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Acquisition of Parks Lifestyle Apartments at Riversands
SA CORPORATE REAL ESTATE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2015/015578/06)
JSE share code: SAC ISIN: ZAE000203238
(Approved as a REIT by the JSE)
("SA Corporate" or "the Company")
ACQUISITION OF PARKS LIFESTYLE APARTMENTS AT RIVERSANDS
1. Introduction
Shareholders are advised that SA Corporate, through its subsidiary Afhco Holdings Proprietary
Limited ("Afhco" or the "Purchaser"), has concluded a sale of shares and claims agreement (the
"Agreement") with CH Development Investments Proprietary Limited and Century Property
Developments Proprietary Limited (collectively referred to as the "Sellers" and each a "Seller")
pursuant to which, subject to the fulfilment or waiver of the conditions precedent as set out in
paragraph 3.2 ("CPs"), Afhco will acquire all the shares and claims in and against Riversands
Residential Apartments Proprietary Limited (the "Acquiree") at a transaction value equal to
R1,671 million (the "Purchase Consideration") (excluding acquisition costs), subject to the
terms set out below (the "Acquisition").
The Sellers' group will complete the development of a new block of 40 units ("New Block"),
provided that if the New Block is not completed by implementation of the Acquisition ("Phase 2")
a portion of the Purchase Consideration of up to R31 million (based on progress to date)
("Deferred Purchase Consideration") will be deferred and paid when Phase 2 reaches
applicable development milestones. The New Block will be underpinned by a 12-month net
operating income guarantee described in further detail in paragraph 3.2.
The Acquiree owns 100% of Parks Lifestyle Apartments at Riversands (the "Parks" or the
"Property"). The beneficial owner of the Sellers is the MAC Trust (the "Trust"). The beneficiaries
of the Trust are all individuals, none of whom are related parties to SA Corporate.
2. Information on the Property and rationale for the Acquisition
The Property prior to completion of Phase 2 ("Phase 1") comprises 1,960 residential units with a
total gross lettable area ("GLA") of 118,528mē. The Property is located in the rapidly growing
Riversands development area near Steyn City, Fourways, which offers a secure, convenient, and
high value living environment for residents. The unit mix includes bachelor, one, two, and three-
bedroom apartments within three storey blocks.
The Acquisition presents an opportunity for SA Corporate to further its strategic focus on high
quality, precinct-based developments that align with its long-term goals of sustainability,
defensive income, and enhanced stakeholder value. As confirmation, SA Corporate does not
currently own or manage property with the same scale or mixed-use development potential as
the Parks, making this a compelling strategic expansion. Further rationale for the Acquisition
includes:
2.1. Strengthening the residential portfolio quality and scale
- The Parks provides a high quality, scalable residential asset that supports SA
Corporate's growth in the middle-income rental market; and
- The Acquisition will increase SA Corporate's exposure to suburban estates which is
expected to increase to 67.2% (currently: 58.7%) of SA Corporate's residential
portfolio.
2.2. Attractive and sustainable rental fundamentals
- The Parks delivers strong occupancy and stable cash flows due to affordability,
lifestyle offering and supply constrained location.
2.3. Extensive lifestyle amenities enhancing tenant appeal
- Green spaces, recreational facilities, and enhanced security increase tenant
retention and attractiveness;
- Facilities include a clubhouse, swimming pool, gym, restaurant, cinema, games
room and executive lounges; and
- Family-friendly amenities enhancing tenant appeal including walking paths, kids'
play parks, sports fields, on-site nursery school, adjacent private primary school,
water park with super-tubes and beach area.
2.4. Strategic location in a high growth node
- Situated in Riversands, the Parks benefits from strong infrastructure, proximity to
employment hubs and potential long-term appreciation; and
- The Parks is a flagship quality suburban estate in keeping with characteristics of the
global multifamily housing sub-sector.
