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VPF
VPF
VPF - Vunani Property Investment Fund Limited - Acquisition by VPIF of an
office park in Port Elizabeth and two properties in Rustenburg
VUNANI PROPERTY INVESTMENT FUND LIMITED
(formerly Vunani Property Investment Fund Proprietary Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2005/019302/06)
JSE code: VPF
ISIN: ZAE000157459
("VPIF" or "the company")
ACQUISITION BY VPIF OF AN OFFICE PARK IN PORT ELIZABETH AND TWO
PROPERTIES IN RUSTENBURG
1. INTRODUCTION
Unitholders are advised that VPIF has entered into Sales of
Enterprise Agreements for the acquisition by it of:
1.1 the rental enterprise conducted as a going concern on Erfs
11322 and 1698, Walmer, Port Elizabeth, known as The Lion Roars
Office Park, ("the Lion Roars property" or "the Lion Roars
transaction") with Hobbes Holdings Proprietary Limited ("the
Lion Roars vendor");
1.2 a building situated on 87 Ridder Street, Xstrata, Rustenburg
("the Xstrata property" or the Xstrara transaction) with the
Trustees of the Michael Viljoen Trust, Master`s number
IT6645/1995 and RCV Projects CC (registration number
2000/045175/23) ("the Xstrata vendor"); and
1.3 a 2 storey office block situated on 12 Kgwebo Street, Mabe
Park, Rustenburg ("the Mabe property" or "the Mabe
transaction") with Lizard Creek Properties Proprietary Limited
("the Mabe vendor"),
(collectively "the properties" or "the transactions").
The agreements contain warranties normal for transactions of this nature.
2. INFORMATION RELATING TO THE PROPERTIES
`2.1 The Lion Roars property:
Description of the Erf 11322 Walmer in the Nelson Mandela Bay
property: Metropolitan Municipality, Division of Port
Elizabeth, measuring 4 367 square metres;
and
Erf 1698 Walmer in the Nelson Mandela Bay
Metropolitan Municipality, Division of Port
Elizabeth, measuring 3 468 square metres.
Location: 53 Heugh Road, Walmer, Port Elizabeth
GLA: 4 280 square metres and 136 parking days,
which constitutes 100% offices
Weighted average R116.93 per square metre
rental per square
metre:
Purchase price and The purchase price of the property is set
other costs: out in paragraph 4 below. The following
other expenditure will be incurred in
respect of the property:
Agent`s commission is payable by the
vendor.
All costs incidental to the transfer of the
property - approximately R86 625
All amounts due in terms of the agreement
shall, unless paid on due date, bear
interest at the Prime Rate from the due
date to date of payment.
Independent Date of valuation - 01 December 2011
valuation: Market value: R52 300 000
2.2 The Xstrata property:
Description of the Portion 19 of Erf 1833 Rustenburg Extension
property: 4, measuring 7 016 square metres.
Location: 91 Ridder Street, Ooseinde, Rustenburg.
GLA: 3 720 square metres constituting 100%
offices.
Weighted average R69.46 square metres
rental per square
metre:
Independent Date of valuation - 01 December 2011
valuation: Market value: R29 150 000
2.3 The Mabe property:
Description of the Erf 114 Waterval East Extension 4,
property: measuring 2 612 square metres.
Location: 12 Kgwebo Avenue, Waterval East Extension
4, Rustenburg.
GLA: 1 642 square metres plus 54 bays
constituting 100% offices.
Weighted average R138.27 square metres
rental per square
metre:
Independent Date of valuation - 01 December 2011
valuation: Market value: R24 700 000
The properties have been valued by Mr. MRB Gibbons, an authorised
Professional Valuer, registered without restriction in terms of
section 19 of the Property Valuers Professional Act, 2000 (Act 17 of
2000), of Mills Fitchet Magnus Penny Proprietary Limited.
3. RATIONALE FOR THE TRANSACTIONS
VPIF was listed on the JSE Limited ("JSE") on 11 August 2011. The
main purpose of the listing was to provide VPIF with a platform for
acquisitive growth and these transactions are a step towards VPIF`s
stated intention to grow the portfolio by the acquisition of high
quality yield-enhancing properties.
