| Fri 13 Apr 2012, 13:00 | | SAC - SA Corporate Real Estate Fund - Announcement regarding the disposal of |
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SAC
SAC
SAC - SA Corporate Real Estate Fund - Announcement regarding the disposal of
11 properties by SA Corporate to Fairvest Property Holdings Limited
SA Corporate Real Estate Fund
(Incorporated in the Republic of South Africa)
A Collective Investment Scheme in property registered in terms of the
Collective
Investment Schemes Control Act, No. 45 of 2002 and managed by SA Corporate
Real Estate Fund Managers Limited (Registration number 1994/009895/06)
Share Code: SAC ISIN Code: ZAE000083614
("SA Corporate" or "the Fund")
ANNOUNCEMENT REGARDING THE DISPOSAL OF 11 PROPERTIES BY SA CORPORATE TO
FAIRVEST PROPERTY HOLDINGS LIMITED ("FAIRVEST" OR "THE PURCHASER")
1. Introduction
SA Corporate unitholders are advised that SA Corporate has entered into
three heads of agreements ("the Agreements") with Fairvest for the
disposal of eleven investment properties ("the Properties") from
various entities within the SA Corporate group to Fairvest ("the
Disposal"). The following properties being disposed of from their
relevant entities:
1.1 SA Corporate Real Estate Trust Scheme and SA Retail Properties
Proprietary Limited holding a half share each in:
- "Tokai Junction", situated at 236 Main Road, Tokai, Western
Cape for a disposal consideration of R84.9 million.
1.2 SA Corporate Real Estate Trust Scheme
- "210 Church Street", situated at 210 Church Street,
Pietermaritzburg for a disposal consideration of R23 million;
- "212 Church Street" situated at 212 Church Street,
Pietermaritzburg for a disposal consideration of R30
million;
- "425 West Street", situated at 425 West Street, Durban for a
disposal consideration of R54.5 million;
- "Main Street, Gingindlovu", situated at Main Street,
Gingindlovu for a disposal consideration of R10.6 million;
- "Mkuze Corner", situated at corner Eagle Avenue and Falcon
Street, Mkuze for a disposal consideration of R15.0 million;
and
- "The Ridge", situated at corner Mozart & Paul Kruger Streets,
Wilgeheuvel for a disposal consideration of R35.0 million.
1.3 SA Retail Properties Proprietary Limited
- "Clubview Corner", situated at 527 Harvard Avenue, Pretoria
for a disposal consideration of R35.0 million;
- "Middelburg Pick n` Pay", situated at corner Church and
Joubert Street, Middelburg for a disposal consideration
of R31.0 million; and.
- "Omniplace", situated at Bella Rosa Street, Bellville for a
disposal consideration of R20.0 million.
- "St. Georges Square", situated at Corner Knysna Road and
Third Street, George for a disposal consideration of R44.0
million.
The effective date of the Disposal ("the Effective Date") will be the
first business day after the fulfilment or waiver (as the case may be)
of the last of the conditions precedent as set out in paragraph 4 below
and is anticipated to be 1 September 2012.
2. Rationale for the Disposal
The Disposal is in line with SA Corporate`s strategy to invest in large
high quality properties that offer a low risk profile that will support
sustainable long-term distribution growth.
3. Consideration for the Disposal
The total consideration for the Disposal is R383 million ("the
Consideration"), payable by Fairvest in cash on the transfer date,
which is expected to be on or about 1 October 2012.
In the medium-term, the Consideration will be used by SA Corporate to
invest in high quality investment properties and to reinvest into
certain existing assets for upgrades and tenant driven expansions. In
the interim, the Consideration will be invested to reduce interest-
bearing borrowings.
