearlywould have underperformed the retail benchmark by comparison, but it is encouraging to consider that both the office and industrialportfolios delivered total returns well in excess of the benchmarks, even more so given the Fund’s overweight investment in theindustrial sector.

The Fund has submitted its returns to IPD for the 2006 calendar year which, while not confirmed at this stage by IPD, again indicatethat the portfolio has performed strongly. According to the returns, which are based on the independent valuations referred to laterin this report, the standing portfolio delivered a total return of 33,8%. The income yield component was 10,2% and capital growthamounted to 21,6% over the year.

Both the industrial and office markets are showing signs that the recovery in market rentals is both well set and sustainable, lookingahead for the next three to five years. Sharp vacancy contractions and rapidly escalating building costs are pushing the commencingrentals on new developments to new highs. The tenants occupying these properties are similarly benefiting from the high businessconfidence in the local economy and are able to support these rentals, giving a perceptive boost to market rental thresholds on existingproperties.

SA Corporate has a substantial industrial portfolio, which currently has no vacant space, and the average gross monthly rental onthese properties is R26/m2. It is management’s strong view that these rentals will appreciate in line with the market and, as expiringleases are renewed, meaningful growth will be achieved from this sector of the Fund’s portfolio.

Notwithstanding the interest rate increases which were implemented during the course of 2006, the continued strength in consumerspending has resulted in retail sales growing further and market rentals have increased accordingly on the back of higher turnovers.The robust performance of retail property underscores the fact that these assets are able to respond rapidly to improving tradingconditions, while offering defensive qualities in a softening market.

NET ASSET VALUE

The portfolio was independently valued at year end by CB Richard Ellis (Pty) Ltd and Dube & Richardson Property Consultants (Pty)Ltd. The valuation of R3,1 billion was underpinned by a 17% increase in the standing portfolio, excluding all sales and acquisitions,from July 2006. This increase in value can be directly ascribed to the improved market conditions, where the underlying rental growthhas combined with strong investment fundamentals driven by the demand for direct property investment.

At 31 December 2006, the Fund’s net asset value was 340 cents per unit.



8 Director Drive, Aeroport Industrial Estate, Gauteng

A n n u a l R e p o r t 2 0 0 6 17


FUNDING

SA Corporate has a total of R699 million in long-term borrowings. The entire loan is currently with Nedbank Limited, taken out interms of a total loan facility of R750 million. The terms of that facility are such that the Fund is not obliged to register mortgage bondsas security, which allows for greater flexibility in accessing these borrowings. The interest rates which the Fund has negotiated remainvery competitive in terms of comparable conventional debt, being 2,3% below prime on a variable basis and an all-in margin of 1,3%on fixed loans.

The loan position and costs at 31 December 2006 are set out below:R000

Loan bearing interest at a floating rate of Prime minus 2,3% per annum 599 265Loan bearing interest at 10,57% per annum until 13 September 2013 and Prime minus 2,3% thereafter 100 000

699 265Less: prepayment of net rentals (46 600)

652 665

The total long-term borrowings amount to some 23% of the portfolio value at year end. Outstanding commitments in respect ofapproved acquisitions and developments total R141 million and the anticipated proceeds on the sale of properties amount toR76 million. Given these commitments, SA Corporate has a further R214 million in terms of its overall borrowing capacity of 30% ofthe fair value of the portfolio.

REGIONAL AND SECTORAL ANALYSIS

The regional breakdown of the Fund’s portfolio is depicted below. The bias to KwaZulu Natal has been slightly reduced in the periodunder review in accordance with management’s stated investment policy of increasing the exposure to Gauteng and the Western Cape.It is intended that this strategy will be escalated in the coming year. The strength of the industrial market in the greater Durban areais supported by increased demand for the limited space available and management is comfortable increasing investment in this propertytype in KZN. The targeted growth in Gauteng will be across all three sectors, while retail and office investments in the Western Capewill be pursued.

Regional spread by rentable area

50%

8%

42%

Regional spread by revenue(excluding rental straight line adjustment)

Gauteng

KwaZulu Natal

Western Cape

10%

52%

38%

Regional spread by market value(excluding rental straight line adjustment)

11%

50%

39%

18



REGIONAL AND SECTORAL ANALYSIS (continued)

SA Corporate currently has an overweight position in the industrial sector and this is a historical feature of the portfolio. As one ofthe strategic objectives of the Fund, management seeks to bring about a greater alignment of the Fund’s portfolio with the weightingsin the IPD Universe. This strategy will necessitate a much higher exposure to retail properties and an increase in the office sector.The successful implementation of the acquisition of SA Retail, following the offer that has been made to SA Retail unitholders, willintroduce a greatly enhanced retail portfolio and a consequent dilution in the industrial and office portfolios. Given the robust andimproving performance of industrial property, management will seek to remain overweight in the industrial sector in order to takeadvantage of the growth upside that it currently offers.

TENANT PROFILE, LEASE EXPIRIES AND OCCUPANCY LEVELS

The tenant profile of the various property types in the portfolio is set out below. The high exposure to national and anchor tenantsacross the portfolio has been a hallmark of the Fund and this has underpinned the quality of property earnings. As the portfolioincreases its retail weighting, management will give careful consideration to line shop risk and the impact this will have on earningsgrowth going forward.

At year end the Fund had an overall vacancy rate of 1% by area. This is a clear indication of the strength of the property market andthe high tenant demand for prime rentable space. It also confirms the fact that SA Corporate’s portfolio is well positioned to benefitfrom this ongoing demand, given the quality and strategic locality of the Fund’s assets.

The lease expiry profile of the Fund is fairly typical of a diversified portfolio, where the longer dated industrial leases balance out theshorter, higher value retail and office leases. There is a relatively high expiry of industrial leases in the 2007 calendar year, which isa positive factor in the light of the strong demand and improving market rental environment that we are currently enjoying. The bulkof these industrial expiries are in respect of the leases with Grindrod J&J Logistics on Maydon Wharf in Durban where, by virtue ofthe unique nature of these properties, demand is incredibly high. Management anticipates that positive rental growth will be achievedin these renewals.

Sectoral spread by rentable area

7%

14%

79%

Sectoral spread by revenue(excluding rental straight line adjustment)

30%

10%

60%

Sectoral spread by market value(excluding rental straight line adjustment)

27%

12%61%

Industrial

Office

Retail

A n n u a l R e p o r t 2 0 0 6 19


TENANT PROFILE, LEASE EXPIRIES AND OCCUPANCY LEVELS (continued)

Industrial portfolio - tenant profile by rentable area

Retail portfolio - tenant profile by rentable area

40%

4%

56%

Large national, largelisted, government andmajor franchisee tenants

National, listed,franchisees, medium tolarge professional firms

Other

Office portfolio - tenant profile by rentable area

9%

35%

49%

7% Large national, largelisted, government andmajor franchisee tenants

National, listed,franchisees, medium tolarge professional firms

Other

Vacant

22%

37%

38%

3%

National

Anchor

Line

Vacant

Vacancy profile by sector by rentable area

99.0%

0.5% 0.5% 0.0% Industrial

Office

Retail

Not vacant

At 31 December 2006, the portfolio’s weighted average gross rental per square metre was R39.95 (Industrial: R26.33; Office: R60.72;Retail: R68.27). The weighted average rental escalation is 8% which is representative of all sectors. The weighted average annualisedproperty yield for the core portfolio is 11.15%

Lease expiry profile by sector by rentable area Lease expiry profile by sector by closing rentals

2007 2008 2009 2010 2011 2012 2013+

20

15

10

5

0

%

2007 2008 2009 2010 2011 2012 2013+

30

20

10

0

% Industrial

Office

Retail

20



UNIT PRICE AND TRADEABILITY

The movement in the unit price and the monthly trades in SA Corporate for the seventeen months are set out in the table below.The Fund has again proven to be one of the more liquid counters in the sector with approximately 66% of the units at a value of R1,5billion traded during the year.

TRANSACTIONS IN PROGRESS

SA Corporate has acquired two properties since the year endForest Road Design and Décor Centre in Fourways, Johannesburg was bought for a total cost of R104 million and at an initial propertyyield of 9,1%. The transfer of this property was effected on 8 February 2007. This home and leisure focused retail property is extremelywell located in a high growth commercial node in the northern suburbs of Johannesburg and surrounded by numerous residentialcluster developments targeted at the upper income home buyer. The centre caters to the home improvement and furniture needs ofthis market and, given its proximity to the major arterial roads in the precinct, will attract customers from a wide and growingcatchment area.

An industrial property located in Robertville, Gauteng was acquired for R17,5 million at an initial yield of 11,46%. This modern facilityis extremely well located in a growth area on the West Rand and offers rental upside on expiry of the lease.

SA SA Corporate Corporate

Month high low Ruling* No. units Value traded(Cents) (Cents) (Cents) traded Rm

31 August 05 315 285 311 54 345 468 16530 September 05 335 310 325 27 452 822 8831 October 05 350 300 330 27 775 949 9030 November 05 334 282 301 23 181 721 7231 December 05 330 303 329 39 260 483 12531 January 06 350 323 335 18 273 164 6228 February 06 369 320 345 13 230 168 4631 March 06 385 345 385 32 043 447 11430 April 06 389 348 368 14 022 832 5131 May 06 368 327 357 34 493 200 12030 June 06 358 275 310 26 439 348 8531 July 06 305 260 280 26 850 117 7531 August 06 340 269 320 15 979 799 4730 September 06 322 295 304 30 060 448 9231 October 06 335 290 333 17 735 798 5430 November 06 348 325 343 71 698 953 23831 December 06 349 330 340 7 789 914 26

480 633 631 1 550* Month end

A n n u a l R e p o r t 2 0 0 6 21


UNITHOLDER PROFILE AND JSE DISCLOSURE

The major unitholders are set out in the table below.

No. ofBeneficial unitholders holding 3% or more Units %

Old Mutual Group 172 439 269 23.78Marriott Asset Management 67 469 741 9.30Rand Merchant Bank 28 545 085 3.94Investment Solutions 24 555 017 3.39BOE Nominees 23 657 600 3.26

Analysis of unitholders by size is contained in the table below.

No. of No. ofUnitholders’ classification Unitholders % Units %

1 - 1,000 units 887 20.05 300 660 0.041,001 - 10,000 units 1 371 30.98 7 030 230 0.9710,001 - 100,000 units 1 746 39.46 58 230 755 8.03100,001 - 1,000,000 units 328 7.41 89 966 626 12.411,000,001 units and over 93 2.10 569 655 501 78.55

4 425 100.00 725 183 772 100.00

Analysis of unitholders by classification is contained in the table below.

No. of No. ofUnitholders’ profile Unitholders % Units %

Banks 29 0.66 13 143 632 1.81Close Corporations 53 1.20 2 745 867 0.38Endowment Funds 106 2.40 14 441 433 1.99Individuals 3 229 72.97 53 974 539 7.44Insurance Companies 15 0.34 112 134 629 15.46Investment Companies 17 0.38 24 997 040 3.45Medical Aid Schemes 6 0.13 1 979 409 0.27Mutual Funds 107 2.42 305 051 339 42.07Nominees and Trusts 647 14.62 106 185 031 14.64Other Corporations 35 0.79 1 097 029 0.15Pension Funds 70 1.58 61 793 805 8.52Private Companies 88 1.99 10 331 942 1.43Public Companies 23 0.52 17 308 077 2.39

4 425 100.00 725 183 772 100.00

22



BROAD BASED BLACK ECONOMIC EMPOWERMENT TRANSACTION

SA Corporate has announced the details of a significant milestone in the Fund’s progress, in confirming the introduction of BEE partnersand their investment in the Fund. The BEE consortium comprises WIPHOLD and Kensani Properties (Wipken), who both bring uniqueand complementary skills and opportunities for SA Corporate and who will facilitate further alignment with the overall objectives ofthe Property Charter and the final Codes of Good Practice in terms of Black Economic Empowerment.

Wipken will assume an 11% stake in SA Corporate following the successful acquisition of SA Retail by the Fund, by virtue of anagreement reached between a major unitholder in SA Retail and Wipken, for the latter to acquire the entire unitholding of the formeron consolidation. The transaction falls squarely in line with the objectives of the Fund and will introduce a new chapter in thetransformation of SA Corporate and management is encouraged and excited by the prospects of interacting actively with our partnersas they assume positions on the Board and on the various operational committees.

UNITHOLDER PROFILE AND JSE DISCLOSURE (continued)

Analysis of unitholders between public and non-public holders is contained in the table below.

No. of No. ofPublic / non - public unitholders Unitholders % Units %

Non - Public Shareholders 6 0.13 101 083 371 13.94Directors and Associates of the Company holdings 5 0.11 550 200 0.08Holdings of more than 10% 1 0.02 100 533 171 13.86Public Shareholders 4 419 99.87 624 100 401 86.06

4 425 100.00 725 183 772 100.00

Corner Giel Basson Drive & Nathan Mallachi,Goodwood, Western Cape

A n n u a l R e p o r t 2 0 0 6 23


BROAD BASED BLACK ECONOMIC EMPOWERMENT TRANSACTION (continued)

Significant for existing unitholders and the Fund itself, is the fact that the equity that will be assumed by the BEE consortium hasbeen acquired from an existing unitholder in SA Retail and therefore has not been issued by the Fund at any discount. There is noongoing financial support that will be rendered by SA Corporate to Wipken and therefore there is no prejudice to existing SA Corporateunitholders.

PROSPECTS

As alluded to in the Chairman’s Report, SA Corporate has entered a new phase in terms of its strategy to transform the nature ofthe Fund and to provide our unitholders with superior investment returns.

The portfolio is well positioned to continue growing distributions as underlying property rentals improve. The property fundamentalsin South Africa remain strong and, provided business confidence is supported by stability in the macro-economic environment, thereis every reason to suggest that the rental market will maintain its robust performance.

The various corporate activities that the Fund has embarked on have already generated significant value upside for unitholders andat the time of writing this report, SA Corporate unitholders have already seen an increase of more than 19% in the capital value oftheir investment since 31 December 2006. It is management’s view that there is further value in SA Corporate and that the initiativesand strategy which have been implemented will extract this value for the benefit of all unitholders.

Management and Corporate Governance Report

1. MANAGEMENT OF THE FUND

1.1 Management company and committee structuresThe Fund is managed by SA Corporate Real Estate Fund Managers Limited (formerly Marriott Property Fund Managers Limited),a company registered in terms of the Collective Investment Schemes Control Act, No. 45 of 2002 as a management companyof a collective investment scheme in property. The shareholders and directors of this company are set out on pages 4 to 8 ofthis report.

The board of directors of the management company has established the following sub-committees, viz: an Investment Committee,a Risk, Audit and Compliance Committee and a Nomination and Remuneration Committee, the members of which are indicatedon pages 7 and 8 of this report.

Following the effective transfer of ownership of the management company from the Marriott Group to Old Mutual InvestmentGroup (SA) - Property Investments, Messrs Tony Ardington and Mick Hyatt and their alternate, Mike Mun-Gavin, were replacedby Ben Kodisang, Colin Young and Michael Anderson, respectively, as non-executive directors. These changes were made witheffect from 7 July 2006. Managing Director, Roger Perkin paid tribute to the three directors who have resigned. “The threeoutgoing directors have all been instrumental in the growth of SA Corporate and were the driving force behind the initial assemblyand listing of the five funds which ultimately merged in 1998 to form Martprop Property Fund". The incoming directors have awealth of real estate experience and knowledge to draw on.

