| Wed 25 Apr 2012, 17:15 | | ANP - Annuity Properties Limited - Replacement of the announcement sent at |
|
JSE
ANP
ANP - Annuity Properties Limited - Replacement of the announcement sent at
15h35 - Abridged Pre-Listing Statement
Annuity Properties Limited
(formerly Niqsha Beleggings CC)
Incorporated in the Republic of South Africa
(Registration number 2011/145994/06)
(Tax number 9050047191)
Share code: ANP ISIN: ZAE000165643
("Annuity" or "the company")
ABRIDGED PRE-LISTING STATEMENT
Abridged pre-listing statement relating to the listing of Annuity on the
securities exchange operated by the JSE Limited ("JSE") with effect from the
commencement of business on Friday, 4 May 2012.
This abridged pre-listing statement is not an invitation to the public to
subscribe for or an offer to the public to purchase linked units in Annuity.
It is issued in compliance with the JSE Listings Requirements for the purpose
of giving information to the public with regard to Annuity.
The information in this abridged pre-listing statement has been extracted from
the detailed pre-listing statement for Annuity, dated 25 April 2012 ("the pre-
listing statement"). For a full appreciation of Annuity the pre-listing
statement should be read in its entirety.
1. INTRODUCTION
Annuity is a limited liability, variable loan stock company formed for
the purpose of investing in direct real estate, where the directors
believe there is potential for income generation and capital growth.
Annuity was converted into a public on 12 December 2011. Annuity has
entered into agreements for the acquisition of four high quality
commercial and retail properties based in Gauteng and the Western Cape,
namely the Oakfields shopping centre ("the Oakfields property"), the
Sasfin head office ("the Sasfin property"), the Woolworths` Call Centre
("the Woolworths` Call Centre property") and the Cell C head office ("the
Cell C property") (collectively, "the portfolio"). The total portfolio
value of these four properties is R586.5 million, further details of
which are set out in paragraph 4 below.
The JSE has granted Annuity a listing in respect of 93 340 341 linked
units in the "Real Estate - Real Estate Holdings and Development" sector
of the Main Board of the securities exchange operated by the JSE, under
the abbreviated name "Annuity", share code: ANP and ISIN: ZAE000165643,
with effect from the commencement of trading on Friday, 4 May 2012 ("the
listing").
The linked unit holder spread requirements of the JSE have been met by
way of a private placement to selected investors to subscribe for a
maximum of 75 597 314 linked units at R5.00 per linked unit, representing
a maximum subscription value of R377 986 570. The private placement,
which was subject to a minimum overall subscription of linked units to
the value of R184 228 000 being achieved and the listing of all issued
linked units on the JSE, has been fully subscribed and the linked unit
holder spread requirements of the JSE have been met.
The proceeds of the private placement will be used by Annuity to acquire
the portfolio as set out above. All of the properties will be acquired
for cash, except for the Sasfin property, which will be acquired for a
combination of cash (80% of the purchase consideration) and linked units
(20% of the purchase consideration). The total purchase consideration of
the portfolio including acquisition costs and listing related fees is
R602.1 million, to be funded through debt of R139.5 million and equity of
R462.6 million.
In terms of the transfer and registration of the properties into the name
of Annuity, the Woolworths` Call Centre property was acquired and
transferred into Annuity`s name on 23 March 2012. The Oakfields property
and the Sasfin property will be transferred to Annuity on listing and the
Cell C property is anticipated to be transferred to Annuity within four
weeks after listing.
2. THE PROMOTERS OF ANNUITY
The promoters of Annuity are Derek Greenberg, Martin Ettin, Lionel
Levinsohn, Schalk Strydom, Daniel Rubenstein, Steven Levinsohn and Joshua
Greenberg ("the promoters").
With more than 50 years of collective experience in the listed property
sector, the promoters boast a track record of building successful listed
property portfolios and generating attractive investment returns for
investors.
In 1999, Derek Greenberg, Lionel Levinsohn and Martin Ettin, the co-
founders of Annuity, co-founded Primegro Properties Limited ("Primegro"),
a property loan stock company which listed on the JSE in November 1999
with a portfolio value of circa R600 million. Following the
implementation of an aggressive growth strategy over the ensuing three
and a half year period, Primegro`s market capitalisation increased
significantly to circa R2.2 billion by May 2003, at which point Primegro
merged with Growthpoint Properties Limited ("Growthpoint").
