| Tue 25 May 2010, 14:00 | | VKN - Vukile - Update on the proposed acquisition of properties from Sanlam Life |
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VKE
VKE
VKN - Vukile - Update on the proposed acquisition of properties from Sanlam Life
and Withdrawal of cautionary announcement
Vukile Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2002/027194/06)
JSE code: VKE NSX code: VKN
ISIN: ZAE000056370
("Vukile" or "the company")
Update on the proposed acquisition of properties from Sanlam Life
Withdrawal of cautionary announcement
1. Update
Vukile unitholders are referred to the announcements dated 29 October 2009
and 29 April 2010, containing details of the agreements and addenda entered
into by Vukile with Sanlam Life Insurance Limited ("Sanlam Life" or "the
vendor"), to acquire a portfolio of nine properties ("the properties") for
R527 million ("the purchase price") ("the property acquisition").
2. Vendor placing
As mentioned in the announcement dated 29 April 2010, if the purchase price
is settled partly in cash and partly by way of an allotment and issue of
new Vukile linked units ("the consideration units") to the vendor, Vukile
shall place the consideration units with third parties ("the vendor
placing"), in compliance with the JSE Limited ("the JSE") Listings
Requirements, such that the vendor receives the full purchase price in
cash.
It is anticipated that the purchase price will be funded 37% by debt, 19%
surplus cash and 44% by the vendor placing in terms of which Vukile will
place the consideration units on the vendor`s behalf.
3. Property specific information
Additional information on the properties, as required by the JSE Listings
Requirements, is set out below:
Property Location Sector Single Weighted Total Purch Value
name or multi average rentable ase of
tenanted rent per area Price prope
m2 (1) rty
(2)
(R/m2) (m2) (ZAR` (ZAR
m) `m)
Amanzimtoti KwaZulu- Indust Single 18.96 60.4 52.0
Jeffels Road Natal rial 22,645
Warehouse
Kimberley Northern Retail Multi 65.00 46.7 38.0
Kim Park Cape 10,494
Nelspruit Mpumalanga Mixed Multi 48.40 38.9 72.0
Sanlam Use 13,934
Centre
Pinetown KwaZulu- Indust Multi 34.45 57.8 66.5
Westmead Natal rial 16,914
Kyalami Park
Pretoria Gauteng Commer Multi 73.93 40.7 43.0
Hatfield cial 5,358
Sanlam
Building
Pretoria Gauteng Commer Multi 76.72 54.0 57.0
Sanwood Park cial 6,388
Rustenburg Northwest Retail Single 69.16 81.6 89.0
Edgars 9,784
Building
Sandton St Gauteng Commer Multi 77.87 74.8 83.0
Andrews cial 10,169
Complex
Sandton Gauteng Commer Multi 70.23 72.1 73.0
Sunninghill cial 8,774
Place
104,460 527.0 573.5
Note:
(1) The purchase price of R527 million excludes estimated acquisition
costs of R4.1 million and an escalation of 0.01644% of the purchase
price for each property for each day from 1 May 2010 to the date(s) of
registration of the transfer of each property into Vukile`s name in
the relevant deeds registry office.
(2) The value of the properties was determined as at 1 July 2010 by the
independent external property valuer, Gensec Property Services
Limited, trading as JHI.
The impact of this acquisition on Vukile`s geographic, sectoral and lease
expiry profile is insignificant.
Set out below is further information relating to the geographic and
sectoral profiles of the property acquisition, as well as the vacancy
profiles (by sector) before and after the property acquisition:
Analysis Rentable Weighted Net Income Average Average Vacant Area
Area average Year One Rental annua July 2010
(mSquared) rental (9 months) Escala lised (mSquared/%)
Year One (Rand) tion property
(R/mSquared Existing yield
/month) Leases
Geographical 104,460 51.12 36,375,155 7.9% 9.5% 4,936 4.7%
Gauteng 30,690 74.76 14,095,089 8.8% 8.0% 2,343 7.6%
KwaZulu- 39,559 25.58 8,019,984 8.5% 9.3% 272 0.7%
Natal
Mpumalanga 13,934 48.40 3,429,930 7.7% 12.1% 538 3.9%
Northwest 9,784 69.16 7,244,036 7.0% 12.2% - 0.0%
Northern 10,494 65.00 3,586,117 7.7% 10.6% 1,783 17.0%
Cape
Sectoral 104,460 51.12 36,375,155 7.9% 9.5% 4,936 4.7%
Retail 20,278 67.01 10,830,153 7.2% 11.6% 1,783 8.8%
Office 30,690 74.76 14,095,089 8.8% 8.0% 2,343 7.6%
Industrial 39,559 25.58 8,019,984 8.5% 9.3% 272 0.7%
Mixed use 13,934 48.40 3,429,930 7.7% 12.1% 538 3.9%
4. Forecast information relating to the property acquisition
The forecast financial information relating to the property acquisition for
the 9 months ending 31 March 2011 and the 12 months ending 31 March 2012 is
set out below. The forecast financial information has not been reviewed and
reported on by the reporting accountant in terms of Section 8 of the JSE
Listings Requirements and is the responsibility of the company`s directors.
Forecast 9 Forecast
months 12 months
ending 31 ending 31
March 2011 March
R`000 2012
R`000
Forecast revenue (1)(2) 60,693 92,096
Property expenditure (24,112) (35,803)
Operational net income 36,581 56,293
Net profit after tax 24,701 34,620
Earnings available for 16,853 30,014
distribution
Yield(3) 9,5% 10,5%
Note:
(1) Contracted rental income constitutes 79% of forecast gross rental
income and 51% of forecast gross rental income for the 9 months to 31
March 2011 and the 12 months to 31 March 2012, respectively.
(2) Uncontracted rental income for the 9 months to 31 March 2011 is 21%
and for the 12 months to 31 March 2012 is 49% of forecast gross rental
income.
- Leases expiring during the periods have been forecast on a lease-
by-lease basis, with particular regard as to the likelihood of
existing tenants renewing their leases. Where appropriate a
vacancy provision has been allowed based on the expected
lettability of the particular premises. Revenues forecast for
the period after the expiry of the leases have been included in
uncontracted revenue and have been based on current market-
related rentals.
(3) Based on operational net income for a full 12 months to 31 March 2011
and assuming a total purchase price at 1 July 2010, inclusive of
costs, of R536.4 million.
5. Pro forma financial effects of the property acquisition
The pro forma financial effects of the property acquisition on net asset
value and net tangible asset value per linked unit have not been disclosed
as they are not significant.
6. Circular and withdrawal of cautionary announcement
Unitholders are advised that the circular relating to the property
acquisition will be posted in due course.
As the property specific information and the financial information relating
to the property acquisition and the properties, as required by the JSE
Listings Requirements, have now been published, unitholders are no longer
required to exercise caution when dealing in their Vukile linked units.
Roodepoort
25 May 2010
Investment bank, corporate adviser and transaction sponsor
Nedbank Capital, a division of Nedbank Limited
JSE sponsor
Barnard Jacobs Mellet Corporate Finance (Proprietary) Limited
NSX sponsor
IJG Securities (Proprietary) Limited
Reporting accountants and auditors
Grant Thornton
Date: 25/05/2010 14:00:02 Produced by the JSE SENS Department.
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