Further to the above, with effect from 21 February 2007, Lauren Tapping, previously an alternate director to Roger Perkin andCraig Ewin, has been appointed as an executive director and Craig Ewin, previously a non-executive director, assumed the roleof executive director.

24

1. MANAGEMENT OF THE FUND (continued)

1.2 Management feeThe Fund pays a service fee to the management company amounting to 0,4% per annum of the total market capitalisation ofthe Fund, calculated monthly on the average daily closing unit price of the Fund as recorded by the JSE Securities ExchangeSouth Africa, plus total long term borrowings. The amount paid during the 17 months under review totalled R16,3 million (2005(12 months): R8,6 million).

The management company has contracted with Marriott Property Services (Pty) Ltd, part of the Old Mutual Investment Group(SA) - Property Investments (OMIG(SA)-PI), in respect of the asset management of the Fund as well as the property managementof the portfolio.

OMIG(SA)-PI is remunerated for the services rendered with regard to the asset management of the Fund by SA Corporate RealEstate Fund Managers Limited.

In terms of the contract, OMIG(SA)-PI attends to the day-to-day property management of the portfolio, the financial andaccounting related responsibilities and the statutory secretarial responsibilities, the costs of which are borne by the Fund andthe underlying property companies.

2. STATEMENT ON CORPORATE GOVERNANCE

2.1 IntroductionThe board of directors of SA Corporate Real Estate Fund Managers Limited, the management company of the SA CorporateGroup, endorses and has adopted and applied the Code of Corporate Practices and Conduct as set out in the King II Report.In supporting the Code, the directors are committed to conducting the business affairs of the Group with the utmost good faith,highest level of ethics and in accordance with generally acceptable practices within the constraints of industry norms, thusensuring timely, relevant and meaningful reporting to unitholders and other stakeholders.

The directors have accordingly established mechanisms and policies relevant to the Group's business operations and businessrisks. The boards procedures and policies, summarised below, reflect the environment in which the board operates in compliancewith the principles of the Code.



27 Beryl Street, Jet Park, Gauteng

A n n u a l R e p o r t 2 0 0 6 25


2.2 Board of directors and committeesThe board has developed and adopted a charter, allowing for the specific responsibilities of the board to be discharged completelyand effectively, ensuring unitholders' value is preserved and enhanced. The salient terms of the board charter are set out below:

• Composition of the board and related mattersThe composition of the board, including its size, diversity, demographics and continuity is considered and reviewed bythe Nomination and Remuneration Committee. The composition of the board and its committees are set out on pages7 and 8.

The board consists of three executive directors and seven non-executive directors, of which five are considered to beindependent. The board holds a voluntary Annual General Meeting, to allow for the appointment of two independentdirectors who are elected by the unitholders of the Fund. The members of the board bring a wealth of experience andensure independent debate on matters of strategy, policies, progress and performance.

Procedures for appointment to the board are formal. The board as a whole approves the appointment of new directors.Background checks are done prior to the appointment of new directors and include enquiries as to possible disqualifications.All directors, executive and non executive, when appointed are inducted according to a program in order to make themau fait with the workings of the Group, it’s businesses and it’s strategies. In this way they are better able to fulfil theirfiduciary duties and financial responsibilities as directors.

The board meets at least quarterly with additional meetings being held as necessary. During the period under review sixmeetings were held. The following current directors who did not attend all six meetings were: Messrs K.J. Forbes (2absences) and Mrs I.N. Mkhari (2 absences). The board is responsible for the strategic direction of the Group, maintainsfull and effective control of the Group and is ultimately responsible for ensuring that the business is a going concern. Toassist the board in effectively discharging its responsibilities the following committees have been put in place:

• Nomination and Remuneration CommitteeThis committee is mandated to monitor and review the remuneration of executive and non-executive directors. Inaddition, this committee, on an ongoing basis, assesses the mix of skills, experience and diversity of the board. Thiscommittee, chaired by the Chairman of the board (who is a non-executive, non-independent director), includes anindependent non-executive director. The managing director is invited to attend these meetings. This committee meetsat least twice per annum.

• Investment CommitteeThis committee comprises two executive directors and two non-executive directors. This committee meets quarterlyand reports directly to the board. This committee is responsible, inter-alia, for considering acquisition and disposalof properties and executing the investment strategy of the Group.

• Risk, Audit and Compliance CommitteeThis committee comprises two non-executive directors and one executive director and is chaired by an independentnon-executive director. It is the intention of the board to replace the executive director with a non-executive directorin the new year. The Group's Managing Director and the independent auditors are invited to these meetings. Thiscommittee meets at least three times per annum. This committee’s responsibilities include, inter-alia:

• Monitoring compliance with applicable legislation and requirements of regulatory authorities.• Reviewing policies relating to risk management, financial and internal controls, accounting policies, reporting and disclosure.• Reviewing and reporting on external audit findings, reports, audit fees and appointments.• With regard to risk management this committee is required to assist in identifying, assessing, managing and monitoring the risks to which the business is exposed to.

26



Stellenbosch Square, Stellenbosch, Western Cape

2.2 Board of directors and committees (continued)Notwithstanding the above committee's responsibility with regard to risk management, the directors acknowledgethat risk management is ultimately a board responsibility. To this end, the directors are of the opinion that adequateaccounting records are maintained, that there are no significant deficiencies in the existing system of internal controlsand that all major insurable risks have been insured. The board is of the opinion that the financial records, includingthe financial statements fairly present the state of affairs of the Group. The following current directors who did notattend all meetings were: Messrs C.J. Ewin (2 absences) and E.S. Seedat (1 absence).

The Group and the Management Company, having contracted out the property management and property asset managementof the Fund and the underlying fixed property companies to OMIG(SA)-PI has no direct employees. Accordingly, the Group hasno worker participation or affirmative action programmes. The board does, however, support and encourage its service providersand OMIG(SA)-PI to adhere to these recommended practices. This adherence is monitored by the Nomination and RemunerationCommittee.

The Management Company is committed to a policy that allows for timeous and effective communication with unitholders andother stakeholders. To this end various policies governing communication, with interested parties are in place, having regardto the dissemination of quality, complete, accurate and reliable information. In the interest of enhancing communication andmaintaining relationships with unitholders the management company continues to hold a voluntary Annual General Meeting ofthe Fund.

2.3 Directors' responsibility and going concernIt is the directors' responsibility, as set out on page 9, to prepare financial statements that fairly present the state of affairs ofthe Group.

The external auditors are responsible for the independent auditing and reporting on the financial statements as set out on page10 of this report. The directors are of the opinion that adequate accounting records are maintained and that no major deficienciesexist in the system of internal controls, which controls are subject to ongoing review and improvement.

A n n u a l R e p o r t 2 0 0 6 27


* Fees accrue to the corporate entity where the director is employed.# These directors are employed and paid by OMIG(SA)-PI.° Resigned 7 July 2006.°° Resigned 29 March 2005.^ Appointed 7 July 2006.

Mr CJ Ewin and Ms L C Tapping were appointed as executive directors with effect from 21 February 2007.

There were no changes in the directors' interests between 1 January 2007 and 12 March 2007, being the last practical date prior topublication of this annual report.

Fees Number of units held

Directors Beneficial Non-beneficial17 months 12 2006 2005 2006 2005

to 31 monthsDecember to 31

2006 July 2005 (R000) (R000)

Non-executiveAJ Ardington *° 56 68 n/a 96 095 n/a 16 078KJ Forbes * 62 45 0 0 0 0IM Groves * 90 65 0 0 0 0AM Hyatt *° 44 53 n/a 772 600 n/a 0BM Kodisang *^# 37 n/a 0 n/a 0 n/aIN Mkhari 62 45 0 0 0 0ES Seedat 83 60 0 0 0 0UJ van der Walt °° 0 34 n/a n/a n/a n/aMI Wyndham 62 45 0 0 0 0CS Young *^# 29 n/a 0 n/a 0 n/aM Anderson *^#(alternate) 0 n/a 0 n/a 0 n/aMA Mun-Gavin *°(alternate) 0 0 n/a 0 n/a 328 989

ExecutiveCJ Ewin *# 82 60 110 000 0 0 0RR Perkin *# 0 0 300 100 100 0 0LC Tapping *# 0 0 90 300 300 0 0

Prior year over accrual (8) 0 0 0 0 0

Total 599 475 500 400 869 095 0 345 067

2.3 Directors' responsibility and going concern (continued)The directors are of the opinion that the Group has adequate resources and funding facilities to continue in operation for theforeseeable future and the financial statements have accordingly been prepared on a going concern basis. The external auditorsconcur in this respect with the directors.

The table below sets out the fees paid to the directors of the Management Company and the directors' interests in SA Corporate.

28

Balance Sheetsas at 31 December 2006

Group Fund 2006 31/7/2005 2006 31/7/2005

R000 R000 R000 R000Note Restated Restated

Assets

Non-current assets

Investment in fixed property companies 7 - - 416 514 249 544

Shares - - 117 635 117 973

Loans - - 298 879 131 571

Investment property 8 2 959 851 1 888 902 2 601 982 1 648 151

At valuation 3 026 564 1 947 500 2 660 244 1 699 235

Straight line rental adjustment (66 713) (58 598) (58 262) (51 084)

Property under development - 13 282 - -

Rental receivable straight line adjustment 55 199 46 085 47 746 40 548

3 015 050 1 948 269 3 066 242 1 938 243

Current assets 153 669 118 956 102 733 121 709

Properties classified as held for disposal 76 410 - - -

Dividends receivable - - 34 359 16 430

Trade and other receivables 43 649 39 914 38 497 39 812

Straight line rental adjustment 11 514 12 513 10 516 10 536

Cash resources 22 096 66 529 19 361 54 931

Total assets 3 168 719 2 067 225 3 168 975 2 059 952

Unitholders' funds and liabilities

Unitholders' funds 9 2 375 610 1 774 925 2 375 821 1 775 687

Non-current liabilities 677 149 168 365 652 665 156 602

Interest bearing borrowings 10 652 665 155 000 652 665 155 000

Interest rate swap derivative - 1 602 - 1 602

Deferred capital gains taxation 11 24 484 11 763 - -

Current liabilities 115 960 123 935 140 489 127 663

Trade and other payables 28 415 25 162 52 944 28 890

Capital gains taxation and secondarytaxation on companies 64 3 905 64 3 905

Unclaimed distributions 485 576 485 576

Distributions payable 86 996 94 292 86 996 94 292

Total unitholders' funds and liabilities 3 168 719 2 067 225 3 168 975 2 059 952

A n n u a l R e p o r t 2 0 0 6 29


Group Fund Seventeen Twelve Seventeen Twelve



Income 3.11 478 980 292 645 460 536 281 028Rent 385 086 239 086 336 434 203 998Straight line rental adjustment 8 115 1 556 7 178 1 361Recovery of property expenses 78 879 47 563 64 603 40 097Interest 6 900 4 440 4 940 2 600Dividends from fixed property companies - - 47 381 32 972

Expenses 194 016 107 687 176 509 94 231Accounting and secretarial fees 5 848 4 037 5 418 3 419Audit fees 1 198 735 1 190 571Administrative fees 3 087 1 238 3 087 1 238Property administration fees 13 485 8 419 11 929 7 276Property expenses 105 593 69 328 90 080 57 797Service fees 16 280 8 639 16 280 8 639Interest paid 50 127 15 805 50 127 15 805Surplus on revaluation of interest rate swap derivative (1 602) (514) (1 602) (514)

Deferred taxation on straight line rental adjustment (496) (57) - -

Headline earnings 284 468 184 901 284 027 186 797Capital (deficit)/surplus on disposal of investmentproperties/investments (2 091) 1 154 (2 468) (724)Write-up on revaluation of investment properties/investments 606 220 369 534 593 822 359 417Revaluations 614 335 371 090 601 000 360 778Straight line rental adjustment valuation (8 115) (1 556) (7 178) (1 361)

Taxation on property revaluation 13 (12 665) (10 881) - (1 801)On capital transactions (13 161) (10 938) - (1 801)Straight line rental adjustment 496 57 - -

Net profit attributable to unitholders 875 932 544 708 875 381 543 689

Units in issue (000) 725 184 725 184 725 184 725 184

Cents Cents Cents Cents

Net profit per unit 14 120,79 75,11 120,71 74,97Headline earnings per unit

Prior to straight line rental adjustment 38,18 25,29 38,18 25,57Straight line rental adjustment 1,05 0,21 0,99 0,19After straight line rental adjustment 15 39,23 25,50 39,17 25,76

Distribution per unit 16 38,00 25,50 38,00 25,50

Income Statementsfor the period ended 31 December 2006

30

Statements Of Changes In Unitholders’ Fundsfor the period ended 31 December 2006




Unitholders' funds at beginning of period 1 774 925 1 395 250 1 775 687 1 397 031

Prior year deferred taxation on straight line rental adjustment 6 - 19 889 - 19 889

Restated balance at beginning of period 1 774 925 1 415 139 1 775 687 1 416 920

Capital movements 600 685 361 820 600 134 358 767

Write-up on revaluation of investment properties/investments 606 220 369 534 593 822 359 417

Capital (deficit)/surplus on disposal of investment

properties/investments (2 091) 1 154 (2 468) (724)

Taxation (12 665) (10 881) - (1 801)

Surplus on revaluation of interest rate swap derivative 1 602 514 1 602 514

Straight line rental adjustment net of taxation 7 619 1 499 7 178 1 361

Maintenance reserve movements

Transfer from maintenance reserves - (2 034) - -

Revenue movements - - - -

Net profit for the period 875 932 544 708 875 381 543 689

Transfers to capital (600 685) (361 820) (600 134) (358 767)

Transfer from maintenance reserves - 2 034 - -

Unclaimed distributions written back 323 - 323 -

Available for distribution 275 570 184 922 275 570 184 922

Distributions attributable to unitholders (275 570) (184 922) (275 570) (184 922)

Unitholders' funds at end of period 2 375 610 1 774 925 2 375 821 1 775 687

A n n u a l R e p o r t 2 0 0 6 31





Cash flows from operating activities

Net profit for the period 875 932 544 708 875 381 543 689

Adjustments for:

Interest received (6 900) (4 440) (4 940) (2 600)

Interest paid 50 127 15 805 50 127 15 805

Write-up on revaluation of investment properties before

straight line rental adjustment and net of taxation (601 670) (360 209) (601 000) (358 977)

Taxation on straight line rental adjustment 496 57 - -

Capital deficit/(surplus) on disposal of investment

properties/investments 2 091 (1 154) 2 468 724

Surplus on revaluation of interest rate swap derivative (1 602) (514) (1 602) (514)

Unclaimed distribution written back 323 - 323 -

Operating profit before working capital changes 318 797 194 253 320 757 198 127

Working capital changes (573) (22 764) 7 349 (23 258)

Increase in trade and other receivables (3 735) (18 714) (16 614) (22 413)

Increase/(decrease) in trade and other payables 3 162 (4 050) 23 963 (845)

Cash generated from operations 318 224 171 489 328 106 174 869

Interest received 6 900 4 440 4 940 2 600

Interest paid (50 127) (15 805) (50 127) (15 805)

Taxation paid (4 281) (4 294) (3 841) (4 842)

Distributions paid (282 866) (181 107) (282 866) (181 107)

Net cash outflow from operating activities (12 150) (25 277) (3 788) (24 285)

Net cash flows from investing activities (529 948) (141 353) (529 447) (141 101)

Investment properties/investments (597 942) (243 927) (564 108) (243 675)

Proceeds on disposal of investment properties/investments 67 994 102 574 34 661 102 574

(542 098) (166 630) (533 235) (165 386)

Net cash flows from financing activities

Increase in interest bearing borrowings 497 665 155 000 497 665 155 000

Net decrease in cash (44 433) (11 630) (35 570) (10 386)

Cash resources at beginning of period 66 529 78 159 54 931 65 317

Cash resources at end of period 22 096 66 529 19 361 54 931

Cash Flow Statementsfor the period ended 31 December 2006

32

1. GENERAL INFORMATION

SA Corporate Real Estate Fund is a collective investment scheme in property established in terms of the Collective InvestmentSchemes Control Act, No. 45 of 2002. The Fund is listed on the JSE Securities Exchange South Africa. The Fund is managedby SA Corporate Real Estate Fund Managers Limited (formerly Marriott Property Fund Managers Limited), a company approvedby the Registrar of Collective Investment Schemes to manage the Fund.

2. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

In the current period the Group has adopted all of the new and revised Standards and Interpretations issued by the InternationalAccounting Standards Board (the IASB) and the International Financial Reporting Interpretations Committee (IFRIC) of the IASBthat are relevant to its operations and effective for accounting periods beginning on or before 1 August 2005. The adoption ofIFRS has not resulted in any adjustment to the amounts reported previously in the annual financial statements for the yearended 31 July 2005.

3. ACCOUNTING POLICIES

The annual financial statements have been prepared in accordance with International Financial Reporting Standards. Theaccounting policies used in the preparation of the financial statements are consistent with those applied in the prior year, exceptfor the deferred taxation as disclosed in note 6.

The principal accounting policies are set out below:

3.1 Basis of consolidationThe group annual financial statements incorporate the results and financial position of the Fund and all its subsidiaries. Theresults of subsidiaries are included from the effective dates of acquisition and up to the effective dates of disposal. All inter-entity transactions and balances between group entities are eliminated except for capitalised interest referred to in note 3.5,which forms part of the income earned by and distributed in full by the Fund.

The accounting policies of the subsidiaries are consistent with those of the Fund.

3.2 Business combinationsThe purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisitionis measured as the aggregate fair value of the underlying assets given, equity instruments issued and liabilities incurred orassumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilitiesand contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.The excess of the cost of the acquisition over the fair value of the Group's share of the identifiable net assets acquired is recordedas goodwill and is tested for impairment on an annual basis.

If the cost of the acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recogniseddirectly in the income statement. An impairment loss recognised for goodwill is not reversed in a subsequent period. On disposalof a subsidiary, attributable goodwill is included in the determination of the profit or loss on disposal.

3.3 Investment in subsidiariesInvestments in subsidiary companies, including fixed property companies, are revalued to market value at each reporting date.Surpluses or deficits on revaluation or disposal are reflected in the income statement and transferred to capital in the statementof changes in unitholders' funds.

3.4 Investment propertyInvestment properties are properties held to earn rentals and appreciate in capital value. Investment properties are initiallyrecognised at cost and are stated at their fair value at each reporting date. These fair values of property exclude accruedoperating lease income. Gains or losses arising from changes in the fair values are reflected in the income statement in theperiod in which they arise and are transferred to capital in the statement of changes in unitholders' funds. Land and buildingsare not depreciated.

Statutory Information And Notes

To The Annual Financial Statementsat 31 December 2006

A n n u a l R e p o r t 2 0 0 6 33


3.4 Investment property (continued)Properties purchased by the Group and settled by the issuing of units are recorded at the fair value of the properties acquired,unless that fair value cannot be reliably estimated, in which case they are measured at the fair value of the units granted interms of IFRS2: Share Based Payments. This excludes purchases of properties which are regarded as business combinationsas described in note 3.2 above.

Buildings under development are carried at cost.

3.5 Capitalisation of interestWhere a fixed property company undertakes a major development or refurbishment of its property, interest is capitalised tothe cost of the property concerned during the construction period and is treated as income in the Fund. Where a property, ownedby the Fund, undertakes a major development or refurbishment interest is capitalised to the extent that it is directly incurredin the course of development.

3.6 Assets held for saleProperties which have been earmarked for sale and whereby buyers are being located are classified as assets held for sale andare measured at their fair value less costs to sell.

3.7 TaxationThe Fund is treated as a trust for income taxation purposes and no liability for taxation arises on its revenue profit to the extentthat it is distributed by the Fund. The Fund’s capital profit is exempt from capital gains taxation.

The fixed property companies are subject to taxation. For these companies the income taxation expense comprises the sumof current taxation payable, secondary taxation on companies and deferred taxation. Taxable profit differs from accounting profitas it excludes income or expenses that are taxable or deductible in other years and it excludes items never deductible or taxable.

Deferred taxation is provided for using the balance sheet liability method based on temporary differences. Temporary differencesare differences between the carrying amounts of assets and liabilities for financial reporting purposes and their taxation bases.Deferred taxation is charged to the income statement except to the extent that it relates to a transaction that is recogniseddirectly in equity, or a business combination that is an acquisition. A deferred taxation asset is recognised to the extent that itis probable that future taxable profits will be available against which the associated unused tax losses and deductible temporarydifferences can be utilised. Deferred taxation assets are reduced to the extent that it is no longer probable that the relatedtax benefit will be realised.

Deferred taxation assets and liabilities are not recognised if the temporary differences arises from goodwill, or from the initialrecognition (other than business combinations) of other assets and liabilities in a transaction which effects neither the taxableprofit nor the accounting profit.

Deferred taxation is raised at the current tax rate on all temporary differences, including those arising from the revaluation ofproperties owned by fixed property companies. When a property, owned by a fixed property company, is earmarked for futuresale, deferred taxation is computed using the capital gains tax rate.

3.8 Impairment (excluding goodwill)The carrying amount of the Group's assets is reviewed at each balance sheet date to determine whether there is any indicationof impairment. An impairment loss is recognised in profit or loss whenever the carrying amount of an asset exceeds its recoverableamount, which is the higher of an asset's net selling price and value in use. Whenever an impairment loss is subsequentlyreversed, the carrying amount of the asset is increased to the extent that the increased carrying amount does not exceed theoriginal carrying amount. A reversal of impairment loss is recognised immediately in profit or loss.

34


To The Annual Financial Statements (continued)

at 31 December 2006

3.9 Financial instrumentsA financial asset or financial liability is recognised on the balance sheet for as long as the Group is party to the contractualprovisions of the instrument.

Cash and cash equivalentsCash and cash equivalents comprise cash on hand and deposits held on call with banks.

Trade and other receivablesTrade and other receivables originated by the Group are held at amortised cost, using the effective interest rate method, afterdeducting accumulated impairment losses. Receivables with no fixed maturity are held at cost.

Straight line rental adjustmentRental income is recognised on the straight line basis over the lease period. The straight line rental adjustment represents thedifferential between the cash receivable per the lease agreements and the smoothed revenue.

InvestmentsInvestments are initially recognised at cost, including directly attributable transaction costs. Subsequent to initial recognitionthese instruments are measured as follows:- Held-to-maturity investments are held at amortised cost using the effective interest rate method after deducting accumulated impairment losses.- At fair value through profit or loss and available for sale investments are held at fair value. Gains or losses are recognised in net profit for the period.

Unitholders' fundsUnits issued by the Fund are initially recorded at the proceeds received net of direct costs. Included in unitholders' funds aretransfers to and from capital.

Interest bearing borrowingsInterest bearing borrowings are initially measured at fair value, and are subsequently measured at amortised cost, using theeffective interest rate method. Amounts repayable in the next twelve months are classified as current borrowings.

Trade payablesTrade payables are carried at the fair value of the consideration to be paid in the future for goods and services that have beenreceived or supplied and invoiced or formally agreed with the supplier.

Financial guarantee contractsFinancial guarantee contracts are accounted for as insurance contracts and are recorded at cost.

3.10 ProvisionsProvisions are recognised when the Group has a present legal or constructive obligation as a result of past events, for which itis probable that an outflow of economic benefits will occur, and where a reliable estimate can be made on the settlement amountof the obligation.

3.11 Revenue RecognitionRevenue comprises gross rental income, including all recoveries from tenants. Variable operating cost recoveries are recognisedon the accrual basis. Rental income and fixed operating costs recoveries are recognised on the straight line basis over the leaseperiod in accordance with IAS17: Leases.

Interest income is recognised at the effective rates of interest on a time related basis.

Dividends are recognised when the right to receive them is established.

A n n u a l R e p o r t 2 0 0 6 35


3.12 LeasesInvestment properties leased out under operating leases are reflected as investment properties on the balance sheet. Wherethere are fixed incrementals in rental income and expenses, the income/expense is recognised on a straight line basis in termsof IAS17: Leases.

3.13 Deferred ExpensesDeferred expenses comprise tenant installation costs and letting commissions which are amortised on a straight line basis overthe lease period to which they relate. These are currently included in accounts receivable due to the immaterial size thereof.

3.14 DistributionsIn terms of the Collective Investment Schemes Act, No. 45 of 2002 the Fund is obliged to distribute to its unitholders all netrevenue profit earned and received.

3.15 Segment reportingOn a primary basis the group operates in the following segments:- Industrial- Retail- Office

On a secondary basis the group reports on geographic locations as follows:- KwaZulu Natal- Gauteng- Western Cape

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated and are based on historical experience as adjusted for current marketconditions and other factors.

The group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,seldom equal the related actual results. The estimates or assumptions that have a significant risk of causing a material adjustmentto the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Estimate of the fair value of investment properties The best evidence of fair value is current prices in an active market for similar leases and other contracts. In the absence of such information, the Group determines the amount within a range of reasonable fair value estimates. In making its judgement the Group considers information from a variety of sources including:

1. current prices in an active market for properties of different nature, condition or location (or subject to different lease or other contracts), adjusted to reflect those differences;

2. recent prices of similar properties in less active markets, with adjustments to reflect any changes in economic conditions since the date of the transactions that occurred at those prices; and

3. discounted cash flow projections based on reliable estimates of future cash flows, derived from the terms of any existing leases and other contracts and (where possible) from external evidence such as current market rents for similar properties in the same location and condition, and using discount rates that reflect current market assessments of the uncertainty in the amount and timing of the cash flows.

(b) Principle assumptions of management's estimation of fair value If information on current or recent prices is not available, the fair values of investment properties are determined using discounted cash flow valuation techniques. The Group uses assumptions that are mainly based on market conditions

existing at each balance sheet date.

36



at 31 December 2006

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)

The principal assumptions underlying management's estimation of fair value are those related to: the receipt of contractedrentals, expected future market rentals, maintenance requirements and appropriate discount rates. These valuations are regularlycompared to actual market yield data, actual transactions by the Group and those reported by the market.

The expected future market rentals are determined with reference to current market rentals for similar properties in the samelocation and condition.

5. NEW ACCOUNTING STANDARDS AND IFRIC INTERPRETATIONS

Certain new additional accounting standards and IFRIC interpretations have been published that are applicable for futureaccounting periods. These new standards and interpretations have not been early adopted by the Group. The directors do notexpect that the adoption of the standards and interpretations will have a material impact on future financial statements. Thestandards and interpretations in issue, but not yet effective, that are relevant to the Group are:IFRS 7: Financial instrument disclosuresIFRS 8: Operating segmentsIFRIC 4: Determining whether an arrangement contains a leaseIFRIC 8: Scope of IFRS 2IFRIC 9: Reassessment of embedded derivativesIFRIC 10: Interim reporting and impairment

6. PRIOR YEAR ADJUSTMENT

In the prior period deferred taxation was provided on the straight line rental adjustment for properties owned by the Fund.Confirmation that the Fund is deemed to be a vesting trust for taxation purposes requires that no deferred taxation should beprovided on the straight line rental adjustment for properties owned by the Fund. The financial statements of the prior periodhave been restated to reflect this change. The effect of the restatement on the financial statements is summarised below:




Unitholders' funds at beginning of period - 19 889 - 19 889Net profit for the period - 544 - 544

- 20 433 - 20 433

7. INVESTMENT IN FIXED PROPERTY COMPANIES

The Fund has pledged and ceded the shares and loan accounts of certain of its subsidiary companies, to secure a loan facilityof R750 million granted to the Fund by Nedbank Limited. At 31 December 2006 the balance owing was R652,7 million(31/7/2005 : R155,0 million). Refer note 10.

Investments in fixed property companies are reflected at fair value.

A n n u a l R e p o r t 2 0 0 6 37





8. INVESTMENT PROPERTY

Carrying value at beginning of period 1 888 902 1 390 143 1 648 151 1 144 702- at valuation 1 947 500 1 447 185 1 699 235 1 194 425- straight line rental adjustment (58 598) (57 042) (51 084) (49 723)Transferred from property under development 13 282 - - -Acquisitions and improvements 597 942 243 927 484 031 229 600Disposals (70 085) (101 420) (37 129) (33 645)Fair value adjustment 606 220 369 534 506 929 307 494- at valuation 614 335 371 090 514 107 308 855- straight line rental adjustment (8 115) (1 556) (7 178) (1 361)Transfer to property under development - (13 282) - -Transfer to properties classified as held for disposal (76 410) - - -Carrying value at end of period 2 959 851 1 888 902 2 601 982 1 648 151- at valuation 3 026 564 1 947 500 2 660 244 1 699 235- straight line rental adjustment (66 713) (58 598) (58 262) (51 084)

The fair value of the entire portfolio of investment properties, wasdetermined by independent registered valuers CB Richard Ellis(Pty) Ltd and Dube and Richardson Property Consultants (Pty) Ltdbased on the discounted cash flow method and approved on21 February 2007 by the directors.

The independent valuers applied current market related assumptionsto the risks in rental streams of properties, which assumptionsreflect the strong fundamentals in the present investment propertymarket. Discount rates in the respective sectors ranged as follows:

Sector Discount rates Terminalcapitalisation

rates(%) (%)

Retail 13,2 to 16,0 9,0 to 13,0Industrial 14,5 to 18,5 8,5 to 13,5Office 14,7 to 17,0 9,5 to 12,7

9. UNITHOLDERS' FUNDS

725 183 772 units (2005: 725 183 772) 2 375 610 1 774 925 2 375 821 1 775 687

The statement of changes in unitholders' funds (set out on page30) reflects a detailed analysis of movements in unitholders' funds.

38



at 31 December 2006




10. INTEREST BEARING BORROWINGS

Nedbank Limited 652 665 155 000 652 665 155 000

Debt funding capacity comprises:Available loan facility 750 000 350 000 750 000 350 000- Additional debt funding capacity 181 000 238 000 181 000 238 000- Facility utilised to end of period (652 665) (155 000) (652 665) (155 000)Drawdown on facility to end of period (699 265) (197 500) (699 265) (197500)Prepayment of net rentals, available for re-advance 46 600 42 500 46 600 42 500

Debt capacity available at end of period 278 335 433 000 278 335 433 000Adjusted for future capital commitments andproceeds on disposal (64 451) (348 853) (64 451) (348 853)Capital commitments (140 861) (382 968) (140 861) (382 968)Expected proceeds on disposal 76 410 34 115 76 410 34 115

Anticipated available debt capacity 213 884 84 147 213 884 84 147Capital cash at end of period 162 33 533 162 33 533

The terms of the loan facility are as follows:- Capital is repayable on or before 31 October 2015- Loan bearing interest at a floating rate of Prime minus 2,3% (2005: Prime minus 1,5%) per annum 552 665 155 000 552 665 155 000- Loan bearing interest at 10,57% per annum until 13 September 2013 and Prime minus 2,3% thereafter 100 000 - 100 000 -

652 665 155 000 652 665 155 000The loan facility is secured by a pledge and cession of shares andloan accounts of certain of the Fund’s underlying propertycompanies. Refer to note 7.SA Corporate requires the written consent of Nedbank before itmay incur any indebtedness, other than the indebtedness toNedbank and ordinary trade creditors.

