| Tue 27 Mar 2012, 11:01 | | IPF - Investec Property Fund Limited - Acquisition of British American |
|
IPF
IPF
IPF - Investec Property Fund Limited - Acquisition of British American
Tobacco Property
INVESTEC PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number 2008/011366/06)
Share code: IPF ISIN: ZAE000155099
("Investec Property Fund" or "the Fund")
ACQUISITION OF BRITISH AMERICAN TOBACCO PROPERTY
1. Introduction
Linked unit holders are hereby advised that Investec Property Fund, a
company primarily involved in property investment, has entered into an
agreement ("Sale and Purchase Agreement") to acquire a property in
Waltloo, Pretoria, occupied by British American Tobacco South Africa
("the Property") from Maggs Street Property Proprietary Limited (the
"Vendor"), a 100% subsidiary of Investec Property Limited, for R40
million ("the Purchase Consideration") ("the Proposed Transaction").
The Purchase Consideration will be funded by debt and paid in cash to
the Vendor upon registration of transfer of the Property into the name
of the Fund.
2. Rationale for the Proposed Transaction
The Proposed Transaction is consistent with the Fund`s objective to
build a quality portfolio of properties with strong contractual cash
flows in order to achieve value enhancement and sustainable
distributions to unitholders. Given the high-quality multinational
tenant and the terms of the lease, the Property is being acquired at an
attractive yield of 10.25% which the directors believe offers good value
and will improve the earnings and growth prospects of the Fund. The
independent valuation set out in 5 below supports this view.
3. Description of the Property
The Property is located at 285 Maggs Street, Waltloo, Pretoria
comprising Erf 172 Waltloo Extension 1 Township, Pretoria. The building
is located in an area dominated by large industrial users and is also
adjacent to the well-established industrial area of Silverton, north
east of Pretoria. The Property is conveniently situated, offering easy
access to the N1 and the N4 highways. Sufficient shade netted parking
bays are also provided on site.
The Property is an industrial warehouse facility providing Gross
Lettable Area ("GLA") of 13,170mSquared such that the Fund is acquiring
the property at R3,037 per mSquared. The GLA comprises 87% warehouse
space and 13% of offices.
The Property was specifically redeveloped for British American Tobacco
South Africa ("BATSA") who is the sole tenant on the Property. The
premises provide warehousing facilities for British American Tobacco PLC
("BAT").
BATSA is a wholly owned subsidiary of BAT, the multinational tobacco
company headquartered in London, United Kingdom. BAT has a market cap of
approximately R731 billion and operates in more than 180 countries
employing about 50,000 people worldwide.
The current lease with BATSA commenced in December 2011 providing a
gross rental of R30.04 per mSquared, escalating at 8% annually. The
lease extends for a 5 year term with the option to renew for a further 5
years thereafter. Any rates increases above 8% are recoverable from the
tenant. In terms of the lease the Fund will be responsible for insurance
and repairs and maintenance.
4. Redevelopment
The tenant required a redevelopment of the property as a condition to
the lease and this has been completed by the Vendor prior to
commencement of the lease.
5. Valuation of the Property
An independent valuation of the Property, has been performed by Mills
Fitchet Magnus Penny Proprietary Limited ("Independent Valuer"), which
at R43.4 million exceeds the Purchase Consideration by 8.5%. The
Independent Valuer is an independent registered valuer as defined in
section 13 of the JSE Listings Requirements ("Listings Requirements").
6. Effective date
The effective date for the Proposed Transaction is 1 December 2011 and
there are no outstanding conditions to the Proposed Transaction other
than for transfer to take place. With the effective date being 1
December 2011the Fund is entitled to receive the net property income
from this date and is paying the Vendor interest on the Purchase
Consideration at a rate of Jibar plus 2.25%. The Purchase Consideration
will be paid to the Vendor on the date of transfer of the Property into
the name of the Fund.
7. Financial effects
As the Purchase Consideration will be funded by debt, the Proposed
Transaction will not have a material effect in the first year as it does
not contribute more than 3% to the pro forma distribution per linked
unit, pro forma earnings per linked unit, pro forma headline earnings
per linked unit, pro forma net asset value per linked unit or pro forma
tangible net asset value per linked unit of the Fund.
8. Small related party transaction
The Proposed Transaction constitutes a small related party transaction
in terms of the Listings Requirements as Investec Property Limited, a
wholly-owned subsidiary of Investec Limited, holds 100% of the Vendor`s
issued share capital and is the manager of the Fund.
The JSE Limited has been provided with a summary of the sworn valuation
of the Property by the Independent Valuer. The full valuation report is
available for inspection at the registered office of the Fund during
normal business hours until 30 April 2012.
Johannesburg
27 March 2012
Investment Bank and Sponsor Attorneys
Date: 27/03/2012 11:01:46 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
