| Thu 3 Nov 2011, 12:56 | | VIF - Vividend Income Fund Limited - Acquisition of a new property |
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VIF
VIF
VIF - Vividend Income Fund Limited - Acquisition of a new property
Vividend Income Fund Limited
Previously known as Business Venture Investments No 1381 (Proprietary)
Limited
Incorporated in the Republic of South Africa
(Registration Number 2010/003232/06)
JSE Alpha Code: VIF
ISIN: ZAE000150918
("Vividend" or "the Company")
ACQUISITION OF A NEW PROPERTY
1. THE UNION STREET ACQUISITION
Linked unitholders of the Company are hereby advised that the
Company has entered into an agreement with Plascon Property Holdings
(Proprietary) Limited to acquire the property and letting
enterprise, commonly known as "Union Park" ("the Union Street
Property"), situated at 14 Union Street Alberton North Alberton
("the Union Street Acquisition").
The effective date of the Union Street Acquisition shall be the date
of transfer of the Union Street Property into the name of the
Company, which, subject to fulfilment of the conditions precedent,
is expected on or about 1 April 2012.
2. RATIONALE FOR THE ACQUISITION
The Union Street Acquisition is consistent with Vividend`s strategy
of identifying and acquiring properties that have free cash-flow
yields that provide adequate value enhancement to linked unitholders
from the effective date of their acquisition. The Union Street
Acquisition will add diversification to the Company`s portfolio by
introducing an industrial element to its earnings while at the same
time maintaining the quality, sustainability and growth potential of
its lease profile.
3. PURCHASE CONSIDERATION
The purchase consideration applicable to the Union Street
Acquisition is R51 300 000 (fifty one million three hundred thousand
rand), payable in cash against transfer of the Union Street Property
into the name of the Company.
4. PRO FORMA FINANCIAL EFFECTS OF THE UNION STREET ACQUISITION
The pro forma financial effects of the Union Street Acquisition on
net asset value and net tangible asset value per linked unit are not
significant and have therefore not been disclosed.
5. FORECAST INFORMATION ON THE UNION STREET ACQUSITION
The forecast financial information relating to the Union Street
Acquisition for the financial periods ended 31 August 2012 and 31
August 2013 is 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 Limited and is
the responsibility of the Company`s directors.
Forecast for the 5 Forecast for the 12
month period ended month period ended
31 August 2012 31 August 2013
Revenue 3,271,344 8,127,151
Operating Costs 611,714 1,519,711
Net Operating 2,659,630 6,607,440
Income
Total comprehensive - -
Income attributable
to equity holders
Annualised yield, 12.44% 12.88%
calculated with
reference to the
applicable
financial year
ended 31 August
Notes:
Contractual Revenue includes Gross Rentals and other
recoveries but excludes any adjustment applicable to the
straight lining of leases.
Operating costs include all utility and council charges
applicable to the property.
The forecast information for the 5 month period ended 31
August 2012 has been calculated from the anticipated effective
date of the Union Street Acquisition, being 1 April 2012.
Contractual Revenue constitutes 100% of the Revenue for both
the 5 month period ended 31 August 2012 and for the 12 month
period ended 31 August 2013.
Un-contracted Revenue constitutes 0% of the Revenue for both
the 5 month period ended 31 August 2012 and for the 12 month
period ended 31 August 2013.
100% of Net Operating Income is distributed to linked unit
holders, as interest, in accordance with the Debenture Trust
Deed of the Company.
6. PROPERTY SPECIFIC INFORMATION
Details regarding the Union Street Acquisition are set out below:
Property name Union Park
Location 14 Union Street, Alberton
North, Alberton
Region Gauteng
Sector Industrial
Site Area (m2) 230,000
GLA (m2) 28,633
Single or multi-tenanted Multi-tenanted
A Tenant classification by GLA 60%
A Tenant classification by 74%
Gross Contractual Revenue
Weighted average Gross Rental R21.82
per m2
Vacancy by GLA 5,287m2 or 18.5%
Annualised property yield 12.44% (YR 1)
13.24% (YR2)
Purchase price R51 300 000
Purchase Price per GLA R1,792 per m2
Value R51 300 000
Notes:
The weighted average escalation percentage, calculated by GLA,
within the Union Street Property lease profile is 6.1%.
The weighted average lease period, calculated by GLA, within
the Union Street Property lease profile is 3.5 years.
The value of the Union Street Property of R51 300 000 was
arrived at by a directors valuation as at 2 November 2011. The
directors of the Company are not independent and are not
registered as professional valuers or as professional
associate valuers in terms of the Property Valuers Profession
Act, No 47 of 2000.
Save for costs associated with the transfer of the Union
Street Property, which are anticipated to be R85 000, no
expenditure will be incurred by the Company in connection with
the Union Street Acquisition.
An `A Tenant` is defined as an anchor or (inter)national
tenant with a low default-risk.
`Gross Rental` is defined as basic rental plus operating cost
recoveries.
7. CONDITIONS PRECEDENT
The Union Street Acquisition is subject the following applicable
conditions precedent:
a.) The satisfactory completion of a due diligence investigation
performed by the Company on the Union Street Property and
letting enterprise, by 21 November 2011;
b.) The shareholders of Plascon Property Holdings (Proprietary)
Limited passing the required resolution in terms of Section 112
of The Companies Act 71 of 2008 by 31 December 2011; and
c.) The Company obtaining the appropriate level of debt funding
from new and/or existing debt providers by 31 January 2012
The Company is entitled to waive the conditions precedent set out in
paragraphs a) and c) above
8. WARRANTIES
Plascon Property Holdings (Proprietary) Limited have provided the
Company with warranties and indemnities that are usual to a
transaction of this nature.
9. CATEGORISATION
The Union Street Acquisition is a Category 2 acquisition in terms of
the Listings Requirements of the JSE Limited.
Cape Town
3 November 2011
Sponsor
PSG Capital (Pty) Limited
Date: 03/11/2011 12:56:03 Produced by the JSE SENS Department.
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