11. DEFERRED CAPITAL GAINS TAXATION

Balance at beginning of period 11 763 2 079 - -Realisation of deferred capital gains taxation - (202) - -Charged to the income statement 12 721 9 886 - -Balance at end of period 24 484 11 763 - -

12. CAPITALISATION OF INTEREST

Interest capitalised during development phases 5 853 311 3 784 311

A n n u a l R e p o r t 2 0 0 6 39





13. TAXATION ON PROPERTY REVALUATION

Capital gains taxation- Current 440 997 - 824- Deferred 12 721 9 886 - -Secondary taxation on companies - 55 - 977

13 161 10 938 - 1 801Deferred taxation on straight line rental adjustment (496) (57) - -

12 665 10 881 - 1 801

14. NET PROFIT PER UNIT

The calculation of net profit per unit is based on a net profit forthe seventeen months to 31/12/2006 of R875 932 000 (twelvemonths to 31/07/2005: R544 708 000) for the Group andR875 381 000 (2005: R543 689 000) for the Fund and725 183 772 (2005: 725 183 772) units in issue during the period.

Group Group Seventeen Seventeen Twelve Twelve


R000 CPU* R000 CPU*Restated Restated

15. HEADLINE EARNINGS PER UNIT

The calculation of headline earnings per unit is based on headlineearnings for the seventeen months to 31/12/2006 ofR284 468 000 (twelve months to 31/07/2005: R184 901 000) forthe Group and R284 027 000 (2005: R186 797 000) for the Fund and725 183 772 (2005: 725 183 772) units in issue during the period.

Reconciliation of earnings, headline earnings and distribution attributableto unitholders:

Net profit for the period 875 932 120,79 544 708 75,11Adjustments for:Capital deficit/(surplus) on disposal of properties 2 091 (1 154)Write-up on revaluation of investment properties net of taxation (593 555) (358 653)Headline earnings 284 468 39,23 184 901 25,50Surplus on revaluation of interest rate swap derivative (1 602) (514)Net transfer from maintenance reserves - 2 034 Unclaimed distributions written back 323 - Adjusted for straight line rental adjustment net of taxation (7 619) (1 499)Distributable income 275 570 184 922 Distribution attributable to unitholders 275 570 38,00 184 922 25,50

40



at 31 December 2006

15. HEADLINE EARNINGS PER UNIT (continued) Fund Fund

Seventeen Seventeen Twelve Twelve months to months to months to months to

31/12/2006 31/12/2006 31/07/2005 31/07/2005R000 CPU* R000 CPU*

Restated Restated

Net profit for the year 875 381 120,71 543 689 74,97Adjustments for:Capital deficit on disposal of properties 2 468 724 Write-up on revaluation of investment properties net of taxation (593 822) (357 616)Headline earnings 284 027 39,17 186 797 25,76Surplus on revaluation of interest rate swap derivative (1 602) (514)Unclaimed distributions written back 323 - Adjusted for straight line rental adjustment net of taxation (7 178) (1 361)Distributable income 275 570 184 922 Distribution attributable to unitholders 275 570 38,00 184 922 25,50

* Cents per unit Group Fund

Seventeen Twelve Seventeen Twelve months to months to months to months to

31/12/2006 31/07/2005 31/12/2006 31/07/2005R000 R000 R000 R000

Restated Restated16. DISTRIBUTION PER UNIT

Available for distribution- R000 275 570 184 922 275 570 184 922- Cents per unit 38,00 25,50 38,00 25,50

Distributions declared (cents per unit): 38,00 25,50 38,00 25,50No. 22 declared 23 February 2006 (No. 20, 1 March 2005) 12,50 12,50 12,50 12,50No. 23 declared 24 August 2006 (No. 21, 30 July 2005) 13,50 13,00 13,50 13,00No. 24 declared 20 December 2006 12,00 - 12,00 -

17. OPERATING LEASE INCOME

The minimum future lease payments receivable under non-cancellable operating leases are as follows:

Not later than 1 year 279 875 210 853 249 734 186 581Before straight line rental adjustment 274 416 212 845 244 789 187 373Straight line rental adjustment 5 459 (1 992) 4 945 (792)Later than 1 year and not later than 5 years 615 246 430 984 548 597 394 267Before straight line rental adjustment 659 406 466 954 587 033 426 839Straight line rental adjustment (44 160) (35 970) (38 436) (32 572)Later than 5 years 160 854 139 921 146 579 131 031Before straight line rental adjustment 188 866 160 554 171 350 148 747Straight line rental adjustment (28 012) (20 633) (24 771) (17 716)

1 055 975 781 758 944 910 711 879

The Group enters into lease contracts with tenants in exchange for their use of the property.

A n n u a l R e p o r t 2 0 0 6 41


18. SEGMENT RESULTS 2006

Business segment Industrial Office Retail Corporate GroupR000 R000 R000 R000 R000

Income statement

Rental income 241 593 44 854 98 639 - 385 086Straight line rental adjustment (1 412) 105 9 422 - 8 115Revenue 240 181 44 959 108 061 - 393 201

Net property income 218 286 35 940 98 776 - 353 002Interest received - - - 6 900 6 900Interest paid - - - (50 127) (50 127)Surplus on revaluation of interest rateswap derivative - - - 1 602 1 602Fund expenses - - - (26 413) (26 413)Deferred taxation on straight linerental adjustment 753 137 (1 386) - (496)Capital (deficit)/surplus on disposalof investment properties (987) (2 426) 1 322 - (2 091)Write-up on revaluation of investmentproperties net of taxation 405 872 53 468 134 215 - 593 555Net profit attributable to unitholders 623 924 87 119 232 927 (68 038) 875 932

Balance sheet

Investment properties 1 781 262 377 041 801 548 - 2 959 851As per valuations 1 823 614 382 851 820 099 - 3 026 564Straight line rental adjustment (42 352) (5 810) (18 551) - (66 713)Current and other long term assets 107 319 43 514 32 525 25 510 208 868Excluding rental straight line adjustment 64 967 37 704 13 974 25 510 142 155Rental straight line adjustment 42 352 5 810 18 551 - 66 713

Totals assets 1 888 581 420 555 834 073 25 510 3 168 719

Interest bearing borrowings - - - 652 665 652 665Trade payables 8 089 2 711 7 077 11 023 28 900Taxation 15 893 525 8 130 - 24 548Distribution payable - - - 86 996 86 996Total liabilities 23 982 3 236 15 207 750 684 793 109

Acquisition and development ofinvestment properties 215 592 223 657 130 967 - 570 216

42



at 31 December 2006

18. SEGMENT RESULTS 2006 (continued)

Geographical segment Gauteng KwaZulu Western Corporate TotalNatal Cape

R000 R000 R000 R000 R000

Rental income 147 459 195 244 42 383 - 385 086Straight line rental adjustment 5 458 4 507 (1 850) - 8 115Revenue 152 917 199 751 40 533 - 393 201

Investment properties 1 160 180 1 478 819 320 852 - 2 959 851As per valuations 1 185 262 1 510 152 331 150 - 3 026 564Straight line rental adjustment (25 082) (31 333) (10 298) - (66 713)Current and other long term assets 76 362 87 855 19 141 25 510 208 868Excluding rental straight line adjustment 51 280 56 522 8 843 25 510 142 155Rental straight line adjustment 25 082 31 333 10 298 - 66 713

Totals assets 1 236 542 1 566 674 339 993 25 510 3 168 719


SEGMENT RESULTS 2005


Income statement

Rental income 150 943 24 255 63 888 - 239 086Straight line rental adjustment (1 166) (361) 3 083 - 1 556Revenue 149 777 23 894 66 971 - 240 642

Net property income 131 247 16 386 57 418 - 205 051Interest received 2 079 390 293 1 678 4 440Interest paid - - - (15 805) (15 805)Surplus on revaluation of interest rateswap derivative - - - 514 514Fund expenses - - - (9 242) (9 242)Deferred taxation on straight line rentaladjustment (80) 23 - - (57)Capital (deficit)/surplus on disposal ofinvestment properties 2 776 (121) (901) (600) 1 154Write-up on revaluation of investmentproperties net of taxation 281 660 25 085 51 908 - 358 653Net profit attributable to unitholders 417 682 41 763 108 718 (23 455) 544 708

A n n u a l R e p o r t 2 0 0 6 43


18. SEGMENT RESULTS 2005 (continued)


Balance sheet


Totals assets 1 297 270 162 718 543 437 64 340 2 067 225

Interest bearing borrowings - - - 155 000 155 000Interest rate swap derivative - - - 1 602 1 602Trade payables 1 553 2 929 2 443 18 813 25 738Taxation 14 451 420 797 - 15 668Distribution payable - - - 94 292 94 292Total liabilities 16 004 3 349 3 240 269 707 292 300


Geographical segment Gauteng KwaZulu Western Corporate TotalNatal Cape

R000 R000 R000 R000 R000

Rental income 83 534 131 974 23 578 - 239 086Straight line rental adjustment (1 051) 608 1 999 - 1 556Revenue 82 483 132 582 25 577 - 240 642


Totals assets 700 103 1 097 049 205 733 64 340 2 067 225


44



at 31 December 2006

Group Seventeen Twelve

months to months to 31/12/2006 31/07/2005 R000 R000

Restated20. RELATED PARTY TRANSACTIONS

The following entities are considered related parties to the Fund and Group:

PARTY CONCERNED TRANSACTION TYPE

Amounts expensed to the income statement

SA Corporate Real Estate Fund Managers Limited Service fee, including a portionof value added taxation * 16 280 8 639

Old Mutual Property Group (Pty) Ltd, including itswholly owned subsidiary Marriott Property Services(Pty) Ltd Property administration fees 13 485 8 419

Accounting and secretarial fees 5 848 4 037Leasing commissions 7 512 1 913Disposal commissions, acquisitionand development fees 2 763 4 476

Nedbank Limited Interest paid on loans 50 127 1 231Bank charges 496 -Sponsor fees 40 -

Marriott Insurance Consultants, a division of theOld Mutual Property Group (Pty) Ltd Property insurance 3 342 2 456

19. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

Financial instruments reflected on the balance sheet include cash and bank balances, trade and other receivables, trade andother payables, interest rate swap derivative, shares and loans to property-owning subsidiary companies. In the normal courseof operations, the Group is exposed to credit risk, liquidity risk and interest rate risk. In order to manage these risks the Groupmay enter into transactions which make use of derivatives. The Group does not speculate in or engage in the trading of derivativeinstruments.

• Credit risk managementThe Group's financial assets that are potentially subject to credit risk include cash resources and trade and other receivables.The credit risk attached to the Group's cash resources is minimised by its cash resources being placed with several highcredit quality financial institutions, in terms of predetermined exposure limits, using a variety of qualitative and quantitativemeasures. Credit risk with respect to trade and other receivables is limited due to the large and diverse tenant base.Management do not consider there to be any material credit risk exposure, which is not adequately provided for.

• Liquidity risk managementLiquidity risk is proactively managed by regularly assessing working capital requirements and monitoring cashflows, whilstensuring surplus cash is invested in a manner to achieve maximum returns.

• Interest rate risk managementInterest rate movements impact on the value of the Fund's short-term cash investments and interest bearing borrowings.Risk in this regard is minimised by monitoring cashflows, investing surplus cash at negotiated rates and fixing interest rateson borrowings when appropriate.

A n n u a l R e p o r t 2 0 0 6 45


20. RELATED PARTY TRANSACTIONS (continued)Group

Seventeen Twelve months to months to

31/12/2006 31/07/2005 R000 R000

Restated PARTY CONCERNED TRANSACTION TYPE

Amounts credited to the income statement

Old Mutual (South Africa) Limited Group Rental income 2 587 2 504

Nedbank Limited Rental income 5 931 3 982

* SA Corporate Real Estate Fund Managers Limited sub-contracts certain of these services to OMIG(SA)-PI and remunerates them out of the fees received from SA Corporate Real Estate Fund.

Amounts owing to related parties

Nedbank Limited Long term borrowings 652 665 155 000Net interest payable 4 776 1 185

SA Corporate Real Estate Fund Managers Limited Service fees 1 066 770

Musgrave Centre, Durban, KwaZulu Natal

46

Property PortfolioAnd Investment In Fixed Property Companies

10 Top Road - Anderbolt ($)

11 Enterprise Close - Linbro Park ($)

11 Wankel Street - Jet Park ($)

111 Mimets Road - Denver ($)

120 Loper Avenue - Aeroport ($)

137 Kuschke Street - Meadowdale ($)

141 Hertz Close - Meadowdale ($)

144 Kuschke Street - Meadowdale ($)

148 Fleming Street - Meadowdale ($)


15 Spartan Crescent - Eastgate ($)


18 Covora Street - Jet Park ($)

2 Fobian Street - Boksburg ($)

2 Webb Road - Jet Park ($)

20 Commercial Street - Strydompark ($)

21 Pomona Road - Pomona ($)

27 Jet Park Road - Jet Park ($)

3 Fabriek Street - Strydom Park ($)

3 Remblok Street - Strydom Park ($)


34 Yaldwyn Road - Jet Park ($)



40 Electron Avenue - Isando ($)


54 Steel Road - Spartan ($)

57 Sarel Baard Crescent - Centurion ($)

7 Belgrade Avenue- Aeroport ($)

73 Cavaleros Drive - Germiston ($)

8 Director Drive - Aeroport ($)

85 Newton Street - Meadowdale ($)

88 Loper Avenue - Aeroport ($)

90 Electron Avenue - Isando ($)

Beryl Street - Jet Park ($)

Cnr Anvil & Industry Roads - Isando ($)

Cnr Bismuth & Graniet Streets - Jet Park ($)

Cnr Fleming St & Koornhof Rd - Meadowdale ($)

Cnr Koornhof Rd & Essex Street - Meadowdale ($)

Cnr Staal & Stephenson Road - Pretoria ($)

