| Mon 2 Aug 2010, 9:00 | | VKE - Vukile Property Fund Limited - Update on the proposed acquisition of |
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VKE
VKE
VKE - Vukile Property Fund Limited - Update on the proposed acquisition of
properties from Sanlam Life Insurance Limited
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 Insurance
Limited
1. Introduction
Vukile unitholders ("Unitholders") are referred to the announcements dated
29 October 2009, 29 April 2010 and 25 May 2010, containing details of the
agreement and addenda entered into by Vukile with Sanlam Life Insurance
Limited ("Sanlam Life"), to acquire a portfolio of nine properties ("the
Properties") for R527 million ("the Property Acquisition").
Unitholders are advised that following the publication of the announcement
on 25 May 2010, the following developments with respect to the Property
Acquisition have taken place:
1.1 a further addendum to the agreement, dated 6 July 2010, was entered
into between Vukile and Sanlam Life amending the date for fulfilment
of the last of the conditions precedent to 15 September 2010;
1.2 the company was requested by the JSE Limited ("the JSE") to replace
Gensec Property Services Limited, trading as JHI, as the independent
property valuer. Accordingly, the company appointed Colliers Property
and Facilities Management (Proprietary) Limited ("Colliers") as the
independent property valuer; and
1.3 due to the passage of time, the forecast financial information
relating to the Property Acquisition has been updated.
Accordingly, this announcement contains updated information on the
Properties and forecast financial information relating to the Property
Acquisition.
2. Updated property specific information
Updated information on the Properties is set out below:
Property name Weighted Total Purchase Value of
average rentable Price(1) property (2)
rent per area
m2
(R/m2) (m2) (ZAR` m) (ZAR `m)
Amanzimtoti Jeffels Road 18.96 60.4 56.9
Warehouse 22,645
Kimberley Kim Park 62.37 46.7 50.6
10,494
Nelspruit Sanlam Centre 53.07 38.9 44.4
13,934
Pinetown Westmead Kyalami 34.36 57.8 60.1
Park 16,914
Pretoria Hatfield Sanlam 74.53 40.7 37.9
Building 5,358
Pretoria Sanwood Park 77.47 54.0 38.9
6,388
Rustenburg Edgars Building 70.05 81.6 109.6
9,784
Sandton St Andrews Complex 73.23 74.8 62.3
10,169
Sandton Sunninghill Place 73.02 72.1 76.9
8,774
104,460 527.0 537.6
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 during July 2010 by the
independent external property valuer, Colliers.
Set out below is the updated information relating to the geographic and sectoral
profiles of the Properties:
Analysis Rentable Weighted Net Averag Average Vacant Area
Area average Income e annualised September
(mSquare rental Year One Rental property 2010
d) Year One (7 Escala yield (mSquared/%
(R/mSquared/ months) tion )
month) (R`000) Existi
ng
Leases
Geographical 104,460 53.08 32,241 8.1% 9.9% 5,441 5.2%
Gauteng 30,690 80.25 13,756 8.8% 9.3% 2,844 9.3%
KwaZulu- 39,559 25.83 6,465 8.6% 8.9% 358 0.9%
Natal
Mpumalanga 13,933 48.73 2,879 8.1% 11.7% 771 5.5%
Northwest 9,784 84.77 6,123 7.0% 11.8% - 0.0%
Northern 10,494 52.56 3,018 7.6% 10.8% 1,468 14.0%
Cape
Sectoral 104,460 53.08 32,241 8.1% 9.9% 5,441 5.2%
Retail 20,278 68.10 9,140 7.2% 11.4% 1,468 7.2%
Office 30,690 80.25 13,756 8.8% 9.3% 2,844 9.3%
Industrial 39,559 25.83 6,465 8.6% 8.9% 358 0.9%
Mixed use 13,933 48.73 2,880 8.1% 11.7% 771 5.5%
3. Updated forecast information relating to the Property Acquisition
The updated forecast financial information relating to the Property
Acquisition for the 7 months ending 31 March 2011 and the 12 months ending
31 March 2012 is set out below. The updated forecast financial information
has 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 7 Forecast 12
months ending months ending
31 March 2011 31 March 2012
R`000 R`000
Forecast revenue (1)(2) 51,258 93,260
Property expenditure (19,017) (35,792)
Operational net income 32,241 57,468
Net profit after tax 21,295 30,710
Earnings available for 14,999 29,615
distribution
Yield(3) 9,9% 10,6%
Note:
(1) Contracted rental income 7 months to 31 March 2011 is 80% and for the
12 months to 31 March 2012 is 59% based on existing signed lease
agreements.
(2) Uncontracted rental income for the 7 months to 31 March 2011 is 20%
and for the 12 months to 31 March 2012 is 41% 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 September 2010, inclusive of
costs, of R541.7 million.
4. Salient dates and times
Set out below are the salient dates and times relating to the property
acquisition:
2010
Circular and notice of general meeting posted to Monday, 2 August
Vukile unitholders on
Last day to lodge forms of proxy for the general Monday, 23 August
meeting (by 10:00) on
General meeting to be held at 1st Floor, Meersig Tuesday, 24 August
Building 1, Constantia Boulevard, Constantia
Kloof, Gauteng (10:00) on
Results of the general meeting released on Sens on Tuesday, 24 August
Results of the general meeting published in the Wednesday, 25 August
press on
Note: These dates and times are subject to amendment. Any such amendment
will be released on SENS and in the press.
Roodepoort
2 August 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
Independent Reporting Accountants
Grant Thornton
Independent valuer
Colliers Property and Facilities Management (Proprietary) Limited
Date: 02/08/2010 09:00:02 Produced by the JSE SENS Department.
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