Half Yearly Report

SOUTH AFRICAN PROPERTY OPPORTUNITIES PLC

('SAPRO' or the 'Group')

Interim results for the six months ended 31 December 2011

South African Property Opportunities plc (AIM: SAPO), an investment company established to invest in real estate opportunities in South Africa, announces its unaudited interim results for the six months ended 31 December 2011.

Matrix Paul Fincham +44 (0)20 3206 7175

Robert Naylor +44 (0)20 3206 7340

A copy of the results announcement will be available on the Company's website at www.saprofund.com

Notes:

Note to Editors:

- South African Property Opportunities plc (SAPRO) is a company investing in the South African property market. Its shares were admitted to AIM in October 2006 raising an initial £30 million (before placing expenses). In May 2007 a further £34.2 million (before placing expenses) was raised from new and existing investors.

Financial and Operating Review

Financial Overview

In the six months since 30 June 2011, EPRA Net Asset Value per share has declined from 110.1 pence per share to 90.8 pence per share as at 31 December 2011. Over the same period EPRA net assets have declined from £68.6 million to £56.6 million. These declines are primarily due to two factors: foreign exchange losses of £9.0 million and a decline in the appraised value of the portfolio of 3%. Between 30 June 2011 and 31 December 2011 the ZAR/GBP exchange rate moved from 10.8852 to 12.5202. The Group does not hedge its currency exposure.

Expenses for the six months were £646,000 compared with £8,277,000 for the comparable period in 2010. The difference is primarily due to amounts incurred in respect of the former investment manager of £6,621,308 in the comparable period. At the period end cash balances were £1.4 million.

South African Economy

Growth has slowed to 3.4% per annum, significantly below the levels required to combat unemployment levels which have improved marginally to 23.9%. With inflation, now at 6.3%, breaking through the South African Reserve Bank's target range of between 3% and 6%, the South African government remains under pressure to deliver on its strategy to address poverty and unemployment. The necessity for housing and other basic services is now at a critical stage.

Significant state infrastructure spend of ZAR 844.5 billion over the next three years has been confirmed and The National Planning Commission and The Presidential Infrastructure Coordination Committee have both been established to implement such plans. This has created some momentum in business confidence over the past few months.

In addition, a ZAR 1 billion housing fund has been established to promote affordable housing.

Interest rates are expected to remain flat (at a 9% per annum prime rate) for the foreseeable future. Unlocking development, promoting construction, driving employment and skills development are seen as key factors to the economic recovery.

Property Market

The South African property market remained quiet for the period to 31 December 2011, with most activity being transacted by the listed sector seeking out bargain acquisitions of developed income producing assets. Demand for greenfield development projects and vacant land remain limited because of a lack of loan finance and limited investor appetite.

Sale transactions

Since 30 June 2011 and to the date of this report £4,171,647 (ZAR 52,229,850) of sales have been signed, of which £1,994,505 (ZAR 24,971,600) have completed to date with proceeds received. The remainder are anticipated to complete over the next few months. These sales are summarised below:

*It is anticipated that the net proceeds arising from these sales will be available to the Group and not used to pay down debt.

Sales at Acacia Park have been at a discount to the 30 June 2011 CBRE valuation (around 10%); whilst the sales at Waltloo and Hughes have taken place at their 30 June 2011 CBRE values. Sales at Kindlewood and Imbonini have been at levels around 30 June 2011 CBRE values.

Finalisation of the ZAR 65m Gosforth Park transaction, noted in 30 June 2011 accounts, with our development partners has been delayed, by mutual consent, in order to accommodate certain changes. This involves a reallocation of sites and is expected to be completed shortly.

Asset Management Progress

Significant asset management initiatives are detailed below.

Valuation

Interim valuations were conducted by CB Richard Ellis (CBRE) during the months of December 2011 and January 2012 and finalised in late February. Overall, the portfolio saw a marginal decline in value of 3.3% when compared with the full year 30 June 2011 valuation.

Such diminution in value was largely the result of a mark down being ascribed to the Long-Point component of the Longmeadow asset due to weaker than predicted tenancy levels.

In addition, the Kindlewood asset has been marked down since 30 June 2011 based on the lack of sales during the half year to 31 December 2011.

The portfolio valuation was equally adjusted for any transfers during the period under review.

The Company's strategy remains to sell the property assets and return capital to investors. Broader economic and real estate specific factors in South Africa have constrained the realisation process, but the Board remains focused on delivering the strategy.