4. Conditions precedent
The Disposal is subject to the following conditions:
- within forty-five (45) Days of the Date of Signature, the
Purchaser confirms in writing to the Seller that the Purchaser is
satisfied with the Due Diligence Investigation ("DDI");
- within twenty-one (21) Days of the Date of Signature, the Seller
confirms in writing to the Purchaser that any pre-emptive rights
contained in the Leases have been waived or, if applicable, the
consent required from any tenant has been obtained;
- the board of directors of the Fund Manager or any delegated
authority gives its written approval to this transaction within
fourteen (14) Days of the Date of Signature;
- the Trustee of the Seller gives its written approval to the
Disposal within seven (7) Days after the approval by the Fund
Manager;
- the board of directors of the Purchaser gives its written approval
to the Disposal within seven (7) Days of the completion of the
DDI;
- where applicable, the parties procure the written consent of the
Municipality or other authority to the terms of these agreements;
- Competition Commission approval; and
- the Purchaser providing written proof to the Seller within 90 days
of fulfilment of its due diligence, that the Purchaser has raised
the Funding.
Should any of the conditions precedent not be fulfilled within the
stipulated time periods, the Agreements shall lapse and be of no
further force or effect, unless the Parties have agreed in writing to
an extension of the stipulated time periods or variation thereto.
5. Unaudited pro forma financial effects of the Disposal
Based on SA Corporate`s consolidated audited financial statements for
the year ended 31 December 2011, the financial effects of the Disposal
on SA Corporate`s net asset value per unit (NAV) and net tangible asset
value per unit ("NTAV") have not been disclosed as these are not
significant.
6. Forecast information on the Properties
The summarised forecast financial information relating to the
Properties for the three months ending 31 December 2012 and for the
twelve months ending 31 December 2013, which is the responsibility of
SA Corporate`s directors, is set out below. The forecast financial
information has not been reviewed and reported on by the Fund`s
auditors.
Forecast Forecast
3 months 12 months
ending ending
31 December 31 December
2012 2013
R`000 R`000
Gross rentals 15 914 66 297
Contracted revenue 15 914 66 297
Uncontracted revenue 0 0
Net rental income before 9 657 39 387
interest
Net rental income after 9 657 39 387
interest and taxation
Notes:
1. The forecast information for the 3 months ending 31 December 2012
has been calculated from the date of transfer..
7. Specific information relating to the Properties
Details of the Properties are as follows:
Property Location Sector GLA Weighted Vacancy Selling Value(1
m2 average by price )
rental rentable Rm Rm
per aream2
m2(3)
210 Church Pietermarit Retail 1,897 120 23.0 23,3
Street zburg CBD -
212 Church Pietermarit Retail 1,963 131 30.0 27,1
Street zburg CBD -
425 West Durban CBD Retail 9,559 55 54.5
Street - 56,3
Main Street Gingindlovu Retail 2,992 32 10.6 10,3
Gingindlovu -
Mkuze Mkuze Retail 4,452 57 15.0 13,5
Corner -
The Ridge Wilgeheuwel Retail 4,770 169 35.0 36,3
968
St George`s George Retail 11,190 73 44.0 44,7
Square 2,682
Clubview Centurion Retail 5,830 99 35.0 32,8
Corner 915
Middelburg Middelburg Retail 7,698 89 31.0 32,8
Pick n Pay 1,093
Tokai Tokai Retail 7,613 143 84.9 81,5
Junction 29
Omniplace Bellville Office 2,714 101 20.0 20,7
594
Notes:
1. The value of the Properties of R379.3 million was arrived at by
the independent external property valuers, African Corporate Real
Estate Solutions (Proprietary) Limited as at 31 December 2011.
2. The Properties are being sold at a weighted average aggregate exit
yield of 9.8%.
3. Weighted average rental is gross rental plus recoveries.
Categorisation
The Disposal constitutes a Category 2 transaction in terms of the JSE
Limited Listings Requirements.
13 April 2012
Cape Town
Investment bank and sponsor
Nedbank Capital
Date: 13/04/2012 13:00:01 Produced by the JSE SENS Department.
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