| Wed 17 Oct 2007, 13:31 | | ABT - Ambit - Acquisition Of Properties And Renewa |
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ABT
ABT
ABT - Ambit - Acquisition Of Properties And Renewal Of Cautionary Announcement
AMBIT PROPERTIES LIMITED(Registration number: 2001/007003/06)Share code:
ABTISIN code: ZAE000051645("Ambit" or "the Company")
ACQUISITION OF PROPERTIES AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
Introduction
Linked unitholders are referred to the cautionary announcement dated 17
September 2007 and are advised that Ambit has entered into an agreement with
Absa Bank Limited ("the seller") to acquire two commercial properties, details
of which are provided below ("the portfolio"), for a total purchase price of
R303,5 million ("the consideration") plus acquisition costs of R3,8 million
("the acquisition"). The effective date of the acquisition is 8 December 2007.
Transfer of the properties into the name of Ambit is expected to be completed
during December 2007.
The Seller is a related party as defined in Section 10 of the JSE Limited
("the JSE") Listings Requirements.
Details of the portfolio
The portfolio consists of two builidings with a total rentable area of 36 260
m2 and 1027 parking bays. Absa Bank Limited will enter into a new seven year
triple net lease on the 11 Diagonal Street property. Pick `n Pay will occupy 1
772 m2 of the West Street Parkade property on a ten year lease and Absa will
lease the bulk of the parking bays. The seller will complete the comprehensive
refurbishment of the entire foyer, office floors, lifts, airconditioning and
services of the 11 Diagonal Street property and will undertake the outfitting
for Pick `n Pay in the West Street Parkade. The portfolio is being acquired on
a net forward yield of 9.25%. The West Street Parkade`s vacant shops and 196
unlet parking bays will be leased as soon after the effective date of the
acquisition as possible. Outfitting costs of R1,75 million have been provided
for. The forecast yield of the West Street Parkade once fully let is estimated
at 11.5% and the overall yield on the portfolio will be 9.7%.
Details of the properties comprising the portfolio are as follows:
Physical Address Rentable Price
Area m2 R
million
Erf 585, 11 Diagonal Street, Newtown 32 927 246,0
Erf 604, West Street, Newtown 3 333 57,5
36 260 303,5
Rationale for the acquisition
Ambit`s strategy is to increase its commercial property portfolio by investing
in office buildings that will provide a growing income stream from quality
tenants. The two properties in the portfolio are being purchased as part of an
indivisible transaction whereby West Street Parkade provides parking
facilities to meet the requirements of the 11 Diagonal Street tenant, Absa
Bank. The retail space in the West Street Parkade will largely be occupied by
Pick `n Pay on a long term lease. The transaction will be yield enhancing for
Ambit unitholders.
Consideration for the acquisition
The consideration for the acquisition will be settled by way of an issue of 71
411 765 new Ambit linked units to the seller at an issue price of 425 cents
per linked unit, exclusive of the pro rata half year distribution from 1
October 2007 to the date the linked units are issued.
The portfolio has been valued by independent valuers CB Richard Ellis, details
of which will be published in the circular to linked unitholders.
Conditions precedent
The acquisition of the portfolio is subject to, inter alia, the following:
- the approval of the JSE;
- the necessary approvals of the acquisition by Ambit linked unitholders in
general meeting;
- the approval of the acquisition by the seller`s group investment and
board finance committees respectively; and
- the approval of the competition authority.
Financial information
The financial effects of the acquisition on Ambit`s net asset value per linked
unit and the forecast information in respect of the portfolio for the 10 month
period ending 30 September 2008 and the year ending 30 September 2009 are set
out below. This information has been prepared for illustrative purposes only
and because of its nature may not fairly present the Company`s financial
position, or give a fair reflection of the effect of the acquisition on an
Ambit linked unitholder. The financial information has not been reviewed or
reported on by the Company`s auditors and is the responsibility of the
directors.
Before the Adjustments Adjustments Acquisition After the
acquisition (note 2) (note 3) adjustments acquisition
(note 1) (note 4) (note 4)
Net asset 350 (2) 10 12 370
value per
linked
unit
(cents)
Linked 218 228 868 11 428 571 186 486 487 71 411 765 487 555 691
units in
issue
Assumptions:
1. The net asset value per Ambit linked unit and the number of linked units
in issue, as set out in the "Before the acquisition" column above, are
based on the published unaudited interim results of Ambit for the six
months ended 31 March 2007.
2. It was announced on 14 December 2006 that Ambit had, subject to certain
conditions, acquired seven properties for a total consideration of R136
million to be settled by way of the issue of new linked units. The last
property was transferred in August 2007. It has been assumed that this
transaction was effective 31 March 2007.
3. It was announced on 21 August 2007 that Ambit had, subject to certain
conditions, acquired five properties for a total consideration of R690
million to be settled by way of the issue of new linked units. These
properties are expected to transfer to Ambit in the fourth quarter of
2007. It has been assumed that this transaction was effective 31 March
2007.
4. The net asset value per Ambit linked unit, as set out in the "After the
acquisition" column above, is based on the assumption that the
acquisition was implemented effective 31 March 2007.
10 months 12 months
ending ending
30 Sept 30 Sept
2008 2009
R`000 R`000
Revenue 25 647 32 813
Municipal expenses (450) (582)
Operating expenses (325) (414)
Property Management fees (189) (246)
Operating income 24 683 31 571
Portfolio expenses (1 265) (1 518)
Net operating profit before 23 418 30 053
interest and taxation
Interest on loans (532) (638)
Attributable earnings available 22 886 29 415
for distribution to unitholders
Weighted average number of new 71 412 71 412
linked units to be issued (`000)
Attributable earnings per new 32.1 41.19
linked unit (cents)
Headline earnings per new linked 32.1 41.19
unit (cents)
Notional distribution per new 32.1 41.19
linked units (cents)
Annualised yield based on 425 9.06 9.69
cents per issue price (%)
Assumptions:
1. The forecast has been prepared in accordance with the accounting policies
of Ambit.
2. Contracted revenue is based on existing lease agreements and the assumed
letting of vacant shops including the 196 currently unlet parking bays in
the West Street Parkade. An amount of R1,75 million will be spent on
these retail premises and the parkade.
3. No unforeseen economic factors that will affect the lessees` ability to
meet their commitments in terms of the existing lease agreements have
been included.
4. Operating costs have been determined based on discussions with the
property managers, historical costs and forecast costs per the
independent valuers` reports.
5. The properties are expected to transfer during December 2007.
6. Net profit after interest paid (excluding any capital profits) will be
distributed to unitholders in full.
7. Interest on loans relates to the funding of acquisition costs of R3,8
million. Acquisition costs of R3,8 million have been capitalised to
investment properties in the calculation of net asset value per linked
unit shown above.
Documentation
The acquisition has been classified as a related party transaction in terms of
the JSE Listings Requirements. Accordingly, the Company will in due course
post a circular to linked unitholders together with a notice convening a
general meeting at which the linked unitholders approval of the acquisition
will be sought.
Cautionary Announcement
Ambit unit holders are advised that Ambit is currently involved in further
negotiations which may have an effect on the price at which Ambit linked units
trade and unitholders should continue to exercise caution when dealing in
Ambit linked units.
Johannesburg17 October 2007
Corporate advisor:
GRINDROD BANK
Sponsor:EXCHANGE SPONSORS (PTY) LIMITED
Attorneys:
CLIFFE DEKKER INC
Date: 17/10/2007 13:31:01 Produced by the JSE SENS Department.
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