Stephen Coe

Director

29 March 2012

Consolidated Income Statement

Consolidated Statement of Comprehensive Income

Consolidated Balance Sheet

Consolidated Statement of Changes in Equity

Consolidated Cash Flow Statement

Notes to the Financial Statements

1 General Information

South African Property Opportunities plc (the "Company") was incorporated and registered in the Isle of Man under the Isle of Man Companies Acts 1931 to 2004 on 27 June 2006 as a public limited company with registered number 117001C. On 7 January 2011 with the approval of Shareholders in general meeting, the Company was re-registered as a company under the Isle of Man Companies Act 2006 with registered number 006491v. South African Property Opportunities plc and its subsidiaries' (the "Group") investment objective is to achieve capital growth from a portfolio of real estate assets in South Africa.

Group Five Property Developments (Pty) Limited ("Group Five"), was appointed as the investment manager on 4 October 2010 with fee charging commencing with effect from 21 October 2010. The Company's administration is delegated to Galileo Fund Services Limited (the "Administrator"). The registered office of the Company is Millennium House, 46 Athol Street, Douglas, Isle of Man, IM1 1JB.

Pursuant to a prospectus dated 20 October 2006 there was an authorisation to place up to 50 million shares. Following the close of the placing on 26 October 2006, 30 million shares were issued at a price of 100p per share.

The shares of the Company were admitted to trading on the AIM Market of the London Stock Exchange ("AIM") on 26 October 2006 when dealings also commenced. On the same date the shares of the Company were admitted to the Official List of the Channel Islands Stock Exchange (the "CISX").

As a result of a further fundraising in May 2007, 32,292,810 shares were issued at a price of 106p per share, which were admitted to trading on AIM on 22 May 2007.

The Company's agents and its investment manager perform all functions, other than those carried out by the Board's executive and non-executive directors. The Group has two employees.

Financial year end

The financial year end of the Company is 30 June in each year.

2 Summary of significant accounting policies

Except as described below, the accounting policies applied by the Group in the preparation of these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements for the year ended 30 June 2011.

2.1 Basis of preparation

These interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 30 June 2011 which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union.

The interim financial statements for the six months ended 31 December 2011 are unaudited. The comparative interim figures for the six months ended 31 December 2010 are also unaudited.

(a) New and amended standards adopted by the Group

The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 July 2011.

·; Annual improvements to IFRSs, effective 1 January 2011, were issued by the IASB as part of the IASB's programme of annual improvements resulting in amendments to 7 standards. The amendment to IAS 34 'Interim Financial Reporting' has been considered in the preparation of the interim results and the other improvements have not had a significant effect on the Group.

·; Revised IAS 24 (Revised), 'Related party disclosures', issued in November 2009. It supersedes IAS 24, 'Related party disclosures', issued in 2003. IAS 24 (Revised) is mandatory for periods beginning on or after 1 January 2011. Earlier application in whole or in part is permitted. The revised standard clarifies and simplifies the definition of a related party and removes the requirement for government-related entities to disclose details of all transactions with the government and other government-related entities. The revised standard has not had a significant effect on the Group.

2.2 Critical accounting estimates and assumptions

Management makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are addressed below:

Going concern

These financial statements have been prepared on a going concern basis, which assumes that the Group will be able to meet its liabilities as and when they fall due for the foreseeable future.

The Directors have prepared cash flow forecasts that indicate that the Group will be able to meet its financial obligations through to December 2012 from existing cash resources and the projected sales proceeds from sale of inventory.

Estimated impairment of inventory, investment in associates and loans to associates

The Group obtains third party semi-annual valuations performed by CB Richard Ellis. These are used in conjunction with the strategic plan for each development in order to determine any impairment of inventory, investments in associates and loans to associates.

During the period there were impairment charges in relation to investment in associates (see note 10.1), loans due from associates (see note 10.2) and inventory (see note 12).

Estimated impairment of goodwill

The Group tests annually for whether goodwill has suffered any impairment, in accordance with its accounting policy. The recoverable amount of the cash generating unit has been determined using fair value less cost to sell. This calculation requires the use of estimates, see note 11 for further details.

3 Segment Information

The entity is domiciled in the Isle of Man. All of the reported revenue, £369,456 (31 December 2010: £576,676), is from external customers located in South Africa.

The total of non-current assets other than financial instruments is £7,437,119 (30 June 2011: £9,365,244) and all of these are located in South Africa.

For the six months ended 31 December 2011 revenues of £nil (ZAR nil) were derived from a single external customer (31 December 2010 £181,201 (ZAR: 2,017,544) attributable to Kindlewood).

