| Thu 19 Aug 2010, 17:05 | | CPL - Capital - Disposal of a property |
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CPL
CPL
CPL - Capital - Disposal of a property
Capital Property Fund
Share Code: CPL
ISIN: ZAE000001731
("Capital")
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
(Registration No. 1980/009531/06)
("PFM")
DISPOSAL OF A PROPERTY
INTRODUCTION
Unitholders are advised that Capital has on 19 August 2010 concluded an
agreement for the disposal of the property known as Grand Central comprising Erf
4648, 4649 and 4650 Cape Town, to Kitso Capital (Proprietary) Limited ("the
purchaser") for R400 million ("the transaction").
EFFECTIVE DATE
The effective date of the transaction will be the date of registration of
transfer of the property into the name of the purchaser. The purchase price is
payable in cash.
The transaction agreement contains warranties normal for transactions of this
nature.
CONDITIONS PRECEDENT
The transaction is conditional on the fulfilment of the following:
- approval by the board of directors and investment committee of the
purchaser;
- the satisfactory outcome of a due diligence investigation to be conducted
by the purchaser;
- the purchaser procuring written confirmation from a financial institution
reasonably acceptable to Capital that it has been granted loan funding for
the transaction;
- confirmation from Capital that tenants have waived all or any pre-emptive
rights and/or options to acquire the property in terms of leases;
- the unconditional approval of the Competition Authorities for the
implementation of the transaction; and
- the City of Cape Town consenting to the cession of Capital`s rights in
terms of the City of Cape Town`s lease, to the purchaser.
RATIONALE FOR THE TRANSACTION AND USE OF PROCEEDS
The disposal of Grand Central is in line with Capital`s strategy of becoming a
specialised commercial and industrial fund owning only A-grade properties.
The cash proceeds will be used by Capital to reduce interest bearing borrowings.
THE PROPERTY
Details of the property including the valuation at 31 December 2009 attributed
to the property by Peter Parfitt of Quadrant Properties (Proprietary) Limited,
an independent professional associated valuer, are as follows:
Property Region Sector Weighted Rentable Purchase Valuation
description average area price
rental
per m2
(R) (m2) (R`000) (R`000)
Erf 4648, 4649 Western Retail 95 33 616 159 000 358 000
and 4650, Cape Cape
Town, in the
City of Cape
Town, Cape
Division
FINANCIAL INFORMATION
The pro forma financial effects of the transaction on Capital`s financial
results for the six months ended June 2010 ("the financial information") are set
out below and have not been reviewed or reported on by the Fund`s auditors.
The pro forma financial effects have been prepared for illustrative purposes
only, to provide information on how the transaction may impact the financial
information. Due to their nature, the pro forma financial effects may not fairly
present Capital`s financial position, changes in equity, and results of
operations or cash flows after the transaction. The pro forma financial effects
are the responsibility of the directors of PFM.
The pro forma effect of the transaction on the financial information of Capital
for the six months ended June 2010 is as follows:
Unadjusted Pro forma % Change
before the after the
transaction transaction
(cents) (cents)
Earnings per unit 30,58 36,41 19,1%
Weighted average number of units in 717 578 059 717 578 059
issue
Notes and assumptions:
- The amounts set out in the "Unadjusted before the transaction" column have
been extracted without adjustment from the financial information.
- The financial information and the pro forma financial effects thereon have
been prepared in compliance with International Financial Reporting
Standards.
- The transaction is assumed for the purposes of earnings per unit to have
been implemented on 1 January 2010.
- The disposal was at the fair value of the asset disposed of.
- The historical rental income and related property expenditure was extracted
from the financial information.
- The cash proceeds of R400 million have been utilised to reduce interest
bearing borrowings at an effective interest rate of 9,5%.
- The pro forma financial effects of the transaction on the net asset value,
tangible net asset value, headline earnings and distribution per unit are
not significant.
For the six months to 30 June 2010, the net rental income attributable to Grand
Central was 19,2 million.
CATEGORISATION OF THE TRANSACTION
The transaction is a category 2 transaction in terms of section 9.5(a) of the
Listings Requirements of the JSE Limited.
19 August 2010
Sponsor
Java Capital
Date: 19/08/2010 17:05:02 Produced by the JSE SENS Department.
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