The Lion Roars property will give an initial yield of 12%. The
property is located in Walmer which is the prime decentralised
office node and is tenanted by `blue chip` tenants.
The Xstrata property and the Mabe property are both well-located
properties, recently constructed, A-Grade buildings occupied by
`blue chip" tenants on long leases. These properties have a forward
yield of 10,6%.
4. PURCHASE CONSIDERATIONS
The cash purchase considerations of the properties will be funded by
debt and the amounts include VAT levied at the rate of 0% in terms
of section 11(1)(e) of the VAT Act.
The Lion Roars The Xstrata The Mabe property:
property: property:
R52 100 000 R28 982 000 R24 000 000
5. EFFECTIVE DATES
The effective dates of the transactions will be the dates of
registration of transfer of ownership of the properties.
6. CONDITIONS PRECEDENT
The transactions are unconditional and are subject to transfer of
the properties.
7. PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTIONS
The pro forma financial effects of the transactions, individually
and jointly on net asset value and net tangible asset value per
linked unit are not significant and have therefore not been
disclosed.
8. FORECAST INFORMATION RELATING TO THE TRANSACTIONS
The forecast financial information relating to the transactions for
the financial periods ending 30 June 2012 and 30 June 2013 are set
out below. The forecast financial information has not been reviewed
or reported on by a reporting accountant in terms of section 8 of
the Listings Requirements of the JSE and is the responsibility of
the company`s directors.
8.1 The Lion Roars property
Forecast for Forecast for the
the 7 months 12 months ending
ending 30 June 2013
30 June 2012 R`000
R`000
Gross income 3 510 7 340
Property Expenditure (560) (1 195)
Net operating income 2 950 6 145
Finance costs (2 425) (4 837)
Debenture interest (525) (1 308)
Net profit before tax 0 0
Taxation 0 0
Net profit after 0 0
taxation
Distributable earnings: 525 1 308
8.2 The Xstrata property
Forecast for Forecast for the
the 7 months 12 months ending
ending 30 June 2013
30 June 2012 R`000
R`000
Gross income 2 048 3 719
Property Expenditure (394) (713)
Net operating income 1 654 3 007
Finance costs (1 571) (2 692)
Debenture interest (83) (314)
Net profit before tax 0 0
Taxation 0 0
Net profit after 0 0
taxation
Distributable earnings: 83 314
8.3 The Mabe property
Forecast for Forecast for the
the 7 months 12 months ending
ending 30 June 2013
30 June 2012 R`000
R`000
Gross income 1 671 3 089
Property Expenditure (288) (519)
Net operating income 1 383 2 570
Finance costs (1 301) (2 230)
Debenture interest (81) (340)
Net profit before tax 0 0
Taxation 0 0
Net profit after 0 0
taxation
Distributable earnings: 81 340
Notes:
1. Gross income includes all tenant recoveries while Property
Expenditure includes all consumption expenditure as well as property
and asset management fees.
2. VPIF will raise debt to fund the transactions and therefore 100% of
the debt for the transactions has been attributed to the individual
transactions.
3. The debenture interest has been calculated in accordance with the
provision of the Debenture Trust Deed.
9. CLASSIFICATION OF THE TRANSACTIONS
The Lion Roars transaction is classified as a Category 2 transaction
in terms of the Listing Requirements of the JSE.
The Xstrata transaction and the Mabe transaction, when aggregated,
are classified as a Category 2 transaction in terms of the Listing
Requirements of the JSE as they have been entered into by the
company with vendors who are associated with each other.
The transactions jointly constitute a Category 2 transaction.
10. RENEWAL OF CAUTIONARY ANNOUNCEMENT
Unitholders are referred the cautionary announcement published by
the company on 23 September 2011 and advised that the company
remains involved in negotiations in respect of property acquisitions
that if concluded, could have a material effect on the price of
VPIF`s units. Unitholders are therefore advised to continue
exercising caution in dealing with the units of VPIF until such time
that a further announcement is made.
Sandton
28 October 2011
Corporate Adviser and Joint Sponsor
Vunani Corporate Finance
Independent Lead Sponsor
Grindrod Bank Limited
Date: 28/10/2011 12:50:01 Produced by the JSE SENS Department.
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