4 Operating leases

The Group leases out certain parts of its inventory under operating leases whilst it is in the process of seeking a buyer. The future minimum lease payments receivable by the Group under non-cancellable leases are as follows:

5 Cost of sales

6 Investment Manager's fees

Annual fees

There was a transition of investment manager from Proteus Property Partners Limited to Group Five Property Developments (Pty) Limited with effect from 21 October 2010.

For the period to 20 October 2010 Proteus Property Partners Limited was entitled to a management fee of 2 per cent. per annum of the net asset value of the Group payable quarterly in advance. Management fees to 31 December 2011 paid to Proteus Property Partners Limited amounted to £nil (31 December 2010 £513,774). Additional management fees (and associated costs) in relation to earlier periods payable to Proteus Property Partners Limited amounted to £nil (31 December 2010: £1,145,802).

From 21 October 2010 Group Five Property Developments (Pty) Limited became the investment manager and a revised Investment Management Agreement came into operation. Their fee as investment manager is £500,000 per annum payable monthly in arrears. Management fees for the period ended 31 December 2011 paid to Group Five Property Developments (Pty) Limited amounted to £250,156 (ZAR 3,028,119) (31 December 2010: £118,591 (ZAR 1,320,426)).

During the period, pursuant to the investment management agreement, the investment manager was also entitled to recharge to the Group any costs and disbursements reasonably incurred by it in the performance of their duties, including costs of travel save to the extent that such costs are staff costs or other internal costs of the relevant investment manager.

Sales fee

From 21 October 2010 and according to the terms of the revised Investment Management Agreement, Group Five Property Developments (Pty) Limited is entitled to a sales fee of up to 3 per cent. of the gross proceeds on disposal of the Group's projects (such fee is net of external brokerage costs incurred). These fees are payable on sale and have been considered when determining the net realisable value of the inventory (see note 12). Sales fees payable for the period ended 31 December 2011 payable to Group Five Property Developments (Pty) Limited amounted to £nil (ZAR nil) (31 December 2010: £nil (ZAR nil)).

Performance fees

During the period to 20 October 2010, Proteus Property Partners Limited was eligible to receive a performance fee which would be payable by reference to the increase in net asset value per share above a hurdle based on the issue price per share increased at a rate of 12 per cent. per annum. Performance fees payable in relation to earlier performance fee periods payable to Proteus Property Partners Limited amounted to £nil (31 December 2010: £4,961,732).

The Group has accrued a performance fee due to Group Five Property Developments (Pty) Limited based upon the market value of the portfolio which only becomes payable on the eventual sale of these assets so long as the sales values are better than certain agreed benchmarks. The reduction in performance fees accrued for the period ended 31 December 2011 amounted to £63,673 (ZAR 770,760) (31 December 2010: £nil (ZAR nil)).

7 Other administration fees and expenses

Included within other administration fees and expenses are the following:

Directors' remuneration

The maximum amount of basic remuneration payable by the Company by way of fees to the Non-executive Directors permitted under the Articles of Association is £200,000 per annum. All Directors are each entitled to receive reimbursement of any expenses incurred in relation to their appointment. The Non-executive Directors (excluding the Chairman) were entitled to receive an annual fee of £40,000 each and the Chairman £75,000. Stephen Coe was also entitled to additional remuneration of £30,000 in December 2011 for his work.

Executive Directors' fees

The Executive Directors received annual basic salaries of £40,000. Pursuant to the terms of their service agreements, Craig McMurray and John Chapman are entitled to incentive payments of, respectively, 1.5 per cent. and 0.5 per cent. of all sums distributed to shareholders. The agreement also provides for payments of the same percentages, following termination of their employment, for distributions paid from cash generated during their employment. This is provided the distribution is declared within 12 months of termination.

All directors' remuneration and fees

Total fees, basic remuneration (including VAT where applicable) and additional remuneration paid to the Directors for the period ended 31 December 2011 amounted to £159,667 (31 December 2010: £131,063) and was split as below. Directors' insurance cover amounted to £22,016 (31 December 2010: £23,962).

8 Income tax expense

The tax on the Group's profit before tax is higher than the standard rate of income tax in the Isle of Man of zero per cent. The differences are explained below:

There are tax losses carried forward in the underlying subsidiaries of £25,899,347 (ZAR: 324,265,000) (30 June 2011: £23,017,308 (ZAR: 250,548,000)). There is no expiry date for the carrying forward of these losses. For prudence, tax losses are not carried as deferred tax assets in the consolidated balance sheet until the losses have been approved by the South African Revenue Service and the realisation of the related tax benefit through future taxable profits is probable.