Longclaw Investments (Pty) Ltd

Stondell Investments (Pty) Ltd

10 Top Road

11 Enterprise Close

11 Wankel Street

111 Mimets Road

120 Loper Avenue

137 Kuschke Street

141 Hertz Close

144 & 145 Kuschke Street

148 Fleming Street

149 Fleming Street

15 Spartan Crescent

150 Fleming Street

18 Covora Street

2 Fobian Street

2 Webb Road

20 Commercial Street

21 Pomona Road

27 Jet Park Road

3 Fabriek Street

3 Remblok Street

3 Wankel Street

34 Yaldwyn Road

36 Wankel Street

Yaldwyn Road

40 Electron Avenue

5 Yaldwyn Road

54 Steel Road

57 Sarel Baard Crescent

7 Belgrade Avenue

73 Cavaleros Drive

8 Director Road

85 Newton Street

88 Loper Avenue

90 Electron Avenue

27 Beryl Street

Cnr Anvil & Industry Roads

Cnr Bismuth & Graniet Streets

Cnr Fleming St & Koornhof Road

Cnr Koornhof Rd & Essex Street

Cnr Staal & Stephenson Road

20 Eloff Street

684 Pretoria Main Road

Anderbolt

Linbro Business Park

Jet Park

Denver

Aeroport Industrial Estate

Meadowdale

Meadowdale

Meadowdale

Meadowdale

Meadowdale

Eastgate

Meadowdale

Jet Park

Boksburg

Jet Park

Strydom Park

Pomona

Jet Park

Strydom Park

Strydom Park

Jet Park

Jet Park

Jet Park

Jet Park

Isando

Jet Park

Spartan

Centurion


Germiston


Meadowdale


Isando

Jet Park

Isando

Jet Park

Meadowdale

Meadowdale

Pretoria

Johannesburg

Wynberg

6,320

4,414

16,905

32,779

10,111

2,820

6,694

4,798

2,652

3,382

5,671

3,180

10,498

12,047

6,009

12,000

20,229

55,256

6,992

3,084

7,391

7,758

16,800

59,759

28,959

41,194

9,921

80,999

3,525

13,436

6,948

5,600

10,953

13,078

127,418

67,316

4,005

5,471

20,931

43,968

1,858

6,324

2,270

1,913

6,724

18,051

3,575

1,541

3,616

3,006

1,417

2,090

2,502

1,835

4,638

5,258

1,859

6,588

4,585

14,211

4,261

1,787

2,591

4,000

5,090

30,197

13,171

17,552

5,534

34,460

1,535

8,408

3,900

2,947

7,711

5,303

12,509

13,607

1,800

3,060

9,783

28,538

1,481

2,551

18

60

37

28

35

54

27

26

31

26

37

28

25

24

27

23

33

27

24

39

34

22

21

34

26

24

51

25

35

16

26

27

24

26

28

16

22

31

22

13

20

19

706

1,937

4,274

6,028

2,119

1,402

1,679

1,321

735

932

1,553

877

1,971

2,170

848

1,809

2,591

6,638

1,723

1,173

1,506

1,517

1,857

17,398

5,929

6,768

4,828

14,536

910

2,241

1,696

1,352

3,118

2,382

6,050

3,775

670

1,622

3,617

1,525

508

842

4,200

14,500

20,500

57,200

12,500

8,500

12,700

9,000

4,800

6,300

6,790

6,200

10,800

17,000

4,200

13,500

18,400

34,900

8,900

6,200

7,500

12,000

10,800

120,200

39,000

49,300

17,028

116,000

5,500

16,600

11,200

9,100

25,200

19,900

43,500

20,900

5,300

9,100

26,000

34,329

1,500

5,100

Industrial - Gauteng

Sector/Region/Property company/name

Property address Location Site area(m2)

Rentablearea (m2)

Weightedaverage

rental per m2

(beforestraight line

rentaladjustment)

R

Total rental(before

straight linerental

adjustment)R000

Valuation at31/12/2006

R000

A n n u a l R e p o r t 2 0 0 6 47


Chemfit Industrial Holdings (Pty) Ltd

Altech Data (Pty) Ltd

Kennametals SA (Pty) Ltd, AIMS & others

Auto Parts Distributors (Pty) Ltd

OCS a Division of UTI Logistics

Essilor South Africa (Pty) Ltd

Galactex Outdoor (Pty) Ltd

Karcher (Pty) Ltd & Pyramid PC Technic CC

Associated Independant Bakeries (Gauteng) (Pty) Ltd

Mahogany Furnishers CC

Toyota SA Motors (Pty) Ltd, Techno 2K CC

Stonehouse Graphics (Pty) Ltd

Sandvik Mining & Construction (Pty) Ltd & others

P G Bison Ltd

Continental China (Pty) Ltd

Cobra Watertech (Pty) Ltd

Rohlig Grindrod (Pty) Ltd

Babcock Africa Services (Pty) Ltd, Bustruck Marketing

Services & The Pumphouse CC

Kool Aluminium (Pty) Ltd

Formula Panelbeaters C.C.

Lectrolite (A Division of Imperial Group (Pty) Ltd)

Masstores (Pty) Ltd

Hansen Transmissions (A Division of Invensys SA (PLD))

Supply Chain

Bax Global (Pty) Ltd, Prompt Pac & others

Pickpack Grindrod (Pty) Ltd & Unilver Foods South Africa

(Pty) Ltd

Golden Neolife Diamite International (Pty) Ltd

Fuel Logistics Group & Pharmaceutical Healthcare

Steiner Hygiene (Pty) Ltd

Hyundai Automotive SA (Pty) Ltd

Berco Express (Pty) Ltd

RAM Transport (S A) (Pty) Ltd

Sapphire Logistics (Pty) Ltd & Iliad Africa Trading

(Pty) Ltd

Premier Freight (Pty) Ltd

Bell Equipment Company SA (Pty) Ltd

CSE Equipment Company (Pty) Ltd, Moby Industrial &

MD Plant & Equipment Sales (Pty) Ltd

K & M Signs (Pty) Ltd

Daikin Industries Ltd & Africa Homerite

Chemical Services Ltd

Nampak Tissue (Pty) Ltd & Biddulphs Removals & Storage

SA

Eros Auto Dealers (Pty) Ltd

Frankipile Africa (Pty) Ltd

Offices & Warehousing

Offices & Hi-Tech Workshops

Offices, Workshops & Warehousing








Offices, Factory & Warehousing







Offices & Workshops


Offices & Workshops


Warehousing

Offices, Workshops & Warehousing




Warehousing, Offices & Showrooms








Offices, Warehousing & Workshop

Offices, Warehousing & Workshop

Offices & Workshops


Office & Warehousing

Office & Warehousing

Showrooms & Workshops


Triple Net

Triple Net

Gross

Triple Net

Triple Net

Triple Net

Net

Gross

Gross

Gross

Gross

Gross

Gross

Triple Net

Gross

Triple Net

Triple Net

Triple Net

Triple Net

Gross

Triple Net

Gross

Triple Net

Triple Net

Gross

Triple Net

Triple Net

Triple Net

Gross

Triple Net

Gross

Gross

Gross

Gross/Net

Triple Net

Triple Net

Gross

Gross

Gross

Net

Net

Triple Net

Gross

10

2 Ord 9 800 "A"

31/07/98

16/04/03

31/07/98

29/12/05

21/02/96

20/06/01

20/06/01

20/06/01

20/06/01

20/06/01

31/07/98

20/06/01

31/07/98

31/10/97

31/07/98

14/12/05

05/12/02

25/04/97

31/07/98

31/07/98

31/07/98

31/07/98

31/07/98

17/09/03

20/06/01

19/08/05

31/07/98

31/03/03

31/07/98

31/07/98

31/07/98

20/06/01

21/10/03

22/10/96

27/09/95

31/07/98

31/07/98

20/06/01

16/08/05

31/08/06

31/07/98

31/07/98

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

508,033

2,211,210

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

950,148

2,783,006

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

1,458,181

4,994,216

0.06%

0.21%

Major tenant/s Usage Type oflease

Number ofsharesissued

Date ofacquisition

Investment inshares

R

Investment inloans

R

Total

R

% ofFund

48

Property PortfolioAnd Investment In Fixed Property Companies (continued)

1 Circuit Road - Westmead ($)

1 Irvine Bell Drive - Empangeni ($)

1/5 Stockville Road - Westmead ($)

11 Coconut Grove - Shakashead ($)

11 Columbine Place - Red Hill ($)

121 Malacca Road - Red Hill ($)

14/24 Mahoganyfield Way - Springfield Park ($)

145/149 Crompton Street - Pinetown ($)

147/149 Old Main Road - Pinetown ($)

153 Old Main Road - Pinetown ($)

155/157 Old Main Road, Pinetown ($)

16/18 Milne Street - Durban ($)

17 Young Road - Pinetown ($)

167 Old Main Road - Cowies Hill ($)

20 Kyalami Road - Pinetown ($)

24 Westmead Road - Westmead ($)

264 Aberdare Drive - Phoenix ($)

27/36 Siphosethu Road - Mt Edgecombe ($)

28 Goodwood Road - Mahogany Ridge ($)

30/34 Hillclimb Road - Mahogany Ridge ($)

33 Surprise Road - Pinetown ($)

33/37 Aloefield Crescent - Springfield Park ($)

35 Circuit Road - Westmead ($)

5 Westgate Place - Westmead ($)

51 Ohrtmann Road - Pietermaritzburg ($)

6 Cedarfield Close - Springfield Park ($)

6 Lanner Road - New Germany ($)

6/8 Mahogany Road - Mahogany Ridge ($)

89 Flanders Drive - Mount Edgecombe ($)

9 Henwood Road - Pinetown ($)

9/15 Lanner Road - New Germany ($)

Blue Heron Investments (Pty) Ltd (#)

Button Quail Investments (Pty) Ltd

Cnr Gillitts & Young Roads - Pinetown ($)

Dune Lark Investments (Pty) Ltd (#)

Erf 84/85/86 Shakas Head (Pty) Ltd

Forktailed Drongo Investments (Pty) Ltd

Grey Heron Investments (Pty) Ltd (#)

Rock Kestrel Investments (Pty) Ltd (#)

Suffert Street - Pinetown ($)

1 Circuit Road

1 Irvine Bell Drive

1-5 Stockville Road

11 Coconut Grove

11 Columbine Place

121 Malacca Road

14 Mahoganyfield Way

145/149 Crompton Street

147/149 Old Main Road

153 Old Main Road

155/157 Old Main Road

16 Milne Street

17 Young Road

167 Old Main Road

20 Kyalami Road

24 Westmead Road

264 Aberdare Drive

27/36 Siphosethu Road

28 Goodwood Road

30/34 Hillclimb Road

2 Hilltop Park, 33 Surprise Road

33/37 Aloefield Crescent

35 Circuit Road

5 Westgate Place

51 Ohrtmann Road

6 Cedarfield Close

6 Lanner Road

6/8 Mahogany Road

89 Flanders Drive

9 Henwood Road

9-15 Lanner Road

Cnr Shadwell & Jenkyn Roads

Cnr Fourth Street & Tanner Road

Cnr Gillitts & Young Roads

34 Shadwell Road

15 Coconut Grove

5 Quality Street

137 Johnston Road

Shadwell Road

Suffert Street

Westmead

Empangeni

Westmead

Shakashead

Red Hill

Red Hill

Springfield Park

Pinetown

Pinetown

Pinetown

Pinetown

Durban

Pinetown

Cowies Hill

Pinetown

Westmead

Phoenix

Mount Edgecombe

Mahogany Ridge

Mahogany Ridge

Pinetown

Springfield Park

Westmead

Westmead

Pietermaritzburg

Springfield Park

New Germany

Mahogany Ridge

Mount Edgecombe

Pinetown

New Germany

Maydon Wharf

Empangeni

Pinetown

Maydon Wharf

Shakashead

Mobeni

Maydon Wharf

Maydon Wharf

Pinetown

5,478

12,788

20,033

1,254

21,172

7,565

7,263

480

12,950

9,044

14,576

748

8,942

4,885

6,838

9,952

10,000

36,363

21,409

15,966

15,894

6,804

7,024

27,828

10,380

17,137

13,240

15,173

10,479

3,228

8,260

15,703

10,254

12,354

16,779

24,537

4,366

7,894

14,395

33,653

2,911

2,736

8,078

453

9,947

3,526

4,986

1,898

6,186

3,394

5,858

1,246

3,970

2,642

3,052

3,542

3,648

12,130

8,823

10,181

5,931

5,672

3,967

4,504

4,652

10,105

4,364

7,245

8,473

2,204

6,960

14,587

2,896

4,616

13,091

10,705

2,814

7,394

398

13,943

23

32

24

30

23

26

24

36

45

44

33

22

18

27

21

30

21

30

33

12

20

22

20

53

15

27

25

39

25

16

22

29

30

22

22

19

16

27

294

24

1,121

1,466

3,359

231

3,904

1,586

2,005

1,155

4,775

2,523

3,242

459

1,217

1,219

1,099

1,798

1,320

6,238

4,928

2,023

2,045

2,089

1,322

4,062

1,192

4,591

1,870

4,857

3,392

609

2,552

7,119

1,456

1,714

4,918

3,413

765

3,416

1,988

5,734

6,200

9,700

19,600

1,600

24,800

10,200

12,300

6,000

33,400

16,500

17,600

2,500

7,600

8,950

6,800

8,400

8,500

43,200

29,000

17,100

15,500

12,900

8,200

24,800

6,800

31,400

13,500

34,200

25,600

5,800

14,500

45,000

9,130

12,500

34,500

27,500

4,600

22,500

10,100

32,600

Industrial - KwaZulu Natal



Rentablearea (m2)

Weightedaverage

rental per m2


rentaladjustment)

R

Total rental(before

straight linerental

adjustment)R000


R000

A n n u a l R e p o r t 2 0 0 6 49


Hudaco Trading Ltd, Brockett Engineering & others

Bell Equipment Company (SA) (Pty) Ltd

Relyant Trading (Pty) Ltd & X Press Net (Pty) Ltd

Bell Equipment Company (SA) (Pty) Ltd

Division of RTT Consumer (Pty) Ltd

Mr Price Group Ltd - Milady's

Strategic Logistical Alliance (Pty) Ltd

Turners Fleet Maintenance (Pty) Ltd & Unitrans Freight

(Pty) Ltd

NMI Durban South Motors (Pty) Ltd

Servistar (Pty) Ltd & Hyundai Automotive South Africa

(Pty) Ltd

Whirlprops 14 (Pty) Ltd

The Durban Metropolitan Council

BSN Medical (Pty) Ltd

Forest Glade Investments (Pty) Ltd & others

Fixtrade (Pty) Ltd

Avery Dennison (Pty) Ltd

J D G Trading (Pty) Ltd

TFD Network Africa (Pty) Ltd

ABB Industry (Pty) Ltd

Amalgamated Appliances (Pty) Ltd

Dowmont Snacks (Pty) Ltd

Laser Facilities (Pty) Ltd & Continental Printing Inks &

PPS (Pty) Ltd

Spunlok Bonded Textiles CC & The Wooden Lamp (Pty)

Ltd

Group Five KwaZulu Natal (Pty) Ltd & Crossroads

Distribution (Pty) Ltd

Incorporated Laboratories (Pty) Ltd

Universal Web (Pty) Ltd

Pailpac (Pty) Ltd

Astraflex (Pty) Ltd

Kempster Sedgwick (Pty) Ltd, Engen Petroleum Ltd &

others

Woodstock Boards Durban (Pty) Ltd

Sicpa (SA) (Pty) Ltd, Supaswift Express (Pty) Ltd & others

P & O Grindrod Logistics (Pty) Ltd

McCarthy Retail Ltd

Alex Bulk Carriers


Umgeni Products (Pty) Ltd

Daveglen 229 Investments (Pty) Ltd



Brits Automotive Systems (Pty) Ltd, Brits Textiles, Sanware

& Plumbing & others

Mini Factories

Offices & Workshops


Offices & Workshops




Offices, Showroom & Workshops

Offices, Showroom & Workshop

Showrooms & Wholesale Retail

Offices, Showroom & Workshops

Warehousing

Offices, Warehousing & Storage

Showroom & Workshops





Offices, Warehousing & Workshops


Offices & Factory

Offices, Warehousing & Workshops

Warehousing

Offices, Warehousing & Transport Yard

Offices & Factory

Offices, Factory & Storage

Offices & Factory

Offices & Factory

Showroom, Workshops & Offices

Offices, Warehousing & Factory

Mini Factories & Offices


Offices, Showrooms & Workshops



Offices, Warehousing & Factory



Offices & Container Yard

Industrial Complex

Gross

Triple Net

Gross

Triple Net

Net

Triple Net

Gross

Gross

Triple Net

Gross

Triple Net

Gross

Gross

Gross

Gross

Gross

Gross

Triple Net

Triple Net

Net

Gross

Gross

Gross

Triple Net

Triple Net

Triple Net

Triple Net

Triple Net

Gross

Gross

Gross

Triple Net

Triple Net

Gross

Triple Net

Triple Net

Gross

Triple Net

Triple Net

Gross

1

1

1

100

1

1

1

31/07/98

28/11/97

13/12/95

08/12/97

31/07/98

31/07/98

31/07/98

31/07/98

31/07/98

31/07/98

31/07/98

31/07/98

31/07/98

31/07/98

27/09/95

31/07/98

27/09/95

31/07/98

31/07/98

28/07/03

20/03/02

31/07/98

31/07/98

31/07/98

31/07/98

27/09/95

31/07/98

16/04/02

28/06/99

31/07/98

27/09/95

31/07/98

31/07/98

31/07/98

31/07/98

10/06/99

31/07/98

31/07/98

31/07/98

31/07/98

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

26,489,831

2,987,822

-

17,462,098

5,086,966

2,589,686

13,251,903

4,878,773

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

16,747,882

5,886,931

-

15,827,836

19,673,377

1,698,071

8,366,584

4,860,001

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

43,237,713

8,874,753

-

33,289,934

24,760,343

4,287,757

21,618,487

9,738,774

-

1.82%

0.37%

1.40%

1.04%

0.18%

0.91%

0.41%



Date ofacquisition

Investment inshares

R

Investment inloans

R

Total

R

% ofFund

50


Whimbrel Investments (Pty) Ltd

Whirlprops 25 M (Pty) Ltd (#)

