/INTERIM RESULTS SEPTEMBER 2009

COMMENTARY

1. REVIEW OF RESULTS AND OPERATIONS

The directors of Acucap are pleased to report a distribution of 128.7 cents per linked unit for the six months ended 30 September 2009. This represents a 6.1% increase compared to the same period last year, a result achieved under difficult economic conditions. The recovery of the South African economy has been delayed, and this has placed pressure on businesses across the retail, commercial and industrial sectors. Nonetheless, Acucap’s high quality property portfolio delivered a sound performance, once again showing defensive strength. There was a lower contribution from development profits compared with the same period last year, but income from Acucap’s investment in Sycom showed pleasing growth as this source of income gradually increases to replace the diminishing profits from our development activity.

No buildings were sold in the period under review, but Acucap was pleased to acquire the remaining 50% of the Bayside Shopping Centre, announced in May 2009. Transfer took place on 21 October 2009, and Acucap now owns the whole property, which it plans to expand based on strong tenant demand in the area. The acquisition and planned extension of the centre will help to diversify Acucap’s retail portfolio, both geographically in terms of an increased Cape representation, and in terms of reducing the concentration of retail income, presently dominated by Festival Mall and Key West.

On the basis of individual assets and asset segments, Acucap’s net income is attributable as follows :

	Contractual rental income R'000	% of total	Net property income R'000	% of total

Festival Mall	48,420	19.9%	42,734	19.4%
Key West	27,364	11.3%	25,315	11.5%
Other retail	90,010	37.0%	77,356	35.2%
Offices	71,643	29.5%	69,128	31.5%
Industrial	5,588	2.3%	5,268	2.4%
	243,025	100.0%	219,801	100.0%

2. SIMPLIFIED FINANCIAL INFORMATION

Consistent with previous results announcements, a simplified distribution income statement is presented below.

Simplified distribution income statement for the 6 months ended 30 Sept. 2009

	Note	6 months to 30 September 2009 R'000	year to 31 March 2009 R'000
Revenue	1	243,025	499,180
Net operating expenses	2	(28,681)	(56,114)
Profit before interest and taxation		214,344	443,066

Income from investment in Sycom Property Fund Managers	5	13,879	8,010
Development profits	6	17,617	41,823
Interest received	10	7,117	14,821
Income from Listed Investments	10	28,959	56,631
Interest received on Unit Purchase Trust	10	9,121	16,508
Notional Interest received on units issued	10	547	13,250
Debenture holders interest paid - interim	11	0	(186,890)
Other interest paid	12	(102,140)	( 227,166)
Profit for the period		189,444	180,053

Final distribution per unit		128.70	122.76

Notes to the simplified distribution income statement

	6 months to 30 September 2009 R'000	year to 31 March 2009 R'000
1. Revenue as stated	271,010	558,332
Less: straight lining revenue reversed	-3,583	(12,836)
Less : Helderberg sales	-24,402	(46,316)
	243,025	499,180

2. Net operating expenses as stated	(27,684)	( 67,398)
Less : Net income from Sycom Property Fund Managers	(13,879)	( 8,010)
Add: CShell (BEE Company) expenses	51	97
Less : Helderberg cost of sales	12,831	19,197
	(28,681)	( 56,114)

3. (Loss) / Profit on sale of properties as stated	(1,025)	( 14,500)
Non-distributable capital profit / loss reversed	1,025	14,500
	-	-

4. Amortisation of Intangible Assets as stated	(11,957)	( 12,923)
Reversal of amortisation of intangible asset	11,957	12,923
	-	-

5.Income from Sycom Property Fund transferred from net operating expenses	13,879	8,010
	13,879	8,010

6. Helderberg sales transferred from Revenue	24,402	46,316
Helderberg cost of sales transferred from expenses	(12,831)	(19,197)
Helderberg units sold not yet transferred - Sept-09	13,097	-
Helderberg units sold not yet transferred - Mar-09	(14,704)	14,704
Realised profit on sale of developments	7,653	-
	17,617	41,823

7. Fair value adjustment to investment properties	593	( 7,687)
Less: Fair value adjustment to investment properties reversed	(593)	7,687
		-