9 Basic and diluted loss per share

Basic loss per share is calculated by dividing the loss attributable to equity holders of the Group by the weighted average number of shares in issue during the period.

The Company has no dilutive potential ordinary shares; the diluted earnings per share is the same as the basic earnings per share.

10 Investments in and loans to associates

10.1 Investments in associates

The Group's share of the results of its principal associates, all of which are unlisted, and its aggregate assets (including goodwill) and liabilities, is as follows:

The Group's share of losses made by associates not recognised in the financial statements as the carrying value of the investment is £nil, is as follows:

10.2 Loans due from associates

The loans due from associates are as follows:

* repayable after the senior debt funding provided by Investec Bank Limited has been repaid in full.

** repayment date is four years + one day following the receipt of the Recordal from the Development Facilitation Act, 1995 (DFA) Tribunal approving the planning application.

*** repayable as and when the directors of Imbonini Park Phase 2 (Pty) Limited resolve that repayment shall be effected, provided there are sufficient cash reserves available to do so and proportionately to each shareholder.

**** repayable at the discretion of the directors of Blue Waves Properties 2 (Pty) Ltd.

The fair value of these loans approximates their carrying value.

11 Intangible assets

The above goodwill relates entirely to the Group's investment in the shares of Living 4 U Developments (Pty) Ltd, (the African Renaissance development). The recoverable amount of this cash generating unit has been determined using fair value less cost to sell. The key assumption used to determine the fair value less cost to sell is the third party valuation of the land held. The recoverable amount is currently £1,449,633 (ZAR 18,149,689) and the third party valuation of the land (which is the value assigned to the key assumption and is valued at £10,662,769 (ZAR 133,500,000) at 31 December 2011) would have to fall by £1,166,512 (ZAR 14,604,968) before impairment needs to be considered.

12 Inventories

Non-current assets

Current assets

During the period, the Group capitalised costs of £137,371 (ZAR 1,662,859) (30 June 2011: £2,911,803 (ZAR 32,449,710)), in order to develop the property for future re-sale, and accordingly it was classified as inventory. Borrowing costs of £16,187 (ZAR 195,946) (30 June 2011: £36,056 (ZAR 401,815)) have been included in capitalised costs.

Net realisable value has been assessed using valuations determined by CB Richard Ellis less estimated selling expenses and has led to further impairments of £344,236 (ZAR 4,166,948). Included within these selling expenses is a 3 per cent. sales fee due to the investment manager on disposal of inventory (see note 6).

The Directors consider all inventories to be current in nature. It is not possible to determine with accuracy when specific inventory will be realised, as this will be subject to a number of issues such as availability of finance and permitting delays.

Security

At 31 December 2011, there are four first rank mortgages secured over the inventory held by Clayville, Driefontein, Kindlewood and Lenasia which totals £12,656,382 (ZAR 158,460,430) (30 June 2011: Gosforth Park and Kindlewood £20,949,040 (ZAR 228,034,495)) (see note 19).

13 Trade and other receivables

In October 2011 the Company settled all disputes with its former manager and administrator, in relation to outstanding performance fees and management fees, by paying the former manager £5.78 million and exchanging mutual releases. This money was held in escrow at 30 June 2011.

The fair value of trade and other receivables approximates their carrying value.

14 Cash at bank

Included within the bank deposit balances figure is an amount of £99,179 (ZAR 1,241,741) (30 June 2011: £459,339 (ZAR 5,000,000)) represented by bank guarantees retained by the bank under fixed deposit (detailed below). This is the only figure excluded from the above balances for analysing the movements of cash and cash equivalents in the cash flow statement.

Bank guarantees

The subsidiary SAPSPV Holdings RSA (Pty) Ltd has a contingent liability of £99,179 (ZAR 1,241,741) in connection with senior debt obligations of its associate Imbonini Park (Pty) Ltd.

15 Share capital

The holders of Ordinary Shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

Business Venture Investments No 1269 (Pty) Limited (the Wedgewood development) has issued preference shares ZAR 100 to its minority holders. The holders of the preference shares are entitled to the first ZAR 22,000,000 (£1,757,160) in dividends declared by Business Venture Investments No 1269 (Pty) Limited.

16 Net asset value ("NAV") per share

The NAV per share is calculated by dividing the net assets attributable to equity holders of the Group by the number of ordinary shares in issue.