In 2005, Derek Greenberg and Martin Ettin introduced and sold a
significant sized portfolio to CBS Properties Limited ("CBS"), an
unlisted, Cape focused property loan stock company, whereafter they
joined the company and listed it on the JSE in November 2005. At the time
of listing, CBS had a portfolio value of circa R1.1 billion, which
doubled to circa R2.3 billion in two years to October 2007, at which
point it was acquired by the Public Investment Corporation Limited
("PIC").
In addition to Messrs Greenberg, Ettin and Levinsohn, the management team
includes:
- Panico Theocharides, a CA (SA) with more than 13 years investment
banking and corporate advisory experience and previously a member of
Sasfin Holdings Limited`s ("Sasfin") executive committee. Panico has
extensive experience in all aspects of dealmaking. He advised
Growthpoint, Metboard Properties Limited, and Vukile Property Fund
Limited on various transactions over the years;
- Schalk Strydom, a CA (SA) with extensive experience in the financial
services sector, including specialist forensic accounting and
litigation support services. Schalk has advised many clients over
the years on mergers and acquisitions, restructuring and property
acquisitions. In addition Schalk has acted as an expert witness in
arbitration and High Court proceedings on various accounting and
business valuation matters as well as damages claims;
- Steven Levinsohn is a professional property valuer, registered with
the South African Council for the Property Valuers Profession. He
worked as a consultant for CB Richard Ellis Mass Appraisal Services
and was a portfolio manager at Primegro, where he was later promoted
to valuations director. In 2004, Steven joined Investec Property
Group as head of valuations and left to pursue his own interests in
2007. Steven is a well established and respected valuer in the
property valuations industry; and
- Daniel Rubenstein, a CA (SA) well networked in the property
industry. Daniel established a joint venture with Nandos for the
development of its retail properties and has provided advisory
services to Brait in sourcing private equity transactions on their
behalf. He co-founded Etana Financial Products Proprietary Limited,
a niche financial guarantee business. He has a proven track record
of sourcing attractive property investment opportunities and raising
acquisition finance, both debt and equity.
Derek Greenberg, Martin Ettin and Lionel Levinsohn, together with the
other promoters, are seeking to establish and list Annuity as a new
property loan stock company which aims to provide competitive yields,
underpinned by flagship properties and an aggressive acquisition
pipeline.
3. THE PURPOSE OF THE LISTING
The purpose of the listing of the linked units on the JSE is to:
- provide investors, both institutional and private, with an
opportunity to participate over the long term in the income streams
and capital growth of the company;
- provide the company with a platform to raise capital to pursue
growth and investment opportunities in the future;
- to enhance the liquidity and tradeability of the linked units;
- provide the company with access to a central trading facility
thereby providing liquidity to linked unit holders; and
- enhance the public profile and general public awareness of the
company.
4. PROPERTY INFORMATION
On listing, the property portfolio will comprise the Oakfields property,
Sasfin property and Woolworths` Call Centre property, valued at R456.5
million, with a total gross lettable area ("GLA") of 30 229 m2. The Cell
C property will be transferred into Annuity`s name after listing at which
time the portfolio will be valued at R586.5 million with a total GLA of
36 048 m2.
The Oakfields property is situated in the residential suburb of Northmead
Ext 4, Gauteng, on the corner of Oak Road and Hanekam Street. The A-grade
neighbourhood shopping centre has been recently renovated and is
currently 100% tenanted, with 70% national tenants, including Pick `n Pay
as the anchor tenant, occupying almost 40% of the GLA.
The Sasfin property is situated in the suburb of Waverley, Johannesburg,
Gauteng, on a mid block stand in Scott Street. The A-grade offices, which
have been recently constructed, have excellent exposure from the M1
Freeway overlooking Melrose Arch, and are the head offices of Sasfin Bank
Limited, a niche financial services business, owned by JSE-listed Sasfin.