8. Fair value adjustment to BEE instrument	(10,274)	7,835
Less: Fair value adjustment to BEE instrument reversed	10,274	( 7,835)
	-	-

9. Fair value adjustment to Government bonds	1,562	( 20,067)
Less: Fair value adjustment to government bonds reversed	(1,562)	20,067
	-	-

10. Interest received as stated	44,257	97,533
Add: Interest received from CShell, previously eliminated on consolidation	1,487	3,677
Less : Income received on listed units separately disclosed	(28,959 )	( 56,631)
Less : Interest received on Unit Purchase Trust separately	(9,121 )	( 16,508)
Less : Notional Interest received on units issued separately disclosed	(547 )	( 13,250)
	7,117	14,821

11. Debenture interest paid as stated	(178,602 )	( 346,390)
Reverse debenture interest as stated	178,602	346,390
Notional interest iro Mar-08 final distribution on units issued in May 2008	-	( 8,979)
Interim debenture interest to 30 September 2008	-	( 177,911)
	-	( 186,890)

12. Other interest paid as stated	(110,314)	( 250,036)
Less: Other interest paid by CShell, previously included on consolidation	9,399	22,062
Less: Net reversal of interest provided from period end to distribution payment date	(1,225)	808
	(102,140)	( 227,166)

13. Number of linked units in issue per IFRS	138,774,105	138,249,105
CShell linked units previously treated as treasury units on consolidation	8,420,994	8,420,994
Actual units in issue	147,195,099	146,670,099

Simplified Balance Sheet at 30 September 2009

	Note	30-Sep-09 R'000	31-Mar-09 R'000
ASSETS
Property assets	14	5,256,899	5,189,695
Listed property investments	15	713,286	641,958
Other non-current assets	16	479,471	489,577
Other current assets	17	250,355	211,105
Total assets		6,700,011	6,532,335

EQUITY AND LIABILITIES
Shareholder's interest	18	3,903,379	3,812,238
Non-current liabilities	19	2,461,148	2,379,326
Current liabilities	20	335,484	340,771
Total equity and liabilities		6,700,011	6,532,335

Notes to the simplified balance sheet

	30-Sep-09 R’000	31-Mar-09 R’000
14. Property assets as stated	5,285,227	5,360,301
Less: Properties held for sale, removed from assets	-	( 140,578)
Less : Helderberg property inventory	(28,328)	( 30,028)
	5,256,899	5,189,695

15. Listed property investment in Sycom	684,327	612,210
Add: Sycom interest receivable at 31 March 2009	28,959	29,748
	713,286	641,958

16. Other non-current assets as stated	1,163,798	1,101,787
Less: Listed property investments disclosed separately	(684,327)	( 612,210)
	479,471	489,577

17. Other current assets as stated	210,068	169,288
Add: CShell intercompany loan eliminated on consolidation	27,821	26,834
Add : Helderberg property inventory	28,328	30,028
Less : Sycom interest receivable	(28,959)	( 29,748)
Less : Helderberg property sales not yet transferred	21,389	23,981
Less : Helderberg property sold not yet transferred cost of sales	(8,292)	( 9,278)
	250,355	211,105

18. Shareholder's interest as stated	2,093,088	2,016,960
Add Debentures	1,386,353	1,381,108
Debenture portion of linked units issued to CShell	84,126	84,126
Share capital and premium on shares issued to CShell	109,530	109,530
CShell retained income / NDR	64,327	53,538
Helderberg property sales not yet transferred net income	13,097	14,703
Adjust deferred tax to the Capital Gains Tax rate	152,858	152,273
	3,903,379	3,812,238

19. Non-current liabilities as stated	3,817,285	3,857,960
Re-classification of current financial liabilities	422,655	424,217
Less: Proceeds from disposal of assets classified as held for sale	-	( 140,578)
Less: Adjust deferred tax to the Capital Gains Tax rate	(152,858)	( 152,273)
Less: Debentures	(1,386,353 )	( 1,381,108)
Less: Financial liabilities attributable to CShell	(183,736 )	( 183,736)
Less: Financial instrument CShell SWAP	(5,151)	( 4,735)
Less: Reversal of BEE financial instrument	(50,694 )	( 40,421)
	2,461,148	2,379,326

