| Wed 24 Jun 2009, 16:11 | | CPL - Capital - Proposed Acquisition Of A Portfolio Of Properties From |
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CPL
CPL
CPL - Capital - Proposed Acquisition Of A Portfolio Of Properties From
Resilient
Capital Property Fund
Share Code: CPL
ISIN: ZAE000001731
("Capital" or the "Fund")
(A portfolio in Capital Property Trust Scheme, a Collective Investment Scheme
in Property established in terms of the Collective Investment Schemes Control
Act, No 45 of 2002 managed by -
Property Fund Managers Limited ("PFM"))
(Incorporated in the Republic of South Africa)
(Registration No. 1980/009531/06)
PROPOSED ACQUISITION OF A PORTFOLIO OF PROPERTIES FROM RESILIENT
INTRODUCTION
Unitholders are advised that Capital has concluded an agreement for the
acquisition of a portfolio of industrial properties (the "Resilient
portfolio") from Resilient Property Income Fund Limited and its subsidiaries
("Resilient") (the "transaction").
RATIONALE FOR THE TRANSACTION
The acquisition of the Resilient portfolio fits Capital`s strategy to invest
in quality industrial properties located in prime nodes and increases the
value of Capital`s property portfolio from approximately R4.6 billion to more
than R5.2 billion.
TERMS AND CONDITIONS PRECEDENT
The effective date of the transaction is 1 August 2009 and the consideration
will be settled through the issue of Capital units at R6.20 per unit, which is
Capital`s latest disclosed net asset value per unit.
The transaction is subject to the following conditions precedent:
- approval by Capital`s unitholders and trustee;
- all requisite regulatory and statutory approvals including approval of
the JSE Limited and the Competition authorities.
- In addition, the acquisition of Montague Business Park as part of the
transaction is subject to waiver by its co-owners of their pre-emptive
rights on the disposal by Resilient.
THE PROPERTY PORTFOLIO
The Resilient portfolio, based on valuations as at 1 August 2009, is valued at
R611.5 million and consists of three industrial properties in Gauteng with a
total rentable area of 132,770 m2 at an average rental of R30.42 per m2 and a
25% undivided share of 61.5ha vacant zoned industrial land in the Western
Cape. The weighted average rental escalation by rentable area for these
properties is 8.25% and the weighted average annualised property yield is
9.5%.
Property name Geographical Rentable Weighted Effective Valuation
and address location area average date of as at 1
(m2) rental per acquisition August
m2 2009
(R) (R`000)
Isando Gauteng 56 606 37.08 1 August 2009 256 000
Business Park
Cnr Andre
Greyvensteyn
Ave & Hullie
Road & 14
Skietlood
Street Isando
City Deep Gauteng 61 608 23.62 1 August 2009 191 000
Industrial
Park
1 Fortune Road
City Deep
Chemserve Gauteng 14 556 32.79 1 August 2009 67 500
Spartan
3 Johann
Birkart Road
Spartan
Montague Western Cape N/A N/A 1 August 2009 97 000
Business Park
Cnr Koeberg
Road N7 and
Plattekloof
Road Cape Town
(25% undivided
share)
FURTHER DOCUMENTATION
The transaction is a Category 2 transaction in terms of the JSE Listings
Requirements. As Resilient holds a material number of Capital units and is the
holding company of PFM, the asset manager of Capital, the transaction is a
related party transaction under JSE Listings Requirements and requires Capital
unitholder approval. Accordingly a circular containing further details of the
transaction, including the independent property valuation required in the
context of a related party transaction, will be sent to Capital unitholders in
due course.
FINANCIAL INFORMATION
The pro forma financial effects of the transaction on Capital`s basic earnings
per unit, headline earnings per unit and distribution per unit for the year
ended 31 December 2008 are set out below. The pro forma financial effects of
the transaction on the net asset value and tangible net asset value per unit
are not material and have not been disclosed.
The pro forma financial effects have been prepared for illustrative purposes
only, to provide information on how the transaction may have impacted on the
historical financial results of Capital for the year ended 31 December 2008.
Due to their nature, the pro forma financial effects may not fairly present
Capital`s financial position, changes in equity, results of operations or cash
flows after the transaction. The pro forma financial effects are the
responsibility of the directors of PFM.
Unadjusted Pro forma % Change
before the after the
transaction transaction
(cents) (cents)
Basic earnings per unit 110.32 102.29 (7.3%)
Headline earnings per unit 44.62 46.48 4.2%
Distribution per unit 47.72 49.16 3.0%
Weighted average number of units 556,375,093 655,004,125
in issue
Notes and assumptions:
- The amounts set out in the "Unadjusted before the transaction" column
have been extracted without adjustment from the audited annual report of
Capital for the year ended 31 December 2008.
- The transaction is assumed to be implemented on 1 January 2008 for
purposes of basic earnings, headline earnings and distribution per unit.
- The property portfolio was acquired at the aggregate fair value of the
investment properties of R611.5 million which was settled by the issue of
98,629,032 Capital units at R6.20 per unit.
- The yield on the property portfolio, other than the vacant land in
Montague Business Park, was 9.5% throughout the year ended 31 December
2008.
- Interest was capitalised on the vacant land in Montague Business Park at
a weighted average cost of funding rate of 10.7%.
- Asset management fees which are payable to PFM were incurred at a rate of
0.5% per annum on the additional trust capital of R611.5 million for the
year ended 31 December 2008.
- No unit creation fee was payable to PFM.
24 June 2009
Corporate advisor, legal advisor and sponsor
Java Capital (Proprietary) Limited
Date: 24/06/2009 16:11:01 Produced by the JSE SENS Department.
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