Retail study Update Demographics Retail Potential Xanadu Xing

Retail study Update: Demographics & Retail Potential Xanadu X-ing, North West May 2007 Note: This project should be regarded as confidential as it contains Data, Information and Intellectual Property of Fernridge Consulting Copyright (Limited Distribution) Copyright 2007: Fernridge Consulting. 1

Part 1: Overview Copyright 2007: Fernridge Consulting. 4

Orientation Xanadu X-ing is situated on the Eastern side of Hartbeespoortdam. The town is situated to the South of Brits in the North -West province. Site 5 Copyright 2007: Fernridge Consulting Copyright 2006: Fernridge Consulting.

Orientation Xanadu X-ing is a community centre of ± 9, 100 m² GLA with Pick ‘n Pay as the main anchor. It is surrounded by a number of residential developments. Site 6 Copyright 2007: Fernridge Consulting Copyright 2006: Fernridge Consulting.

Part 2: Site Evaluation Copyright 2007: Fernridge Consulting. 11

Site Xanadu X-ing To Ifafi/Brits Filling Station Planet Fitness Private School Netcare Hospital To Pretoria/Johannesburg Copyright 2007: Fernridge Consulting Copyright 2006: Fernridge Consulting. The site is situated well to intercept traffic. Developments surrounding the site will compliment the shopping centre well. 12

Part 4: Retail Potential Estimate Copyright 2007: Fernridge Consulting. 20

Total Retail Potential Estimate (RPE) – 2007 Primary Catchment Secondary Catchment 21 Copyright 2007: Fernridge Consulting Copyright 2006: Fernridge Consulting.

Retail Potential Estimate (RPE) – Growth potential - 5 year average growth factor - Given current housing demand persists - Note that this does not take market share growth into account • Through analysing historical growth we anticipate that the demand in the market within the catchment will grow each year with 4, 416 m² retail space. This increased from 2005 due to a higher growth rate. Copyright 2007: Fernridge Consulting Copyright 2006: Fernridge Consulting. 22

Retail Potential Estimate (RPE) Total Proposed Centre Size = 20, 000 m² Inflow @ 25% = 5, 000 m² GLA to be justified by the demographics ---------= 15, 000 m² Primary Catchment Area Potential (2007) = 61, 901 m² Secondary Catchment Area Potential (2007) = 7, 289 m² ---------= 69, 190 m² From outside the catchment as well as commercial support (such as lodges and hotels) Total justified GLA MARKET SHARE (2007) The market share the centre should achieve to justify 20, 000 m² GLA Growth Potential by 2010 Assuming developments occur as proposed (478 new households per year) MARKET SHARE (2010) The market share the centre should achieve to justify 20, 000 m² GLA = 22% = 13, 248 m² = 18% • The centre currently (at 9, 100 m²) captures only 13% of the market. • A centre of 20, 000 m² GLA will currently have to capture 22% of the market, which is viable, given the quality of the site. • The lower market share (as the area grows) required to justify a centre of 20, 000 m² by 2010 effectively increase the feasibility of an extension of the centre. Copyright 2007: Fernridge Consulting Copyright 2006: Fernridge Consulting. 23

Executive Summary • Xanadu shopping centre forms part of the Xanadu Eco Park development, located on the R 511 leading into the town of Hartbeespoortdam. • Xanadu Eco Park consists of the mentioned shopping centre, adjacent Planet Fitness centre, Netcare hospital, a private school and ± 1, 000 largely permanent A+ income residential units. • Visibility of the site is rated as excellent given the main road location and elevated nature of the site. The site is furthermore favorably located to intercept passing trade leading into the town from Pretoria & Johannesburg. The traffic light on the R 511 assist with traffic calming and allow for safe ingress and egress. • Existing retail around the dam consist mainly of six convenience type centres, including the new Sediba Mall with Superspar as anchor. • High levels of outflow exist to larger shopping centres in Pretoria and Johannesburg, especially in retail categories such as Fashion and Houseware. • The Hartbeespoortdam-area is one of the most rapidly developing towns in South Africa and growing at ± 9% per annum. The bulk of the new residential developments are A & B income units and more people are permanently staying at the dam. This also increase the need for a larger shopping centre. • Based on the growth from 2002 – 2007, we anticipate a short term projection of ± 478 new A & B income residential units added to the catchment area per annum (2002 - 2004: ± 440 residential units added per annum – increased growth rate). • The dam is also a very popular holiday / weekend destination and recent traffic counts showed a 50% increase (inflow) in vehicular traffic over weekends. There is also anticipated commercial support from surrounding farms, lodges and other businesses. • On average it takes a newly developed centre time to achieve maturity. This is due to established shopping patterns that need to be changed. This factor increases the importance of effective marketing, from both tenants and landlords, to establish the centre (and every individual shop) in the area. • Taking existing residential potential and the high level of inflow into consideration, we are of the opinion that a shopping centre of 20, 000 m² GLA is currently justified with an achievable 22% market share. (In 2004, a centre of this size would have to achieve 36% market share – indication of the high growth). A good tenant mix is vital in achieving this. • When applying capture rates from our previous project with the 2007 demographics, a centre of closer to 30, 000 m² GLA can be justified. The site or rights do not permit for a centre of this size; however, this is indicative of the growing potential in the market. Ultimately, this is a very good site in a fast growing area with room for future growth. 24 Copyright 2007: Fernridge Consulting Copyright 2006: Fernridge Consulting.

CV & Contact Details Fernridge Consulting (Pty) Ltd is a retail optimization consultancy that was founded in 2002. We are based in Johannesburg, South Africa and specialize in spatial retail analysis using GIS (Geographic Information Systems) technology, the latest demographic data and information from significant retailers. We are part of the UCS Group, a publicly listed IT company. We are the undisputed leader in this field in South Africa with ± 12 shopping centre development / revamp studies per month conducted in all nine South African provinces, as well as neighboring countries (Namibia, Botswana, Swaziland, Lesotho, Mozambique), other African countries (Zambia, Ghana), and abroad (India, Mauritius). We offer this service to banks, landlords, property managers, corporate and private investors and developers. We also assist some of the leading retail groups in South Africa in their store expansion and rationalization strategies, location analyses etc. Our clients include, among others: Spar, Woolworths, Mc. Donald’s, Nando’s, Mr Price, Supergroup, Massmart, Cashbuild, Ster Kinekor, Virgin Active, Clicks, MTN etc. This is an objective, independent report with the sole aim of limiting risk for our client and optimize development potential. Fernridge Consulting (Pty) Ltd 26 th Floor 209 Smit Street Braamfontein Johannesburg South Africa Fax: P. O. Box 31266 Braamfontein 2017 South Africa +27 11 339 1833 www. fernridge. co. za Sybrand Strauss Director: Property Development & International Tel: Mobile: e-mail: Andre Annandale Manager: Property Development Tel: Mobile: e-mail: Copyright 2007: Fernridge Consulting +27 11 712 1720 +27 82 330 5168 sss@fernridge. ucs. co. za +27 11 712 1714 +27 82 776 6353 ana@fernridge. ucs. co. za