21. Current liabilities as stated	748,720	756,456
Add: Debenture interest payable to CShell	10,838	10,338
Less: Re-classification of current financial liabilities	(422,655)	( 424,217)
Accrued interest receivable from CShell	(1,419)	( 1,806)
	335,484	340,771

3. SYCOM

Acucap has been managing Sycom for the last year, a period of strong growth in Sycom’s distributions. In the six months to 31 March 2009, distributions grew by 11.1% and in the six months to 30 Sptember 2009 by 9.2%. These sound results emphasise the high quality of the Sycom property portfolio, and confirm Acucap’s rationale for entering into this transaction. In addition to receiving good distribution growth from its holding in Sycom, Acucap has also achieved a higher than expected return on its investment in Sycom Property Fund Managers (‘SPFM’), which manages Sycom.
Having established its position in Sycom, and with an intimate understanding of the fund’s assets, Acucap’s intention remains to merge the two businesses, creating a single fund that is both large and of high quality, with a small number of properties, enabling Acucap to maintain its intensive approach to the management of its property assets. Hyprop still retains a material investment in Sycom as a unit holder, and discussions are continuing between the parties to find a satisfactory resolution of their joint interest in Sycom.

4. HELDERBERG VILLAGE

A total of 6 units were sold in the six months under review, compared with 9 sold in the same period last year. A further 3 units are budgeted for sale in the remaining 6 months of the current financial year. The forecast for the 2011 financial year includes the sale of the final 8 units.

5. DEVELOPMENTS WITHIN THE PROPERTY PORTFOLIO

Retail portfolio
Turnovers across the retail portfolio grew by 0.3% for the six months ended 30 September 2009 compared with the same period last year, whilst footcounts declined by 3.4% over the same period. To a degree, these results are symptomatic of the weak state of the local economy, although extensive re-development activities at four of Acucap’s retail centres has also detracted from turnover growth. Development activities in the retail portfolio are summarised below.

Rondebosch on Main Shopping Centre
This project reached final completion during the period under review, and Pick ‘n Pay has also completed its upgrade of the store. The centre is trading well, and the new structured parking is making a positive contribution to the successful operation of this popular community centre.

Westville Mall
The refurbishment of this centre is due for completion in December 2009. The malls have been re-tiled, shop fronts renewed, the building elevation modernised, and a number of the shops extended towards the main car park to add 650m2 of GLA. The development will yield a net return of 9.6%. Planning is underway to add structured parking to this well patronised and busy centre.

Howard Centre
Work has commenced on a R44m project to refurbish, reconfigure and re-mix the tenancy at this community centre. The work includes an expansion of Woolworths from 1,100m2 to a fuller offering of 2,000m2, expanding the banking component, and introducing Mr Price to the fashion mix. Howard Centre has for many years been Pinelands’ main community centre, and this project is intended to refresh the product, and improve its community appeal and offering. It’s expected to yield a net return of 10.1%.

Watermeyer Park
Work is nearing completion on an upgrade and refurbishment of this centre.

Office Portfolio
There were no acquisitions or disposals in the office portfolio, although the transfer was effected for Goldfields and 135 West Street, both of which had been shown as ‘held for sale’ at 31 March 2009. The principal leasing activity is shown below :

Neotel Woodmead
Neotel vacated this building at the end of August 2009, and their entire space of 4,618m2 was re-let to Online Digital Media, with the lease commencing in September 2009.

Industrial portfolio
N1 Business Park, Midrand
The latest two developments in the Park have been completed and handed over to the tenants. Landis & Gyr, with 4 600m2, have signed a 10 year lease that gives an initial return of 10.34%, and Digistics, with a 5 year lease for 7 821m2, provides an initial return of 10.33%.

Development prospects have cooled with the slowing economy. The project infrastructure, however, is progressing on schedule, and the latest phase of roads and landscaping to cater for the most recent developments has now been completed.

To date, 25,479m2 of warehouse space has been leased. The high quality of the park, its low bulk, the modern building construction and the site’s good access and visibility have made it possible to achieve superior rentals, long lease tenure and a strong tenant base.