The Woolworths` Call Centre property, also known as The Old Match
Factory, is a national heritage building situated in the old and
established suburb of Observatory, Cape Town, on the corner of Lower Main
Road and Howe Street. The buildings have recently been internally
refurbished to A-grade quality, retaining the outside facade with the
original roof as stipulated by the heritage rights granted to the
property, and are utilised as the call centre facilities for Woolworths
Financial Services, a joint venture between JSE-listed companies,
Woolworths Holdings Limited and ABSA Group Limited.
The Cell C property is situated in a prime location at 150 Rivonia Road,
corner of Marion Road and Rivonia Road, Sandown, Gauteng. The property
enjoys easy access to the Sandton CBD and is in close proximity to major
highways. The property comprises two office blocks located in an urban
office park environment of five units, and all five A-grade blocks are
occupied by well-known telecommunications operator, Cell C Proprietary
Limited ("Cell C"), as the company`s head office.
The portfolio`s sectoral profile by revenue contribution, excluding the
Cell C property is 70% offices and 30% retail and including the Cell C
property is 77% offices and 23% retail. The portfolio`s sectoral profile
by GLA, excluding the Cell C property is 62% offices and 38% retail and
including the Cell C property is 68% offices and 32% retail.
The geographic profile by revenue contribution, excluding the Cell C
property is 70% Gauteng and 30% Western Cape and including the Cell C
property is 77% Gauteng and 23% Western Cape. The geographic profile by
GLA, excluding the Cell C property is 63% Gauteng and 37% Western Cape
and including the Cell C property is 69% Gauteng and 31% Western Cape.
Amongst its comparable peers, Annuity has the distinct advantage of a
portfolio with a 0% vacancy profile. The company has secured long term
leases for the Woolworths` Call Centre property and the Sasfin property
with large national tenants, Woolworths Financial Services and Sasfin
Bank Limited. Due to the demand for retail space at the Oakfields
property and the current lease profile, this retail property currently
has a 0% vacancy profile as at date of listing.
The Cell C property which will transfer after listing will also be single
tenanted by Cell C, a large national tenant.
The annualised weighted average rental per square metre in the portfolio
as at 31 March 2013 is as follows:
Office Retail
Excluding Cell C R117.76 R84.15
Including Cell C R130.07 R84.15
The annualised weighted average rental escalation by GLA in the portfolio as
at 31 March 2013 is as follows:
Office Retail
Excluding Cell C 8.14% 7.29%
Including Cell C 8.34% 7.29%
5. MANAGEMENT OF THE FUND
Annuity will be managed by Annuity Asset Managers Proprietary Limited
("the manager") in terms of the asset management agreement entered into
between Annuity and the manager, and the properties will be managed by
Annuity Property Managers Proprietary Limited ("the property manager") in
terms of the property management agreement entered into between Annuity
and the property manager. The management team of the manager has
significant experience and a reputable track record in managing large
property companies. This management team will be responsible for managing
the company in an efficient manner, diligently and in good faith in
accordance with acceptable and prevailing industry standards, within an
approved budget, so as to achieve an optimum long-term yield and capital
growth of the company.
The manager and property manager are owned by the promoters and Sasfin,
which owns its interests through a wholly owned subsidiary. Sasfin has a
put option on its interest in the manager, in terms of which it is
entitled to put this interest to Annuity for a cash purchase
consideration, during a period of five years from the date of listing. In
the event that Sasfin exercises its put option, the manager will purchase
and cancel these shares in the manager in consideration for a reduction
in the asset management fee charged by the manager to Annuity.
A summary of the services to be provided by each of the manager and the
property manager, the fees payable by Annuity in respect thereof and the
terms of each of the asset management and property management agreements
are set out in the pre-listing statement.
6. INVESTMENT STRATEGY
Annuity`s objective is to establish a property portfolio with a value in
excess of R5 billion in the next five years, consisting of sustainable
income producing properties in the commercial, retail and industrial
sectors. Capital and income returns will be optimised for linked unit
holders through the regular review of the portfolio and pursuit of value
adding investment opportunities, identified through the promoters`
dealmaking abilities and entrenched networks within the industry.
Annuity may also, from time to time, develop and/or redevelop properties
to enhance value and support longer-term income and capital growth.