The Group publishes an adjusted NAV that is calculated in accordance with the guidelines of the European Public Real Estate Association ("EPRA"). The primary difference between EPRA and IFRS is that, in general, under IFRS the Group's development properties are classified as inventory and held at cost while EPRA permits the incorporation of open market valuations. In order to produce the EPRA numbers the Group have retained CBRE's Johannesburg office to conduct semi-annual valuations. The EPRA numbers incorporate the CBRE valuations and are net of tax.

The below figures also take into consideration any profit share agreements with development partners, commission due on sale of properties (see note 6) and incentive fees due to the Executive Directors (see note 7).

17 Loans from third parties

The loans from third parties are as follows:

* in relation to their combined ownership of 25 per cent. of Crimson King Properties 378 (Pty) Limited and the Gosforth Business Estate development.

** in relation to its 50 per cent. interest in subsidiary company, Madison Park Properties 36 (Pty) Ltd, and the Waltloo Industrial Park development.

*** in relation to its 50 per cent. interest in subsidiary company, Madison Park Properties 40 (Pty) Ltd, and the Brakpan development.

**** in relation to its prospective interest in subsidiary company, Madison Park Properties 34 (Pty) Ltd, and the Kyalami Residential Estate development.

***** in relation to its 25 per cent. interest in subsidiary company, Breeze Court 31 (Pty) Ltd, and the Starleith development.

All of the above loans are unsecured and carry no fixed terms of repayment.

The fair value of these loans approximate their carrying value.

18 Trade and other payables

The claim for professional services by our development partner in the African Renaissance project has not yet been fully settled. Total settlement of £1.1 million (ZAR 13.56 million) of which £0.1 million (ZAR 1.1 million) was cash (which has already been settled) and the remaining £1.0 million (ZAR 12.46 million) will require the transfer of some land at the site (12.4 hectares or 8% of the whole) to the development partners.

The fair value of trade and other payables approximates their carrying value.

19 Borrowings

Non-current liabilities

Current liabilities

Terms and debt repayment schedule:

* relates to the Kindlewood development, secured by the Kindlewood property.

** related to the Gosforth development, secured by the Gosforth property. Negotiated a new facility with Standard Bank.

*** relates to SAPSPV Holdings RSA (Pty) Limited, secured by the Group's investments in the Starleith, Wedgewood and Clayville projects as security for the facility and a mortgage bond has been registered over the Clayville property.

**** relates to the Gosforth development; mortgage bonds have been registered over the Lenasia and Driefontein properties and a suretyship for £3.0 million (ZAR 33 million) has been provided by SAPSPV Holdings (Pty) Limited as security for this facility.

The fair value of the borrowings approximate their carrying value.

20 Contingent liabilities and commitments

As at 31 December 2011 the Group has contingent liabilities which have corresponding bank guarantees. See note 14 for further details.

21 Related party transactions

Parties are considered to be related if one party has the ability to control the other party or to exercise significant influence over the other party in making financial or operational decisions.

The current investment manager Group Five Property Developments (Pty) Limited and the Directors of the Company are considered to be related parties by virtue of their ability to make operational decisions for the Group. Fees in relation to the current investment manager are disclosed in note 6 and fees in relation to the Directors are disclosed in note 7.

Group Five Property Developments (Pty) Limited is a related party to Group Five Construction (Pty) Limited, which is a partner in the Wedgewood and Starleith developments. There is a loan in respect of the Starleith development which is disclosed in note 17.

Related party transactions with associates are disclosed in note 10.

There has been no change in the principal subsidiary undertakings and the percentage of shares held by the Group during the six months ended 31 December 2011.

22 Post balance sheet events

Subsequent to 30 June 2011 the Group entered into legally binding agreements in respect of the sales of the following assets: Waltloo for £1,571,201 (ZAR 19,671,750); Hughes for £232,424 (ZAR 2,910,000); 11 units at Acacia Park for £1,900,808 (ZAR 23,798,500); part of Gosforth Park for £5,223,149 (ZAR 65,394,874); part of Imbonini for £107,794 (ZAR 1,349,600) and one unit at Kindlewood for £359,419 (ZAR 4,500,000). Three of the 11 units at Acacia transferred title during the six months ended 31 December 2011. The remaining eight units at Acacia Park and the other asset sales are all due to transfer title by the end of May 2012 and are therefore not yet recorded in the Group's results.

Finalisation of the ZAR 65m Gosforth Park transaction, noted in 30 June 2011 accounts, with our development partners has been delayed, by mutual consent, in order to accommodate certain changes. This involves a reallocation of sites and is expected to be completed shortly.