2.5. Alignment with responsible investment and community focus
- SA Corporate's commitment to ethical investment, sustainability and community
upliftment is reflected in the Parks' design and management philosophy. The
Property enhances quality of life through well-considered urban living, aligning with
SA Corporate's long-term ESG objectives.
- This commitment is further demonstrated through the achievement of EDGE
certifications across 1,960 residential units, comprising 1,432 units with EDGE
Advanced certification and 528 units with EDGE certification. These certifications
recognise energy savings of up to 46%, water savings of up to 23%, reductions in
embodied energy of up to 30%, and meaningful cuts in operational carbon
emissions, reinforcing SA Corporate's responsible investment strategy.
2.6. Value underpin
- Value is underpinned by the ability to sell units into the retail market at sub 8% yields
as evidenced by sales at comparable estates; and
- The Acquisition establishes a partnership with a highly reputable developer.
2.7. Enhances ability to dispose of other units within the Afhco portfolio at attractive
yields
- The Acquisition of 2,000 units provides SA Corporate with the ability to dispose of
other less strategic units (within its residential portfolio) at sub 8.5% yields.
2.8. Residential Property Management Platform economies of scale
- The addition of 2,000 apartments will enhance the efficiencies derived from
economies of scale within SA Corporate's established residential property
management platform.
3. Terms of the Acquisition
3.1. Effective date
The Acquisition is expected to close and take effect on the first business day of the month
following the month in which the last of the CPs are fulfilled, or to the extent legally
permissible, waived ("Closing Date").
3.2. Application and settlement of Purchase Consideration
The upfront portion of the Purchase Consideration of R1,640 million for Phase 1 will be
applied as follows:
- first, to settle any external debt of the Acquiree ("Acquiree Debt") to be confirmed
by a settlement statement obtained from the Acquiree's debt funders;
- second, as consideration for the acquisition by the Purchaser of the loan owing by
the Acquiree to the Seller (the "Shareholder Loan"), being an amount of R125
million under the relevant loan agreement; and
- the remaining balance of the Purchase Consideration as consideration for shares in
the Acquiree.
The Deferred Purchase Consideration will be payable to the Seller upon certain milestones
being reached, the last of which being the issuance of the temporary occupancy certificate
for the New Block of 40 units once construction of the New Block is completed.
In addition, the Seller will provide a monthly net operating income ("Monthly NOI")
guarantee ("NOI Guarantee") of R316,667. To the extent that the Monthly NOI amounts
to less than the NOI Guarantee, the Sellers will pay the deficit to the Purchaser every
month for the first-12 months post-closing in respect of Phase 2.
The Purchase Consideration will be funded through a combination of SA Corporate's and
Afhco's existing and new debt facilities, disposal proceeds and / or equity to be raised. The
3-year Afhco debt to be raised will be competitively priced at a margin of 125 bps above
3-month JIBAR, secured to fund socially responsible investment in affordable
accommodation residential property.
3.3. Conditions precedent
The Acquisition is subject to fulfilment or, where appropriate, waiver of the following
outstanding CPs, that by no later than 28 February 2026 (the "Longstop Date"):
- all required consents or approvals are obtained from the relevant debt funding
counterparties of the Acquiree, and to the extent that SA Corporate refinances the
Acquiree Debt, confirmation that such refinancing will not trigger any defaults,
prepayments or penalties;
- any releases of security provided by (a) the Acquiree for the Sellers' group debt and
obligations; and (b) the Sellers' group from the Acquiree's debt and obligations, are
procured;
- the necessary approvals (or exemptions) from the Competition Authorities and any
other applicable regulatory authorities, either unconditionally or subject to conditions
acceptable to the Purchaser, the Sellers and the Acquiree, within the relevant
statutory timelines, are received; and
- Within 10 business days following fulfilment or waiver of all the above CPs, SA
Corporate must deliver the funding confirmation notice to the Seller.
Any of the dates in respect of the CPs set out above may be extended by mutual
agreement between the Purchaser, the Sellers and the Acquiree in writing.