Annuity`s growth and investment strategy is to:
- deliver above average market returns;
- invest in a mix of retail, commercial and a small percentage of
quality industrial properties comprising A and B grade buildings
located in larger metropolitan areas;
- target an optimal tenant mix comprising 60% national tenants with a
minimum lease term of 5 years; and
- optimise and secure long-term distribution and capital growth.
7. PROSPECTS
The directors are of the opinion that the strength and experience of
Annuity`s management team, together with the track record and industry
network of the promoters, positions the company to realise its strong
growth prospects.
The promoters have held negotiations with various vendors seeking to
dispose of attractive investment properties. As at the date of this
abridged pre-listing statement, these negotiations had not progressed to
formal written agreements and linked unit holders will be advised of
these acquisition opportunities when appropriate.
Sasfin`s participation in Annuity provides an additional source of
property deal flow through Sasfin`s relationships and networks in the
industry.
8. SALIENT FINANCIAL INFORMATION
The tables below set out the salient unaudited forecast financial
information and salient unaudited pro forma financial position
information of Annuity.
Unaudited forecast financial information:
Salient information Forecast for the 11 Forecast for
months ending 31 the year
March 2013 ending 31
March 2014
Linked units in issue on 93 340 341 93 340 341
listing
Distribution per linked unit 41.22 48.03
(cents)
Earnings per linked unit 49.28 41.65
(cents)
Headline earnings per linked 41.50 52.64
unit (cents)
Distribution growth (based on 6.09%
annualised distributions)
Annualised forward yield 9.06% 9.61%
(based on a linked unit price
of R5.00)
Unaudited pro forma financial position information including the Cell C
property:
Number of linked units in issue 93 340 341
Net asset value per linked unit (cents) 499.49
Net tangible asset value per linked unit 499.49
(cents)
9. PRIVATE PLACEMENT
The offer, which was fully subscribed, comprised a private placement by
Annuity by way of an offer for subscription for a maximum of R377 986 570
comprising up to 75 597 314 linked units at a price of R5.00 per linked
unit, to selected investors, including, inter-alia:
- institutional investors in South Africa;
- the private clients of selected stockbroking companies in South
Africa; and
- other selected private investors.
10. MAJOR LINKED UNIT HOLDERS
As at the last practicable date prior to publication of the pre-listing
statement, being 16 April 2012 ("last practicable date"), the company did
not have a controlling linked unit holder. On listing date, the PIC will
own 39.6% of Annuity. The linked unit holder profile, highlighting linked
unit holders who will hold more than 5% in the linked unit capital of the
company on listing date, is as follows:
Name Number of linked Percentage
units held of linked
unit
holding in
Annuity
Major linked unitholders
PIC 37 336 136 40.0%
36One Asset Management 7 000 000 7.4%
Sasfin 6 716 000 7.2%
Other 42 288 205 45.4%
Total 93 340 341 100%
As a result of the private placement, the PIC will become a 40% linked
unit holder in Annuity. In terms of section 123 of the Companies Act, 71
of 2008, as amended and the Takeover Regulations a linked unit holder
acquiring control, being 35% or more of the linked units in a regulated
company, is required to make an offer to all linked unit holders of the
same class. The issue of the linked units in terms of the private
placement will therefore require the PIC to make a mandatory offer at a
price of R5 per linked unit to the minority linked unit holders of
Annuity within 30 days of the listing date ("the mandatory offer"),
unless a waiver of the requirement to make such mandatory offer is given
by a majority of the linked unit holders and the Takeover Regulation
Panel ("TRP").
The majority of Annuity linked unit holders holding Annuity linked units
as at the last practicable date have waived, and the TRP has provided an
exemption from compliance with, the requirement for the PIC to make the
mandatory offer.