Whirlprops 25 P (Pty) Ltd (#)

Widah Bird Investments (Pty) Ltd

Wood Ibis Investments (Pty) Ltd (#)

49 Teakwood Road

1 Royal Palm Avenue

59 Intersite Avenue

1 Quality Street

Methven Road

Jacobs

Umgeni Business Park

Umgeni Business Park

Mobeni

Maydon Wharf

11,099

5,613

21,753

5,170

19,150

3,758

2,489

13,322

1,778

18,060

35

43

31

17

17

2,210

1,824

7,025

504

5,310

12,400

9,700

49,600

2,600

35,000

Industrial - KwaZulu Natal (continued)



Rentablearea (m2)

Weightedaverage

rental per m2


rentaladjustment)

R

Total rental(before

straight linerental

adjustment)R000


R000

1 Marconi Street - Montague Gardens ($)

2 Nereide Street - Paarden Eiland ($)

9 Milner Road - Paarden Eiland ($)

Cnr Bridge Street and Molecule Road - Belville ($)

Cnr Giel Basson Drive & Nathan Mallach Road -

Goodwood ($)

Cnr Isotope & Bridge Streets - Bellville ($)

Tygerberg Business Park ($)

Industrial - Western Cape

1 Marconi Street

2 Nereide Street

9 Milner Road

Cnr Bridge Str & Molecule Rd

Cnr Giel Basson Drive & Nathan

Mallach Road

Cnr Isotope & Bridge Streets

Trans Karoo Street, Parow Industria

Montague Gardens

Paarden Eiland

Paarden Eiland

Bellville

Goodwood

Bellville

Parrow Industria

12,141

11,917

31,676

29,083

10,430

10,756

49,032

3,970

6,139

1,745

8,558

5,902

4,573

18,000

33

38

80

20

79

21

71

2,205

4,014

2,359

2,947

7,882

1,595

5,096

14,400

20,500

14,900

19,700

42,200

10,100

85,600

106 Johan Avenue - Sandton ($)

21 Fricker Road - Illovo ($)

36 Wierda Road West - Sandton ($)

Cnr Handel & Crownwood Roads - Ormonde ($)

Cnr Old Pretoria & Alexandra Roads - Midrand ($)

Garsfontein/Lebombo Road ($)

Stoneham (Pty) Ltd

Offices - Gauteng

106 Johan Avenue

21 Fricker Road

Wierda Road

Cnr Handel & Crown Road

Cnr Old Pretoria & Alexandra Roads

Cnr Garsfontein & Lebombo Roads

5 Autumn Street

Wierda Valley

Sandton

Wierda Valley

Ormonde

Midrand

Pretoria

Rivonia

3,965

3,718

6,575

36,072

5,857

3,966

5,525

2,270

2,733

2,977

6,131

2,828

3,340

2,545

116

110

76

53

126

67

85

4,474

4,517

3,825

5,534

1,065

1,337

3,679

20,500

29,500

18,400

29,200

40,200

26,300

14,200

110 Zastron Road, Bloemfontein ($) (^)

131 Jan Hofmeyer Road - Westville ($)

188 Berg Street - Pietermaritzburg ($)

199 North Ridge Road - Durban ($)

3 Inanda Road - Hillcrest ($)

3 The Terrace - Westway ($)

4 School Road - Pinetown ($)

40 Grey Street - Bloemfontein ($) (^)

48 Kings Road - Pinetown ($)

59 Harding Street - Newcastle ($)

8 Sookay Place - Westville ($)

Portion 4 of Erf 12445 Durban (Pty) Ltd

Portion 5 of Erf 12445 Durban (Pty) Ltd

Offices - KwaZulu Natal

110 Zastron Road, Hilton

131 Jan Hofmeyer Road

188 Berg Street

199 North Ridge Road

3 Inanda Road

No 3 The Terrace, Westway Office

Park

4 School Road

40 Grey Street

48 Kings Road

59 Harding Street

8 Sookay Place, Derby Downs Office

Park

Portion 4 of Erf 12445 Durban

Portion 5 of Erf 12445 Durban

Bloemfontein

Westville

Pietermaritzburg

Morningside

Hillcrest

Westville

Pinetown

Bloemfontein

Pinetown

Newcastle

Westville

Durban

Durban

1,985

2,661

3,400

3,765

4,088

3,017

6,941

1,147

3,237

2,023

5,806

2,140

1,528

1,978

2,160

1,948

4,648

1,674

2,235

7,246

645

2,029

295

2,978

-

-

38

71

49

77

78

90

37

38

26

39

35

454

2,622

1,636

6,052

1,565

1,204

4,577

148

896

69

104

-

-

7,200

18,900

9,700

36,600

12,640

20,500

16,000

2,300

4,352

650

29,652

2,400

3,100

A n n u a l R e p o r t 2 0 0 6 51


The Fuel Logistics Group (Pty) Ltd

Associated Motor Holdings (Pty) Ltd

Universal Print Group (Pty) Ltd

Dubyla Properties CC



Showroom & Workshops

Offices & Factory



Net

Gross

Triple Net

Gross

Triple Net

1

100

1

1

31/07/98

20/03/02

28/06/02

31/07/98

31/07/98

6,348,928

100

-

745,898

17,116,321

5,557,836

9,121,316

43,894,618

1,854,102

16,477,601

11,906,764

9,121,416

43,894,618

2,600,000

33,593,922

0.50%

0.38%

1.85%

0.11%

1.41%



Date ofacquisition

Investment inshares

R

Investment inloans

R

Total

R

% ofFund

Penny Pinchers Holdings Ltd

Grindrod J&J Logistics (Pty) Ltd

Maxvik Logistix (Pty) Ltd

Dpi Plastics (Pty) Ltd

Reeds Delta

Sandown Motor Holdings (Pty) Ltd

Fuel Group

Wholesale



Offices, Factory & Warehousing

Motor Showroom


Warehousing

Triple Net

Triple Net

Triple Net

Net

Gross

Triple Net

Triple Net

31/07/98

31/07/98

31/07/98

31/07/98

06/12/02

30/10/02

04/04/06

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Nedbank Ltd

Turner & Townsend, McCreedy Friedlander & others

Mvelapanda Management Services (Pty) Ltd, The South

Africa Property Owners Association & others

AC Nielsen Marketing and Media (Pty) Ltd

Absa Bank Limited

Kwezi V3 Engineers (Pty) Ltd

Bausch & Lomb (SA) (Pty) Ltd & Eskom

Offices

Offices

Offices

Offices

Offices

Offices

Offices

Net

Various

Gross

Gross

Triple Net

Gross

Gross 4 000

31/07/98

03/10/05

31/07/98

31/07/98

19/09/06

07/07/06

31/07/98

-

-

-

-

-

-

4,309,060

-

-

-

-

-

-

9,592,238

-

-

-

-

-

-

13,901,298 0.59%

The Office of the Auditor General

Chep South Africa (Pty) Ltd

Department of Public Works - Land Affairs

McCarthy Retail Ltd, Bosch Management Services (Pty)

Ltd & Jack Rabbits

The Standard Bank of South Africa Ltd, & others

Kwezi V3 Engineers, BP South Africa & Turner & Townsend

The Standard Bank of South Africa Ltd, Old Mutual PLC

(SA) & others

Simlab (Pty) Ltd

Enforce Electronics (Pty) Ltd & S K Heiriss Inc


Bytes Corporate Services (Pty) Ltd

Vacant Land

Vacant Land

Offices

Offices

Offices

Offices

Offices

Offices

Offices

Offices

Offices

Offices

Offices

Zoned Offices

Zoned Offices

Gross

Gross

Gross

Gross

Gross

Gross

Gross

Gross

Gross

Gross

Gross

n/a

n/a

100

100

07/07/06

31/07/98

31/07/98

31/07/98

21/12/05

07/07/06

31/07/98

07/07/06

31/07/98

07/07/06

12/12/06

27/07/99

27/07/99

-

-

-

-

-

-

-

-

-

-

-

100

100

-

-

-

-

-

-

-

-

-

-

-

2,399,900

2,895,731

-

-

-

-

-

-

-

-

-

-

-

2,400,000

2,895,831

0.10%

0.12%

52


122 Cradock Street

2 Steenbok Avenue

31 Allen Drive, Loevenstein

31 Church Street

34 Mangold Street

George

Upington

Bellville

Worcester

Port Elizabeth

1,035

1,677

2,969

1,105

1,606

309

128

3,255

211

968

44

57

70

30

70

82

44

1,367

38

407

1,300

520

20,200

550

5,000



Rentablearea (m2)

Weightedaverage

rental per m2


rentaladjustment)

R

Total rental(before

straight linerental

adjustment)R000


R000

Ermelo Game Centre ($)

Fountains Centre - Fountainbleau ($)

Highland Mews (@)($)

The Boulevard, Melville (#)

Offices - Western Cape

122 Cradock Street - George ($)

2 Steenbok Avenue - Upington ($) (±)

31 Allen Drive - Bellville ($)

31 Church Street - Worcester ($)

34 Mangold Street - Port Elizabeth ($) (±)

Cnr de Emigratie Rd & Voortrekker

Ave

Cnr Republic and Rabie Streets

Cnr Watermeyer St & Hans Strydom

Drive

Main Road

Ermelo

Randburg

Witbank

Mellville

19,144

7,138

35,267

9,907

5,760

2,353

17,019

5,538

54

86

73

85

2,480

3,427

10,499

3,760

32,500

12,200

74,850

43,400

Retail - Gauteng

24/28 Commercial Road - Amanzimtoti ($)

425 West Street ($)

Knowles Centre (@)($)

Montclair Mall (@)($)

Musgrave Centre (@)($)

The Colonial Development ($)

The Village Centre ($)

Umlazi Mega City (@)(#)

24/28 Commercial Road

425/433 West St & 412/414 Smith

Street

22 Chancery Lane

169 Wood Road

115 Musgrave Road

The Colony, 50 Old Main Road

The Village Centre

Umlazi Mega City

Amanzimtoti

Durban

Pinetown

Montclair

Durban

Hillcrest

Hillcrest

Umlazi

1,395

3,511

37,114

23,315

12,770

26,324

2,335

9,559

9,623

11,640

39,881

4,090

10,213

30,474

35

51

54

65

142

72

84

77

1,398

8,280

4,457

6,442

48,183

4,974

14,545

10,491

6,500

55,400

20,350

29,100

271,500

22,000

75,100

110,400

Retail - KwaZulu Natal

Stellenbosch Square, Stellenbosch ($)

Tokai Junction (@)($)

Retail - Western Cape

Stellenbosch Square

236 Main Road, Tokai

Stellenbosch

Tokai

34,753

25,101

10,401

7,613

67

82

11,918

5,294

62,200

35,800

Pending acquisitions

293 Hebbard Road ($)

Forest Road Design & Décor Centre ($)

293 Hebbard Road

Forest Road Design & Décor

Centre

85

1298

In the process of being wound-up

1271 South Coast Road (Pty) Ltd

Bat Hawk (Pty) Ltd

Breightmet Properties (Pty) Ltd

Centaprops 6 (Pty) Ltd & Propforum 7 (Pty) Ltd

Cnr Blauwberg & Koeberg Rd (Pty) Ltd

Glossy Ibis Investments (Pty) Ltd

LMD Investments (Pty) Ltd

Loerie Properties (Pty) Ltd

162

-51

2,328

3

1,035

1

A n n u a l R e p o r t 2 0 0 6 53




Kwezi V3 Engineers (Pty) Ltd & others


Kwezi V3 Engineers (Pty) Ltd & others

Offices

Offices

Offices

Offices

Offices

Gross

Gross

Gross

Gross

Gross

07/07/06

07/07/06

07/07/06

07/07/06

07/07/06

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-



Date ofacquisition

Investment inshares

R

Investment inloans

R

Total

R

% ofFund

Game, Maxi & others

Spar, Steers & others

Woolworths, Foschini, Truworths,

Clicks, Mr Price & others

Spar, Steers & others

Retail Centre

Retail Centre

Retail Centre

Retail Centre

Various

Gross

Various

Various 100

20/04/06

31/07/98

20/12/02

24/04/06

-

-

-

100

-

-

-

43,031,001

-

-

-

43,031,101 1.81%

The Hub

The Hub & Milady's

Spar, Peoples Pharmacy, Nedbank & others

Pick & Pay, Clicks, Ackermans, Mr Price, Bears & others

Ster Kinekor, Mr Price, Stuttafords, Woolworths, Pick 'n

Pay & others

Woolworths, Milady's, Clicks & others

Spar, Truworths, Ackermans, Mr Price & others

Woolworths, Spar, Cashbuild, Caltex & others

Stand Alone Retail

Stand Alone Retail

Retail / Offices

Retail / Offices

Retail / Offices

Retail Centre

Retail Centre

Retail Centre

Net

Triple Net

Various

Various

Various

Gross

Gross

Various 100

31/07/98

31/07/98

20/12/02

20/12/02

15/09/04

31/07/98

31/07/98

11/01/05

-

-

-

-

-

-

-

100

-

-

-

-

-

-

-

100,817,844

-

-

-

-

-

-

-

100,817,944 4.24%

100

6

114

200

100

1

100

1

21/10/99

31/07/98

31/07/98

31/07/98

07/11/96

31/07/98

31/07/98

31/07/98

100

6

114

1,661,349

1,032,393

446,414

1,951,475

881,611

-100

-6

-114

-1,661,349

-1,032,393

-446,414

-1,951,475

-881,611

-

-

-

-

-

-

-

-

Retail Centre

Retail Centre

Various

Various

26/06/03

20/12/02

-

-

Pick & Pay, Woolworths & others

Pick & Pay, Toys R Us, David Bloomberg Pharmacy &

others

90 648

-

90 648

-

54




Rentablearea (m2)

Weightedaverage

rental per m2


rentaladjustment)