6. BORROWINGS

The company has fixed the interest rate on 73.8% (2008:68%) of its facilities with unexpired terms up to 15 years. The weighted average rate for interest rate swaps is 10.9%, and the weighted average term to maturity is 7½ years. Details are as follows :

	Fixed period	Amount R’000	Effective interest rate

Standard	01-Oct-09	50,000	11.4%
Nedbank	27-Sep-11	50,000	10.3%
Standard	01-Oct-11	50,000	10.2%
Omsfin	15-Dec-11	50,000	9.7%
Nedbank	31-Mar-12	50,000	13.2%
Standard	01-Oct-12	50,000	10.1%
Nedbank	08-Feb-13	200,000	11.2%
Standard	01-Oct-13	50,000	9.8%
Omsfin	11-Oct-13	120,000	10.0%
Nedbank	01-Aug-16	70,000	11.2%
Nedbank	30-Sep-16	50,000	10.7%
Nedbank	31-Jul-17	50,000	10.9%
Nedbank	17-Jul-19	50,000	11.6%
Nedbank	31-Jul-20	50,000	11.1%
Nedbank	05-Aug-20	50,00	10.9%
Nedbank	30-Sep-20	50,000	10.4%
Nedbank	31-May-21	250,000	11.7%
Nedbank	31-Jul-23	50,000	10.9%
Nedbank	09-Oct-23	100,000	10.0%
Bond shorts R186/R209	2025/2036	222,655	9.2%
Fixed interest loans		1,662,655

Floating interest loans		589,328
Nedbank		63,303	8.20%
Nedbank		30,025	9.50%
Omsfin		200,000	8.50%
Standard		180,000	8.50%
Standard		116,000	8.68%

Total borrowings (net of BEE transaction)		2,251,983
Short position on R186 and R209 Government Bonds

FORWARD LEASE EXPIRY PROFILE BY INCOME
	Total	Mar-10	Mar-11	Mar-12	Mar-13	Mar-14	Mar-15	Mar-16
Major Retail Assets
Expiry (% of total income)	43.8%	8.5%	9.0%	11.1%	5.4%	3.6%	3.1%	3.2%
National Tenants	26.6%	5.3%	3.9%	7.1%	2.5%	2.8%	2.5%	2.5%
Other	17.2%	3.2%	5.1%	4.0%	2.9%	0.7%	0.6%	0.7%

Average rate m²	95.48	96.49	107.46	122.54	114.97	92.44	63.93	50.93
National Tenants	79.36	79.36	92.48	103.00	95.40	80.33	57.58	47.41
Other	139.44	149.72	122.90	185.01	139.51	223.38	123.53	69.02

Average escalation rate	8.1%	8.4%	8.5%	8.6%	8.2%	7.7%	6.3%	6.6%
National Tenants	7.5%	7.9%	7.5%	8.3%	7.3%	7.2%	5.9%	6.9%
Other	9.0%	9.2%	9.2%	9.3%	9.0%	9.5%	8.0%	5.7%

OTHER RETAIL ASSETS
Expiry (% of total income)	23.6%	2.8%	3.0%	3.0%	5.1%	2.8%	3.9%	2.9%
National Tenants	13.6%	1.4%	1.3%	0.8%	2.8%	1.9%	3.6%	1.8%
Other	10.0%	1.4%	1.7%	2.2%	2.3%	0.9%	0.3%	1.2%

Average rate m²	83.34	116.56	88.39	107.46	122.97	69.92	51.89	73.67
National Tenants	67.14	100.88	62.08	88.99	107.50	62.17	48.89	62.96
Other	123.75	136.84	133.17	116.50	149.12	97.13	140.60	98.13

Average escalation rate	7.4%	8.8%	7.6%	8.5%	8.4%	7.9%	4.4%	6.8%
National Tenants	6.3%	8.1%	5.6%	7.3%	8.0%	7.4%	4.0%	6.0%
Other	8.9%	9.5%	9.1%	9.0%	8.8%	8.9%	9.4%	8.0%

