Vukile Property Fund (VKE) Investor update summary

Strategic rationale for Lar España investment

• Entry into Lar España was motivated by asset quality, market familiarity, and a 50% discount to NAV at investment time, providing exposure to a high-quality, diversified retail portfolio with flexible debt structure.

• Investment offered optionality for scale, potential mergers, and attractive dividend yields, positioning to create a dominant, liquid retail real estate platform in Spain.

• Market sentiment on retail was negative post-COVID, creating buying opportunities and leveraging post-pandemic recovery and improving portfolio performance.

• Improved alignment between management and shareholders, especially after management restructuring, increased confidence in outcomes and potential for capital growth and dividends.

Evaluation and decision to exit Lar España

• The Hines and Grupo Lar consortium's offer was reviewed through financial, strategic, and execution risk lenses, with counter-bidding deemed too risky and potentially dilutive.

• Consortium led by Hines and Grupo Lar increased offer from €8.10 to €8.30 per share after negotiations, resulting in a EUR 200 million cash inflow and irrevocable undertaking to tender 24,090,411 shares for €199,950,411.30.

• Decision to sell was based on disciplined capital allocation, maximizing value and enabling capital redeployment into higher-yield, lower-risk opportunities.

• Investor feedback favored taking cash and redeploying capital, with strategic scale objectives remaining intact and plans to reach EUR 1.6–1.7 billion in Iberian assets by end-2024.

Value creation for shareholders

• The exit generated a 45% IRR and nearly 3x money in under three years, with over R1.5 billion profit, EUR 69 million capital gain, and EUR 40 million in dividends.

• Initial investment was made at a 48–50% discount to NAV, with the discount narrowing to 19% at exit.