R

Total rental(before

straight linerental

adjustment)R000


R000

1

11

-4

218

-

-

-

-

Natal Nightjar Investments (Pty) Ltd

Petrel Properties (Pty) Ltd A

Petrel Properties (Pty) Ltd B

Rhea Properties (Pty) Ltd

Stand 1096 Morningside (Pty) Ltd

Stand 624 Alrode (Pty) Ltd

Stand 705 Denver (Pty) Ltd

Thatcherprops (Pty) Ltd

In the process of being wound-up (continued)

13 Eton Road - Park Town

309 15th Road Randjiespark (Jhb)

Chatprops (Pty) Ltd

Cloudhill Investments

Cnr Old Paarl Road & Orion Street - Brackenfell

Milan Street (CTN) (Pty) Ltd

Quailprop Investments (Pty) Ltd

Whirlprops 25 Y (Pty) Ltd

13 Eton Road

309 15th Road

9 Summit Road, Dunkeld West

Cnr Old Paarl Road & Orion Street

12 Patrick Road

Parktown

Randjiespark

Dunkeld West

Brackenfell

Jet Park

1,368

88

16

490

835

698

75

-29

Disposal of Fund Properties

Totals 1,881,908 851,508 56 463,965 3,102,974

(@) - Indicates a 50% share in property

(#) - Indicates leasehold properties with leases expiring between 2025 and 2054

($) - Indicates properties owned directly by the Fund

(*) - Before straight line rental adjustment

(^) - Classified as KZN for reporting purposes

(±) - Classified as Western Cape for reporting purposes

Corner Old Pretoria & Alexandra Roads, Midrand, Gauteng

Disclosed in the balance sheet at as:

Investment property - at valuation

Properties classified as held for disposal

3,026,564

76,410

A n n u a l R e p o r t 2 0 0 6 55


1

1

1

200

100

100

278



Date ofacquisition

Investment inshares

R

Investment inloans

R

Total

R

% ofFund

31/07/98

31/07/98

31/07/98

31/07/98

31/07/98

31/07/98

31/07/98

2,259,448

937,971

-

1,262,015

200

3,214,121

100

278

-2,259,448

-937,971

-

-1,262,015

-200

-3,214,121

-100

-278

-

-

-

-

-

-

-

-

31/07/98

27/09/95

31/07/98

31/07/98

18/10/96

27/09/95

31/07/98

5,922 117,634,624 298,879,076 416,513,700

2,660,243,836

-48,272,468

-652,665,488

2,375,819,580

17.53%

111.97%

-2.03%

-27.47%

100.00%

Investment in property (*)

Fund net current liabilities (*)

Fund non-current liabilities (*)

Fund total capital employed (*)

40 Electron Avenue, Isando, Gauteng

56

SA Corporate Real Estate Fund Managers Limited (formerly Marriott Property Fund Managers Limited): Annual Financial Statements

Independent Auditors’ ReportTo The Unitholders Of SA Corporate Real Estate Fund Managers Limited

Report on the Financial StatementsWe have audited the annual financial statements of SA Corporate Real Estate Fund Managers Limited, which comprise the balancesheet as at 31 December 2006, the income statement, the statement of changes in equity and the cash flow statement for the 17months then ended, a summary of significant accounting policies and other explanatory notes, as set out on pages 57 to 66.

Directors' Responsibility for the Financial StatementsThe directors of SA Corporate Real Estate Fund Managers Limited are responsible for the preparation and fair presentation of thesefinancial statements in accordance with International Financial Reporting Standards, and in the manner required by the CompaniesAct, No. 61 of 1973. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparationand fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting andapplying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors' ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordancewith International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. Theprocedures selected depend on the auditors' judgement, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to theentity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by thedirectors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements present fairly, in all material respects, the financial position of SA Corporate Real Estate FundManagers Limited as at 31 December 2006, and of it’s financial performance and cash flows for the 17 months then ended in accordancewith International Financial Reporting Standards and in the manner required by the Companies Act, No. 61 of 1973.

Deloitte & ToucheRegistered Auditors

Per GD KrugerPartner16 March 2007

2 Pencarrow CrescentLa Lucia Ridge Office EstateDurban

National Executive: GG Gelink - Chief Executive, AE Swiegers - Chief Operating Officer, GM Pinnock - Audit, DL Kenney - Tax, L Geeingh - Consulting, MG Crisp - Financial Advisory, L Bam - Strategy,CR Beukman - Finance, TJ Brown - Clients & Markets, SJC Sibisi - Public Sector and Corporate Social Responsibility, NTMtubu - Chairman of the Board, J Rhynes - Deputy Chairmanof the Board

Regional Leader: GC Brazier

PKF DurbanRegistered Auditors

Per GJ AdendorffPartner16 March 2007

2nd Floor12 on Palm BoulevardGateway

GJ Adendorff, RC Alcock, RC Boulle, KJ Dall, PJDuncan, PS Gering, K Gertenbach, RJ Kelly, NMcHardy, GJ Nijhuis, AE Paruk, D Puran, MSchroeder

A n n u a l R e p o r t 2 0 0 6 57


Nature of businessThe company changed its name from Marriott Property Fund Managers Limited to SA Corporate Real Estate Fund Managers Limitedduring the period under review.

The business of the company continues to be the management of property unit trust schemes in accordance with the CollectiveInvestment Schemes Act, No. 45 of 2002.

Issued share capitalThere were no changes to the authorised and issued share capital during the financial period under review. The authorised and issuedshare capital is:

2006 2005R R

100 000 Ordinary shares of R2 each 200 000 200 0001 800 000 “A” Ordinary shares of 1 cent each 18 000 18 000

218 000 218 000

Financial reviewThe annual financial statements fully reveal the results of the company's operations for the seventeenmonths under review. International Financial Reporting Standards (IFRS) were adopted for the firsttime in the current period, and the adoption thereof has not resulted in any changes to the previouslyreported numbers.

InvestmentsThe company's beneficial ownership of units in the SA Corporate Real Estate Fund is 1 202 615 units(2005: 1 202 615 units).

DividendsThe following dividends have been declared and paid:

Dividend No. 37 (No. 33) - paid37,71 (31,68) cents per ordinary share 37 708 31 67918,85 (15,84) cents per “A” ordinary share 339 372 285 111

377 080 316 790Dividend No. 38 (No. 34) - paid47,24 (32,72) cents per ordinary share 47 239 32 71923,62 (16,36) cents per “A” ordinary share 425 147 294 472



379 034 335 857Dividend No. 41 - declared157,07 cents per ordinary share 157 070 -78,54 cents per “A” ordinary share 1 413 630 -

1 570 700 -

Directors’ Report31 December 2006

58


Directors’ Report (continued)

31 December 2006

DirectorateThe following acted as directors during the period under review:

Date appointed Date resigned

DirectorA J Ardington 7 July 2006C J EwinK J ForbesI M GrovesA M Hyatt 7 July 2006B M Kodisang 7 July 2006I N MkhariR R PerkinE S SeedatM I WyndhamC S Young 7 July 2006

Alternate directorM J R Anderson 7 July 2006M A Mun-Gavin 7 July 2006L C Tapping

Post balance sheet events and going concernThe directors are not aware of any material post balance sheet events and are of the opinion that the company has adequate resourcesto continue in operation for the foreseeable future. The financial statements have accordingly been prepared on a going concern basis.

Company secretaryThe secretary of the company is Marriott Property Services (Proprietary) Limited whose business address is:

Marriott at KingsmeadKingsmead Office ParkDurban4001

and whose postal address is:

P O Box 207Durban4000

Corner Garsfontein & Lebombo Roads, Pretoria, Gauteng

A n n u a l R e p o r t 2 0 0 6 59


Balance Sheetat 31 December 2006

2006 2005Note R000 R000

Assets

Non-current assetsInvestment in property fund units 6 4 089 3 500

Current assetsTrade and other receivables 1 161 820Cash and cash equivalents 7 3 878 1 832

5 039 2 652

Total assets 9 128 6 152

Equity and liabilitiesCapital and reservesShare capital 8 218 218Share premium 9 1 782 1 782Non-distributable reserve 10 1 794 1 290Distributable reserve 8 8

3 802 3 298

Non-current liabilitiesDeferred taxation liability 11 323 229

Current liabilitiesTrade and other payables 2 049 1 674Current tax liabilities 1 383 615Shareholders for dividend 1 571 336

5 003 2 625

Total equity and liabilities 9 128 6 152

60

Seventeen Twelvemonths to months to

31/12/2006 31/07/2005 Note R000 R000

Revenue 3.6 16 705 8 922

IncomeProperty fund units 12 16 524 8 823Interest received 181 99

16 705 8 922

ExpensesAdministration expenses 1 542 865Audit fees - current year 43 37Non-executive directors' fees 599 475Management and consultancy fees 284 327Secretarial and managerial expenses 8 642 5 034

11 110 6 738

Profit before taxation and revaluation surplus 5 595 2 184

Surplus on revaluation of investment 589 794

Profit before taxation 6 184 2 978

Taxation 13 2 212 917

Profit for the period attributable to shareholders 3 972 2 061


Income Statementfor the seventeen months ended 31 December 2006

57 Sarel Baard Crescent, Centurion, Gauteng

A n n u a l R e p o r t 2 0 0 6 61


Share Share Non- Distributable Totalcapital premium distributable reserve

reserveR000 R000 R000 R000 R000

Balance at 1 August 2004 218 1 782 608 8 2 616

Profit for the period attributable to shareholders 2 061 2 061Transfer to non-distributable reserve 682 (682) -Dividends paid and declared (1 379) (1 379)

Balance at 31 July 2005 218 1 782 1 290 8 3 298

Profit for the period attributable to shareholders 3 972 3 972Transfer to non-distributable reserve 504 (504) -Dividends paid and declared (3 468) (3 468)

Balance at 31 December 2006 218 1 782 1 794 8 3 802

Statement Of Changes In Equityfor the seventeen months ended 31 December 2006

Seventeen Twelvemonths to months to

31/12/2006 31/07/2005 Note R000 R000

Operating activitiesCash generated by operating activities 14 4 979 1 979Interest received 181 99Distributions received 469 301Dividends paid to shareholders 15 (2 233) (1 262)Income taxation paid (1 020) (537)Secondary taxation on companies paid (330) (143)

Net cash flow from operating activities 2 046 437

Cash and cash equivalents at beginning of period 1 832 1 395

Cash and cash equivalents at end of period 7 3 878 1 832

Cash Flow Statementfor the seventeen months ended 31 December 2006

62

1. GENERAL INFORMATION

SA Corporate Real Estate Fund Managers Limited is a public company incorporated in South Africa. The address of its registeredoffice and principal place of business, together with its principal activities, are disclosed and described in the Directors' Report.

2. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

In the current period the company has adopted all of the new and revised Standards and Interpretations issued by the International Accounting Standards Board (the IASB) and the International Financial Reporting Interpretations Committee (IFRIC)of the IASB that are relevant to its operations and effective for accounting periods beginning on or before 1 August 2005.

3. ACCOUNTING POLICIES

The annual financial statements have been prepared in accordance with International Financial Reporting Standards. The accounting policies used in the preparation of the financial statements are consistent with those applied in the prior year.

The principal accounting policies are set out below:

3.1 InvestmentsThe company's investments are initially recognised at cost and are stated at fair value at each reporting date. Gains or lossesarising from changes in the fair value or disposal are reflected in the income statement in the period in which they arise. Gainsare transferred to a non-distributable reserve in the statement of changes in equity. Losses are transferred to a non-distributablereserve to the extent that the decrease does not exceed the amount held in the non-distributable reserve.

3.2 TaxationIncome tax expense comprises the sum of current tax payable, secondary tax on companies and deferred taxation. Taxableprofit differs from accounting profit as it excludes income or expenses that are taxable or deductible in other years and it excludesitems never deductible or taxable.

Deferred taxation is provided for using the balance sheet liability method based on temporary differences. Temporary differencesare differences between the carrying amounts of assets and liabilities for financial reporting purposes and their taxation bases.Deferred taxation is charged to the income statement except to the extent that it relates to a transaction that is recogniseddirectly in equity, or a business combination that is an acquisition. A deferred taxation asset is recognised to the extent that itis probable that future taxable profits will be available against which the associated unused tax losses and deductible temporarydifferences can be utilised. Deferred taxation assets are reduced to the extent that it is no longer probable that the relatedtax benefit will be realised.

Deferred taxation assets and liabilities are not recognised if the temporary differences arise from goodwill, or from the initialrecognition (other than business combinations) of other assets and liabilities in a transaction which effects neither the taxableprofit nor the accounting profit.

Deferred taxation is raised at the company tax rate on all temporary differences, excluding the revaluation of its investments,which are computed using the capital gains tax rate.

3.3 ImpairmentThe carrying amount of the company's assets is reviewed at each balance sheet date to determine whether there is any indicationof impairment. An impairment loss is recognised in profit or loss whenever the carrying amount of an asset exceeds its recoverableamount, which is the higher of an asset's net selling price and value in use. Whenever an impairment loss is subsequentlyreversed (except for goodwill), the carrying amount of the asset is increased to the extent that the increased carrying amountdoes not exceed the original carrying amount. A reversal of impairment loss is recognised immediately in profit or loss (exceptfor goodwill).

3.4 Financial instrumentsA financial asset or financial liability is recognised on the balance sheet for as long as the company is party to the contractualprovisions of the instrument.

Cash and cash equivalentsCash and cash equivalents comprise cash on hand and deposits held on call with banks.


Statutory Information And Notesat 31 December 2006

A n n u a l R e p o r t 2 0 0 6 63


3.4 Financial instruments (continued)Trade and other receivablesTrade and other receivables originated by the company are held at amortised cost, using the effective interest rate method,after deducting accumulated impairment losses. Receivables with no fixed maturity date are held at cost.

InvestmentsInvestments are initially recognised at cost, including directly attributable transaction costs. Subsequent to initial recognitionthese instruments are measured as follows: - Held-to-maturity investments are held at amortised cost using the effective interest rate method after deducting accumulated impairment losses. - At fair value through profit or loss and available for sale investments are held at fair value. Gains or losses are

recognised in net profit for the period.

Financial liabilities and equityFinancial liabilities and equity instruments issued by the company are classified according to the substance of the contractualarrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is anycontract that evidences a residual interest in the assets of the company after deducting all its liabilities. The accounting policiesadopted for specific financial liabilities and equity instruments are set out below:

Equity instrumentsEquity instruments issued by the company are recorded at the proceeds received net of direct issue costs.

Trade payablesTrade payables are carried at the fair value of the consideration to be paid in the future for goods and services that have beenreceived or supplied and invoiced or formally agreed with the supplier.

3.5 ProvisionsProvisions are recognised when the company has a present legal or constructive obligation as a result of past events for whichit is probable that an outflow of economic benefits will occur and where a reliable estimate can be made of the settlementamount of the obligation.

3.6 Revenue recognitionRevenue comprises service fees receivable, income from investments and interest income and is recognised when the right toreceive payment is established.

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated and are based on historical experience as adjusted for current marketconditions and other factors.

The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,seldom equal the related actual results. There are no estimates or assumptions that have a significant risk of causing a materialadjustment to the carrying amounts of assets and liabilities within the next financial year.