The Agreement contains warranties and undertakings which are normal for a transaction
of this nature.
4. Property specific information
Weighted Value
Average
average Purchase attributed
Property GLA (mē) & # rental per
Location Sector basic rental Consideration to the
name of units unit per
per month (Rm) Property
month(R)
(R/mē) (Rm)
Phase 1:
118 528m2
The Parks
Fourways, 1,960 units Phase 1: R1,640
Lifestyle Residential 131 8,125 R1,671
Gauteng Phase 2: Phase 2: R31
Apartments
2419m2
40 units
The Purchase Consideration payable for the Acquiree (and the Property) is considered to be its
fair market value (and value of the net assets), as determined by the directors of the Company.
The directors of the Company are not independent valuers nor are they registered as professional
valuers or as professional associate valuers in terms of the Property Valuers Profession Act,
No.47 of 2000.
5. Financial information
The forecast financial information relating to the Acquiree ("Forecast") for the first 12 months of
ownership by SA Corporate ("Forecast Period") is set out below.
The Forecast has been prepared on the assumption that the Closing Date will occur on 1 January
2026 and on the basis that the Forecast includes forecast results for the duration of the Forecast
Period.
The Forecast, including the assumptions on which it is based and the financial information from
which it has been prepared, is the responsibility of the directors of the Company. The Forecast,
and any other financial information in this announcement, has not been reviewed or reported on
by the Company's external auditor.
The Forecast presented in the table below has been prepared in accordance with the Company's
accounting policies, which are in compliance with IFRS Accounting Standards:
Forecast for the 12 months ending 31
December 2026
Rental income R191,700,792
Recovery income R55,330,581
Property expenses -R87,452,316
Net operating income R159,579,057
Finance costs -R79,082,749
Profit before tax R80,496,309
Tax R0
Distributable profit R80,496,309
The Forecast incorporates the following material assumptions in respect of revenue and
expenses:
(1) The Forecast is based on information derived from the rent roll, budgets and additional
information provided by the Sellers.
(2) The Forecast has been prepared for the Acquisition only and includes the Seller's R3.8
million NOI Guarantee for the first year post the Closing Date in respect of Phase 2. It is
assumed that the Property will not be sold during the Forecast Period.
(3) The Forecast assumes the Acquisition will be debt funded on a 57% loan to value ratio (at
the pricing as stated in paragraph 3.2). It should be noted that the SA Corporate group is
settling more expensive debt from disposals to ensure SA Corporate's target gearing is
achieved.
(4) Whilst the Forecast allows for a property management fee of 4% plus VAT, the Forecast
does not make provision for any economies of scale that SA Corporate will achieve through
its residential property management platform.
(5) Net operating income does not include the effects of straight lining rental income.
(6) No fair value adjustment is recognised.
(7) Rental income comprises individual leases signed on a month to month basis and all
contracted rental agreements are assumed to be valid and enforceable.
(8) Vacancies and rental increases have been forecast based on historic metrics.
(9) Operating expenditure has been estimated with reference to contracted terms and
prevailing sector forecasts.
(10) There will be no unforeseen economic factors that will affect rental to be received from
tenants and current operating expenditure.
The Acquisition is at a forecast 9.55% first year net property income yield and is expected to
result in accretion of more than 1.5% to SA Corporate's distributable income per share within 12
months of implementing the Acquisition.
5. Categorisation
The Acquisition is classified as a category 2 acquisition in terms of the Listings Requirements of
the JSE Limited and accordingly does not require SA Corporate shareholder approval.
The Company confirms, for purposes of paragraph 9.16 of the Listings Requirements, that
nothing in the constitutional documents of the Acquiree will, in any way, frustrate or relieve SA
Corporate from complying with its obligations in terms of the Listings Requirements.
Johannesburg
10 October 2025
Financial and Corporate Advisor: Tenurey BSM Property Advisory
Sponsor: Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Legal Advisors: Cliffe Dekker Hofmeyr Inc
Date: 10-10-2025 03:18:00
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