| Tue 25 Sep 2007, 15:51 | | IFR - iFour - joint venture development of the Jef |
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IFR
IFR
IFR - iFour - joint venture development of the Jeffreys Bay shopping centre
iFOUR PROPERTIES LIMITED
Incorporated in the Republic of South Africa)
(Registration number 2001/016118/06)
Share code: IFR
ISIN: ZAE000039236
("iFour" or "the Company")
JOINT VENTURE DEVELOPMENT OF THE JEFFREYS BAY SHOPPING CENTRE ("JEFFREYS BAY")
1. INTRODUCTION
iFour Linked unit holders are advised that a development agreement has been
concluded between iFour and Pambili Developments (Proprietary) Limited
("Pambili"). In terms of the agreement, funding for the development, on a
site previously acquired by iFour from Q Tique 43 (Proprietary) Limited,
will be funded in cash on the basis of 70% by iFour and 30% by Pambili.
Ownership of the completed development will revert to iFour and Jeandor
Trust respectively, on a 70:30 basis.
2. RATIONALE
The transaction is in line with iFour`s stated strategy of growing the size
of its property portfolio, and more particularly the retail component of
the property portfolio, without sacrificing the quality thereof whilst at
the same time delivering sustainable growth in distributions to linked
unitholders. The lack of good quality shopping centres in prominent retail
nodes has created a demand for the development of new retail centres.
Management perceive value in Jeffrey`s Bay as it has a strong permanent
residential base as well as a good holiday inflow from surrounding areas
during the year. The annual growth rate of Jeffreys Bay has been in the
region of 6%. The proposed shopping centre will provide a good rental
income stream for iFour and will strengthen the retail component of the
property portfolio. It is also an opportunity for iFour to benefit in the
upside of developing the project (the development fee) as well as having
control of the final product (70% ownership).
3. COSTS OF THE DEVELOPMENT
The maximum cost of the development will not exceed R144,635 million. iFour
will receive a development fee of R4 million or 20% of the development
profit, whichever is the greater.
The value attributed to the property (which is still to be developed) has
been determined based on feasibility studies and is calculated on the
actual letting income achieved, capitalised at a maximum of 9%. This
excludes the development profit earned by iFour. iFour`s directors are of
the opinion that the purchase consideration represents the fair value of
the property.
4. FINANCIAL INFORMATION RELATING TO THE ACQUISITION
The transaction will have no material effect on iFour`s distributable
earnings,and accordingly, no financial effects are provided.
5. PROPERTY DETAILS
Details regarding the property are set out below:
This retail property is located at number 16 Francis Street, Jeffreys Bay.
The gross rentable area is approximately 16 000 square metres and the
anticipated weighted average rental per square meter for the rentable area
is approximately R85.00 Practical completion of the property is projected
for October 2008.
6. CATEGORISATION OF THE ACQUISITION
The acquisition is a Category 3 transaction in terms of the Listings
Requirements of the JSE.
25 September 2007
Johannesburg
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
(Registration no: 1970/003711/07)
Date: 25/09/2007 15:51:01 Produced by the JSE SENS Department.
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