5. NEW ACCOUNTING STANDARDS AND IFRIC INTERPRETATIONS

Certain new additional accounting standards and IFRIC interpretations have been published that are mandatory for accountingperiods beginning on or after 1 January 2006. These new standards and interpretations have not been early adopted by thecompany. The directors do not expect that the adoption of the standards and interpretations will have a material impact onfuture financial statements. The standards and interpretations in issue, but not yet effective, that are relevant to the companyare:IFRS 7: Financial Instrument DisclosuresIFRIC 10: Interim Reporting and Impairment

64


Statutory Information And Notes (continued)

at 31 December 2006

2006 2005R000 R000

6. INVESTMENT IN PROPERTY FUND UNITS

SA Corporate Real Estate Fund1 202 615 (2005: 1 202 615) units in SA Corporate Real EstateFund at carrying value at beginning of period 3 500 2 706Surplus on revaluation of units 589 794

Market value at end of period 4 089 3 500

7. CASH AND CASH EQUIVALENTS

Cash on call 3 860 1 820Current accounts 18 12

3 878 1 8328. SHARE CAPITAL

Authorised and issued100 000 Ordinary shares of R2 each 200 2001 800 000 “A” Ordinary shares of 1 cent each 18 18

218 2189. SHARE PREMIUM

Arising on the issue of 1 800 000 “A” Ordinary shares 1 782 1 782

10. NON-DISTRIBUTABLE RESERVE

Balance at beginning of the period 1 290 608Revaluation of investments net of deferred capital gains taxation 504 682

Balance at end of the period 1 794 1 290

Comprising:Capital profit arising on the sale of Marriott Property Equity UnitTrust units 33 33Surplus arising on the revaluation of investments net ofdeferred capital gains taxation 1 761 1 257

1 794 1 29011. DEFERRED TAXATION LIABILITY

Balance at beginning of the period 229 119Charged to the income statement 94 110

Balance at end of the period 323 229

Temporary differences comprise of:Prepayments 25 16Deferred taxation on revaluation of investments 298 213

323 229

A n n u a l R e p o r t 2 0 0 6 65


2006 2005R000 R000

12. INCOME FROM PROPERTY FUND UNITS

Income from SA Corporate Real Estate Fund:Service fee 16 055 8 522Distributions received 469 301

16 524 8 82313. TAXATION

South African normal taxation- Taxation on income - Current 1 683 635 - Deferred 94 110- Taxation on dividends - Secondary taxation on companies 435 172

2 212 917

% %Reconciliation of effective tax rate:Statutory rate 29,0 29,0Secondary taxation on companies 7,0 5,8Capital gains taxation (1,4) (4,0)Prior year adjustments 0,1 0,0Non-deductible expenses 1,1 0,0

Effective rate 35,8 30,8

14. CASH GENERATED BY OPERATING ACTIVITIES

Cash receipts from service fees 15 714 8 315 Service fees 16 055 8 522 Increase in accounts receivable (341) (207)

Cash paid to suppliers (10 735) (6 336) Expenses (11 110) (6 738)

Increase in accounts payable 375 402

Cash generated from operations4 979 1 979

15. DIVIDENDS PAID TO SHAREHOLDERS

Balance at beginning of the year (336) (219)Charged to the statement of changes in equity (3 468) (1 379)Balance at end of the year 1 571 336

(2 233) (1 262)

66


Statutory Information And Notes (continued)

at 31 December 2006

2006 2005R000 R000

16. CAPITAL RESOURCES

The management company's capital resources employed or immediately availablefor employment for the purpose of the Collective Investment Scheme at the periodend amounted to 3 802 3 298

17. REVIEW OF STOCK EXCHANGE PRICES

A review of the stock exchange prices and volumes traded of SA Corporate units is set out on page 20.

18. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

The company's financial instruments consist primarily of cash deposits with banks, investments, trade and other receivables and payables. All these financial instruments are carried at cost or amortised cost with the exception of the company's investmentwhich is carried at fair value.

In the normal course of its operations, the company is inter alia exposed to credit, interest rate, liquidity risk and price risk. Inorder to manage these risks, the company may enter into transactions which make use of derivatives. The company does not speculate in or engage in the trading of derivative instruments.

Credit riskThe company's financial assets that are potentially subject to credit risk include cash deposits with banks and trade and other receivables. The credit risk attached to the company's cash deposits is minimised by its cash deposits only being placed with reputable financial institutions. Credit risk with respect to trade and other receivables is limited.

Interest rate riskThe company is exposed to interest rate risk in respect of its short-term cash investments, which can impact on the cash flowsof these instruments. The exposure to interest rate risk is managed through monitoring cash flows and investing surplus cash at negotiated rates which enables the company to maximise returns while minimising risks.

Liquidity riskThe company proactively manages its liquidity risk by regularly assessing cash requirements and monitoring cashflows, whilst ensuring surplus cash is invested in a manner to achieve maximum returns.

Price riskPrice risk arises from the risk of an adverse effect on the carrying value of the company's investment resulting from fluctuationsin the quoted price of the equity.

19. RELATED PARTY TRANSACTIONS

Related party transactions are concluded on an arm's length basis in the normal course of business. Details of material transactionswith those related parties that took place during the period under review are summarised below:

2006 2005Party concerned Transaction type R000 R000

SA Corporate Real Estate Fund Service fee 16 055 8 522

Marriott Property Services (Pty) Ltd Secretarial and management fees (8 642) (5 034)

A n n u a l R e p o r t 2 0 0 6 67


SA Corporate Real Estate Fund(formerly Martprop Property Fund)(Incorporated in the Republic of South Africa)Share Code: SAC ISIN Code: ZAE000083614A Collective Investment Scheme in propertyregistered in terms of the Collective Investment Schemes Control Act, No. 45 of 2002 and managed bySA Corporate Real Estate Fund Managers Limited(formerly Marriott Property Fund Managers Limited)(Registration number 1994/009895/06)

PLEASE TAKE NOTICE that the 7th Annual General Meeting of SA Corporate will be held in The Conference Room, Marriott at Kingsmead,Kingsmead Office Park, Durban at 15h00 on Wednesday, 23 May 2007

AGENDA

1. Notice convening the Meeting

2. Apologies

3. Confirmation of the minutes of the 6th Annual General Meeting held on 31 October 2005

4. Report of the Chairman of SA Corporate Real Estate Fund Managers Limited (formerly Marriott Property Fund Managers Limited),(“SA Corporate Fund Managers”), incorporating SA Corporate

5. Resolutions

5.1 To receive the Annual Financial Statements for the seventeen months ended 31 December 2006 including the Chairman'sreport, the Management Company's report and the report of the Auditors thereon.

5.2 To re-elect and confirm the appointment of directors in accordance with the provisions of the Articles of Association of SA Corporate Fund Managers, as nominated by unitholders of SA Corporate. Such elections will be moved in a single motion, if a resolution that it be so moved is first agreed, without any vote being cast against it. Otherwise motions for re-election will be moved individually. The director that was nominated by unitholders and appointed at the last AnnualGeneral Meeting is Mr MI Wyndham. Mr MI Wyndham, being eligible, has indicated that he is available for re-election. Any new appointment is subject to approval by the Registrar of Collective Investment Schemes.

6. To transact any other business which may be transacted at an Annual General Meeting

7. General

SA CORPORATE REAL ESTATE FUND MANAGERS LIMITED,MARRIOTT PROPERTY SERVICES (PTY) LTD(COMPANY SECRETARY)12 March 2007

Notice Of Annual General Meeting

68

SA Corporate Real Estate Fund (“SA Corporate” or “the Fund”)(formerly Martprop Property Fund)(Share Code: SAC ISIN Code: ZAE000083614)

1. A unitholder (certificated or own name dematerialised unitholder) entitled to attend and vote is entitled to appoint a proxy to attend, speak, vote, and on a poll, vote in his stead, and such proxy need not also be a unitholder of SA Corporate.

2. A SA Corporate unitholder entitled to attend and vote at the General Meeting is entitled to appoint one or more proxies to attend,speak and vote in his/her stead. A proxy need not be a member of the Fund. For the convenience of registered certificated SACorporate unitholders or SA Corporate unitholders who have dematerialised their SA Corporate units with own-name registration,a form of proxy is attached hereto. Duly completed forms of proxy must be lodged at the registered office of the Fund or at the transfer secretaries at the addresses below by no later than 15h00 on Monday, 21 May 2007.

SA Corporate unitholders who have dematerialised their SA Corporate units and have not selected own-name registration mustadvise their Central Securities Depository Participant ("CSDP") or broker of their voting instructions should they be unable to attend the General Meeting but wish to be represented thereat. Dematerialised SA Corporate unitholders without own-name registration should contact their CSDP or broker with regard to the cut-off time for their voting instructions. If, however, such members wish to attend the General Meeting in person, then they will need to request their CSDP or broker to provide them with the necessary authority in terms of the custody agreement entered into between the dematerialised unitholder and their CSDP or broker.

3. Should you wish to nominate a director a Director's Nomination Form, to be completed by the nominator and person(s) nominatedas director, can be collected from Ms P Nel at the registered office of SA Corporate.

4. The Director's Nomination form together with their Curriculum Vitae is to be lodged at the registered office of SA Corporate byno later than 16h00 on 16 May 2007.

REGISTERED OFFICEMarriott at KingsmeadKingsmead Office ParkDURBAN, 4001

Postal: PO Box 207DURBAN4000

Tel. (031) 366 1201Fax. (031) 366 1364

TRANSFER SECRETARIESComputershare Investor Services 2004 (Pty) LtdGround Floor, 70 Marshall Street,JOHANNESBURG, 2001

Postal: PO Box 61051MARSHALLTOWN2107

Tel. (011) 370 5097Fax. (011) 688 5217

Notes To Notice Of Annual General Meeting

A n n u a l R e p o r t 2 0 0 6 69



This form of proxy is for the use by SA Corporate unitholders who hold certificated SA Corporate units (“certificated SACorporate unitholders”) or who are registered as own-name in dematerialised form, (“own-name dematerialised SACorporate unitholders”) only. SA Corporate unitholders who have dematerialised their SA Corporate units, other thanwith own-name registration, are requested to contact their CSDP for a full understanding of the action required by them.

For use by certificated SA Corporate unitholders and own-name dematerialised SA Corporate unitholders, only, at the Annual GeneralMeeting of the Fund to be held at The Conference Room, Marriott at Kingsmead, Kingsmead Office Park, Durban on Wednesday,23 May 2007, commencing at 15h00, or at any adjournment thereof.

I/We

(Name/s in block letters) of

(Address)

being the registered holder/s of units in SA Corporate

hereby appoint of

or failing him ofor failing him THE CHAIRMAN OF THE MEETING as my/our Proxy to attend, speak and vote for me/us and on my/our behalf at theAnnual General Meeting of SA Corporate to be held on WEDNESDAY 23 MAY 2007 AT 15h00 in The Conference Room, Marriott atKingsmead, Kingsmead Office Park, and at any adjournment thereof.Unless otherwise instructed, my/our Proxy will vote or abstain as he/she thinks fit.

Proxy Form

FOR AGAINST ABSTAIN1. To receive the Annual Financial Statements for the seventeen months ended

31 December 2006 including the Chairman’s Report, the Management Company's Report and the report of the Auditors thereon.

2. To re-elect and confirm the appointment of directors in accordance with theprovisions of the Articles of Association of SA Corporate Fund Managers, as nominated by unitholders of SA Corporate. Such elections will be moved in a single motion, if a resolution that it be so moved is first agreed, without any vote being cast against it. Otherwise motions for re-election will be movedindividually. The director that was nominated by unitholders and appointed at the last Annual General Meeting is Mr MI Wyndham. Mr MI Wyndham, being eligible, has indicated that he is available for re-election.

Signed at on this day of 2007

Full Names(in block letters)

Signature(s)

Assisted by (Guardian) date 2007

70


A unitholder entitled to attend and vote is entitled to appoint a Proxy to attend, speak, vote, and on a poll, vote in his stead, andsuch Proxy need not be a unitholder of SA Corporate.

REGISTERED OFFICE DETAILSPostal: PO Box 207 Marriott at Kingsmead Tel. (031) 366 1201

DURBAN Kingsmead Office Park Fax. (031) 366 13644000 DURBAN

TRANSFER SECRETARIESPO Box 61051 Computershare Investor Services Tel. (011) 370 5097MARSHALLTOWN 2004 (Pty) Ltd Fax. (011) 688 52172107 Ground Floor, 70 Marshall Street,

JOHANNESBURG, 2001

Proxy Form (continued)

INSTRUCTIONS ON SIGNING AND LODGING THE PROXY FORM

1. This form of proxy must only be used by certificated SA Corporate unitholders or own-name dematerialised SA Corporate unitholders.2. If unitholders have dematerialised their units with a CSDP or broker, other than own name dematerialised unitholders, they must arrange with

the CSDP or broker concerned to provide them with the necessary authorisation to attend the General Meeting and vote thereat or the unitholderconcerned must instruct their CSDP or broker as to how they wish to vote in this regard. This must be done in terms of the agreement enteredinto between the unitholder and the CSDP or broker concerned.

3. A SA Corporate unitholder entitled to attend and vote may insert the name of a proxy or the names of two alternative proxies of the unitholder'schoice in the space provided, with or without deleting “the Chairman of the meeting”. A proxy need not be a unitholder of the Fund. The personwhose name stands first on the form of proxy and who is present at the meeting will be entitled to act as proxy to the exclusion of those whosenames follow.

4. A SA Corporate unitholder is entitled to one vote on a show of hands and on a poll SA Corporate unitholder is entitled to one vote for each SA Corporate unit held. A SA Corporate unitholder's instructions to the proxy must be indicated by inserting the relevant number of votes exercisableby the SA Corporate unitholder in the appropriate box. Failure to comply with this will be deemed to authorise the proxy to vote or to abstain from voting at the meeting as he/she deems fit in respect of all the SA Corporate unitholders' votes.

5. A vote given in terms of an instrument of proxy shall be valid in relation to the meeting notwithstanding the death of the person granting it, or the revocation of the proxy, or the transfer of the SA Corporate units in respect of which the vote is given, unless an intimation in writing ofsuch death, revocation or transfer is received by the transfer secretaries, not less than 48 hours before the commencement of the meeting.

6. If a SA Corporate unitholder does not indicate on this form of proxy that his/her proxy is to vote in favour of or against any resolution or to abstain from voting, or gives contradictory instructions, or should any further resolution(s) or any amendment(s) which may properly be put before the meeting be proposed, the proxy shall be entitled to vote as he/she thinks fit.

7. The Chairman of the meeting may reject or accept any form of proxy which is completed and/or received, other than in compliance with thesenotes.

8. The completion and lodging of this form of proxy will not preclude the relevant SA Corporate unitholder from attending the meeting and speakingand voting in person thereat to the exclusion of any proxy appointed in terms hereof, should such SA Corporate unitholder wish to do so, subjectto the conditions stated herein.

9. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity must be attached to this form of proxy, unless previously recorded by the Fund or unless this requirement is waived by the Chairman of the meeting.

10. A minor or any other person under legal incapacity must be assisted by his/her parent or guardian, as applicable, unless the relevant documentsestablishing his/her capacity are produced or have been registered by the Fund.

11. Where there are joint holders of SA Corporate units: a. any one holder may sign this form of proxy; b. the vote(s) of the senior unitholder (for that purpose seniority will be determined by the order in which the names of SA Corporate

unitholders appear in the Fund's register of SA Corporate unitholders) who tenders a vote (whether in person or by proxy) will be accepted to the exclusion of the vote(s) of the other joint SA Corporate unitholder(s).12. Forms of proxy should be lodged with or mailed to the Fund's registered office or the transfer secretaries to be received by no later than 15h00

on Monday, 21 May 2007 (or 24 hours before any adjournment of the meeting which date, if necessary, will be notified in the press and on the JSE Limited South Africa News Service).

13. Any alteration or correction made to this form of proxy, other than the deletion of alternatives, must be initialled by the signatory/ies.

A n n u a l R e p o r t 2 0 0 6 71

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