OFFICES
Expiry (% of total income)	30.0%	1.7%	3.2%	4.8%	5.1%	8.3%	2.3%	4.6%
Large corporates & government	16.8%	0.2%	1.5%	3.0%	2.5%	3.9%	2.2%	3.4%
Other	13.2%	1.5%	1.7%	1.8%	2.6%	4.3%	0.1%	1.2%

Average rate m²	112.34	110.75	107.10	112.80	117.76	117.84	111.61	102.55
Large corporates & government	108.38	206.48	96.75	118.78	110.93	108.96	111.34	99.66
Other	117.81	105.05	118.22	104.11	125.08	127.29	118.02	112.08

Average escalation rate	8.8%	9.0%	9.1%	9.3%	9.4%	8.8%	8.0%	7.9%
Large corporates & government	8.7%	8.6%	9.7%	9.4%	9.9%	8.7%	8.0%	7.2%
Other	9.0%	9.1%	8.7%	9.3%	9.0%	8.8%	8.0%	10.0%

INDUSTRIAL ASSETS
Expiry (% of total income)	2.6%	0.0%	0.1%	0.0%	0.0%	0.1%	1.4%	0.9%
National Tenants	1.7%	0.0%	0.1%	0.0%	0.0%	0.0%	1.1%	0.4%
Other	0.9%	0.0%	0.0%	0.0%	0.0%	0.1%	0.2%	0.5%

Average rate m²	46.47	-	62.16	-	10.00	66.19	43.48	50.78
National Tenants	45.19	-	62.16	-	-	-	41.22	54.64
Other	49.00	-	-	-	10.00	66.19	58.60	48.06

Average escalation rate	7.8%	-	9.0%	-	10.0%	8.0%	7.5%	8.0%
National Tenants	7.4%	-	9.0%	-	-	-	7.0%	8.1%
Other	8.6%	-	-	-	10.0%	8.0%	10.0%	8.0%

TOTAL
Expiry (% of total income)	100.0%	13.0%	15.4%	18.9%	15.5%	14.8%	10.7%	11.7%
National Tenants	58.7%	6.8%	6.9%	10.9%	7.7%	8.7%	9.4%	8.1%
Other	41.3%	6.1%	8.5%	8.0%	7.8%	6.1%	1.3%	3.6%

Average rate m²	90.86	101.99	102.42	117.31	116.99	97.89	60.80	70.34
National Tenants	80.40	84.29	84.52	105.61	104.29	84.88	57.58	66.10
Other	123.33	133.15	123.80	138.17	133.09	125.61	104.57	82.21

Average escalation rate	8.2%	8.6%	8.4%	8.8%	8.7%	8.3%	6.2%	7.3%
National Tenants	7.6%	8.0%	7.6%	8.5%	8.4%	7.9%	5.8%	6.9%
Other	9.0%	9.3%	9.1%	9.2%	9.0%	8.9%	8.8%	8.2%

SUMMARY OF PORTFOLIO GROSS LETTABLE AREA

	Total GLA	Leased	Vacant	Vacancy %
Major retail	179,422	174,827	4,595	2.6%
Other retail	116,790	108,183	8,607	7.4%
Offices	106,375	101,823	4,552	4.3%
Industrial	21,597	21,321	276	1.3%
Total	424,184	406,154	18,030	4.3%

Approximately 7,520m² of the vacancy in ‘other retail’ consists of planned vacancies in Westville Mall, Howard Centre, East Rand Value Mall, and Watermeyer Park, where redevelopments are either under way or are planned to commence shortly. Excluding the effects of such activities, the ‘other retail’ vacancy would decline to under 1%, and total vacancy to 2.5%, from 2.8% at 31 March 2009.

By March 2010, the total vacancy is expected to once again be under 3% as retail development activities reach completion.

8. RETAIL PORTFOLIO PERFORMANCE

As noted under section 5 above, the retail portfolio showed fairly static turnover numbers in the six months to 30 September 2009, although the results for the Acucap portfolio were substantially better than the Statistics SA national average for retail sales growth. The chart below shows turnover contribution within Acucap’s retail portfolio, reported by retail segment. There has been little change in the segmental contribution to total retail turnovers in the Acucap portfolio, with the food majors accounting for an additional 1.2%, health and beauty an additional 0.8%, and the contribution from mass discounters declining by 1% as the sale of durable goods remains under pressure.

