| Mon 21 Dec 2009, 13:33 | | SAC - SA Corporate Real Estate Fund - Announcement Regarding The Acquisition |
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SAC
SAC
SAC - SA Corporate Real Estate Fund - Announcement Regarding The Acquisition
Of A Property
SA Corporate Real Estate Fund
("SA Corporate" or "the Fund")
(Incorporated in the Republic of South Africa)
Share Code: SAC ISIN Code: ZAE000083614
A Collective Investment Scheme in property registered in terms of the
Collective Investment Schemes Control Act, No. 45 of 2002 and managed by SA
Corporate Real Estate Fund Managers Limited (Registration number
1994/009895/06) ("SA Corporate Fund Managers")
ANNOUNCEMENT REGARDING THE ACQUISITION OF A PROPERTY
1. Introduction
SA Corporate unitholders are advised that the Fund has entered into an
agreement with Old Mutual Life Assurance Company (South Africa) Limited
("OMLACSA"), dated 10 December 2009, in terms of which SA Corporate will
acquire Portion 112 of the Farm Driefontein No 85 IR, Stand 227, Hughes
Extension 4 and Portion 1 of Stand 52, Hughes Extension 4, situated in
Rudo Nel Street, Boksburg, Gauteng together with the improvements thereon
measuring approximately 30 299mSquared ("the Property") and known as the
Old Mutual Triangle Warehouse ("the Acquisition"), for a total purchase
price of R208.5 million ("the Purchase Price").
The Acquisition will become effective upon transfer of the Property which
is expected to take place during the first quarter of 2010.
2. Rationale for the Acquisition
The acquisition of the subject property is firmly in line with the
overall investment strategy of the Fund at an initial yield on total cost
of 9.67% with nine years left on a triple net lease escalating at 8% in
October of each year.
The Property enjoys an excellent location and is situated in the light
industrial area, Hughes Extension which is adjacent to the Jet Park
Township, both in close proximity to OR Tambo International Airport. SA
Corporate currently own four properties of some 51 000 mSquared in the
same block bordered by Yaldwyn, Tudor, Rudo Nel and Kelly Roads which are
all leased to the same tenant, and the Acquisition is therefore also
considered strategic.
3. Funding of the Acquisition
The consideration for the Property will be settled in cash.
4. Small related party transaction
As SA Corporate and OMLACSA have a common asset manager, Old Mutual
Investment Group Property Investments (Proprietary) Limited ("OMIGPI")
and further, that OMLACSA is an associate of OMIGPI as contemplated in
terms of the JSE Limited ("JSE") Listings Requirements, the Acquisition
is a "small related party" transaction in terms of the JSE Listings
Requirements. SA Corporate have therefore appointed an independent
registered valuer, Africa Corporate Real Estate Solutions (Proprietary)
Limited ("the valuer"), who have valued the Property at an amount of
R209.5 million as at 30 November 2009. The valuation report is available
for inspection at SA Corporate`s registered office for a period of 28
days from the date of this announcement.
Based on the value of the Property arrived at by the valuer, the
directors of SA Corporate Fund Managers are of the opinion that terms and
conditions of the Acquisition are fair to SA Corporate unitholders.
5. Conditions precedent
The Acquisition is subject to, inter alia, the following conditions
precedent:
- the obtaining of the relevant regulatory approvals, to the extent
required; and
- Competition Commission approval.
6. Property specific information relating to the Property
Pro Loca Sector Renta Single Ave Vacanc Annual Pur Value
perty tion ble or rage y by ised Chase of pro
Area multi ren ren pro Price perty
ten tal table perty of pro Rm
m2 anted per m2 area yield perty
(1) R m2 % Rm
Old Hughes Indus 30 299 Single, 54.37 zero 9.67 R208.5 R209.5
Mutual Town trial triple
Trian ship, net
gle Gauteng lease
Ware
house
Notes:
1. The triple net lease expires on 30 September 2018.
7. Pro forma financial effects of the Acquisition and forecast information
relating to the Property
The pro forma financial effects relating to the Acquisition on SA
Corporate`s net asset value per share and net tangible asset value per
share as at 30 June 2009, being the period relating to SA Corporate`s
most recent published results, have not been disclosed as they are not
significant.
The forecast property information relating to the Acquisition for the 10
months ending 31 December 2010 and the year ending 31 December 2011 is
set out below. The forecast property information has not been reviewed or
reported on by SA Corporate`s auditors in terms of Section 8 of the JSE
Listings Requirements and is the responsibility of the directors of SA
Corporate Fund Managers.
Description Forecast for the 10 Forecast for the
months ending 31 year ending 31
December 2010 (2) December 2011
R`000 R`000
Net rentals (1) 16 693 21 550
Notes:
1. The forecast net rentals are fully contracted, for the duration of
the forecast periods and reflect the net income after collection fee
costs, based on the aggregate of contractual net rentals and
contractual recoveries.
2. The forecast information for the 10 months ending 31 December 2010
has been calculated from the anticipated date of transfer of the
Property to the Fund, being 1 March 2010.
3. As the consideration for the Acquisition is to be settled in cash,
the lease is a triple net lease and the Fund does not incur tax, the
forecast net rental incomes before interest and net rental incomes
after taxation are the same as the net rentals reflected above.
21 December 2009
Cape Town
Investment bank and sponsor
Nedbank Capital
Date: 21/12/2009 13:33:01 Produced by the JSE SENS Department.
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