11. DIRECTORS
The full names, ages, capacities, and business addresses of the directors
of Annuity are outlined below:
Name and age: Jabu Moleketi (54)
Capacity: Independent non-executive chairman
Qualifications: MSc & PGrad Dip Econ Principles (UOL), AMP (HBS)
Business address: 196 Francis Street, Observatory, Johannesburg, 2198
Name and age: Derek Greenberg (64)
Capacity: Joint chief executive officer
Qualifications: B.Sc (Eng), MBA, B.Com (Acc), Valuer
Business address: 15W, Apartment 37A, 63rd Street, New York,
New York 10023 and c/o Francois Marais of Glyn Marais
(2nd Floor, The Place, 1 Sandton Drive, Sandton,
2196)
Name and age: Panico Theocharides (42)
Capacity: Joint chief executive officer
Qualifications: B.Com (Hons), CA (SA)
Business address: Boundary Place, 18 Rivonia Road, Illovo, Sandton,
2196
Name and age: Schalk Strydom (42)
Capacity: Chief financial officer
Qualifications: B.Com (Hons), CA (SA), Registered Auditor SA,
Certificate in Forensic Accounting and Capital Gains
Tax
Business address: Boundary Place, 18 Rivonia Road, Illovo,
Sandton, 2196
Name and age: Daniel Rubenstein (30)
Capacity: Executive director
Qualifications: B.Com (Acc) Hons, CA (SA)
Business address: Boundary Place, 18 Rivonia Road, Illovo,
Sandton, 2196
Name and age: Martin Ettin (64)
Capacity: Non-executive director
Qualifications: BA Law, LLB
Business address: 514 Blackstone Boulavard, Providence, Rhode Island,
02906 USA and c/o Francois Marais of Glyn Marais (2nd
Floor, The Place, 1 Sandton Drive, Sandton, 2196)
Name and age: Eugene Loubser (63)
Capacity: Independent non-executive director
Business address: Unit no 11, Amberfield, 101 11th Avenue, Fairland,
Johannesburg, 2030
Name and age: Anthony Chait (58)
Capacity: Independent non-executive director
Qualifications: B.Acc (Wits), CA (SA), HDip Tax Law (Wits), HDip
Int Tax (UJ)
Business address: 57 Sixth Road, Hyde Park, 2196
Name and age: Sarah Williams (34)
Capacity: Independent non-executive director
Qualifications: B.Com (Hons), CA (SA)
Business address: The Pivot, Block E, 1st Floor, The Y Office,
Montecasino Boulevard, Fourways, 2191
Name and age: Tyrone Soondarjee (50)
Capacity: Non-executive director
Qualifications: B.Compt (Hons), CA (SA)
Business address: 29 Scott Street, Waverley, 2090
Name and age: Roland Sassoon (66)
Capacity: Alternate director to Tyrone Soondarjee
Qualifications: FCIS
Business address: 29 Scott Street, Waverley, 2090
Derek Greenberg and Martin Ettin are South African citizens and American
permanent residents and all the other directors are South African
citizens and residents.
12. DIVIDENDS AND DISTRIBUTION POLICY
The directors anticipate that the first dividend and distribution payable
to linked unit holders will be the dividend and distribution in respect
of the period from the listing date to 30 September 2012, which is
expected to be paid in December 2012.
It is the directors` intention to declare a bi-annual dividend and
distribution thereafter, based on results for the years ending 31 March
and the interim periods ending 30 September.
There are no arrangements in terms of which future dividends or
distributions are waived or agreed to be waived.
13. COPIES OF THE PRE-LISTING STATEMENT
Copies of the full pre-listing statement may be obtained from:
- Annuity at Boundary Place, 18 Rivonia Road, Illovo, Sandton, 2196;
- the sponsor and corporate advisor to Annuity, Sasfin Capital, a
division of Sasfin Bank Limited, at 29 Scott Street, Waverley,
Johannesburg, 2090;
- the independent sponsor to Annuity, KPMG Services Proprietary
Limited at 85 Empire Road, Parktown, Johannesburg, 2193; or
- the transfer secretaries, Link Market Services South Africa
Proprietary Limited at 13th Floor Rennie House, 19 Ameshoff Street,
Braamfontein, 2017,
during normal office hours between 25 April 2012 and 15 May 2012.
Waverley
25 April 2012
Corporate advisor and sponsor
Sasfin Capital
(a division of Sasfin Bank Limited)
Independent sponsor
KPMG
Independent valuer
JHI
Independent reporting accountants and auditors
PKF Chartered Accountants and Business Advisors
Attorneys
Glyn Marais in association with SNR Denton
Debenture trustee
Ironwood Trustees
Date: 25/04/2012 17:15:16 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.