9. RECONCILIATION OF LEASE EXPIRIES WITH NEW LEASES AND RENEWALS

The table below provides a reconciliation of lease expiries with new leases and renewals over the six month period from 1 April 2009 to 30 September 2009:

	Expiries and terminations (m2)	Average through rent at expiry (R)	Average escalation rate at expiry	New leases and renewals (m2)	Average through rent for new leases (R)	Average escalation for new leases
Regional Retail	13,032	100.89	8.0%	10,939	105.89	8.2%
Other Retail	19,584	82.51	8.8%	17,794	82.57	8.3%
Offices	17,297	89.10	9.6%	16,062	94.37	9.2%
Industrial	-	-	-	2,484	56.22	10.0%
Total	49,913			47,279

Renewal rentals for regional retail and offices showed upward reversion of 5% and 5.7% respectively, whilst renewal rentals for other retail were flat. Renewal escalation rates have not changed significantly across the whole portfolio.

The following table places the six month pattern of expiries and renewals within the context of an overall reconciliation of change in the gross lettable area of the combined Acucap portfolio:

	GLA at 31 March 2009	Expiries and terminations	New leases and renewals	Area added	GLA at 30 September 2009	Properties sold	GLA 31-3-2009
Total	421,106	(44,201)	44,201	3,078	424,184	(29,201)	421,106
Let	408,860	(49,913)	44,201	3,006	406,154	(29,008)	408,860
Vacant	12,246	5,712	-	72	18,030	(193)	12,246

10. UNITHOLDERS

A table of Acucap’s major unit holders is set out below:

Acucap unit holders at 30 September 2009 Entities controlling >5% of issued units
Coronation Fund Managers	15.73%
Public Investment Commission	14.17%
Stanlib Asset Managers	13.17%
Directors and employees	9.30%
Nedbank Limited	6.51%
Thesele Group	5.74%
Investec	5.67%
Other	29.75%
Total	100.00%

Number of units in issue	147,195,099
Number of unitholders	2,204

Subsequent to the end of the period under review, Acucap successfully placed 9.7m linked units, raising R280m for the acquisition of the remaining 50% of Bayside Mall.

11. COST TO INCOME RATIO

For the year to date, management has devoted considerable attention to cost control, particularly in view of the dramatic increases in administered prices such as electricity and rates. The net cost to income ratio has remained satisfactorily low, as shown in the table, and the rate of operating cost recovery from tenants has been maintained.

Period	Percentage
6 months to 30 Sept 2009	11.8%
Year to 31 March 2009	11.3%
Year to 31 March 2008	14.2%
Year to 31 March 2007	12.6%
Year to 31 March 2006	12.2%
Year to 31 March 2005	12.7%

In the office portfolio, electricity contributes an average R7.18 per m2 to tenant’s cost of occupancy, and in the retail portfolio, occupancy costs include an average R11.40 per m2 for electricity.The board is concerned about the effect of electricity price increases on tenant’s cost of occupation, and on their ability to afford rental increases over time.

12. PROSPECTS

With strong upward rental reversions coming through at Festival Mall and Key West in the current renewal cycle, and with the Rondebosch and Westville developments making an increased contribution to second half income, the board of Acucap expects second half growth to exceed that of the first half, resulting in a full year distribution growth rate in the order of 6.5% to 7%. This guidance excludes the effects of any unforeseen circumstances, and the forecast information on which this statement is based has not been reviewed or reported on by Acucap’s auditors.

13. PAYMENT OF DEBENTURE INTEREST

Notice is hereby given that interim distribution number 18 of 128.7 (one hundred and twenty eight comma seven) cents per linked unit has been approved in respect of the six month period ended 30 September 2009. The last date to trade the units cum distribution is Friday, 27 November 2009 and the record date will be Friday, 4 December 2009. The units will start trading ex-distribution from Monday 30 November 2009. Distributions will be made to unit holders on Monday 7 December 2009.

Unit certificates may not be dematerialised or rematerialised between Monday 30 November and Friday 4 December 2009 both days inclusive.