Spearhead Property Group - Acquisitions And Disposals Of Properties
Spearhead Property Group
(Incorporated in the Republic of South Africa)
(Registration number 1996/05827/06)
JSE Share code: SPE ISIN:ZAE000019162
("Spearhead" or "the company")
ACQUISITIONS AND DISPOSALS OF PROPERTIES
Introduction
Further to the cautionary announcement dated 2 September 2002, pertaining to
the acquisition and disposal of a number of properties by Spearhead, the
directors hereby disclose details of these transactions.
Acquisitions of properties
In April 2002, Spearhead acquired the McCarthy Parow dealership from FSJ
Investments (Pty) Limited at a cost of R6,2 million. Two Shoprite properties, in
the Strand and Vredenburg in the Western Cape, were acquired from Regal Royal
Development (Pty) Limited for a total cost of R8,43 million in May 2002. These
acquisitions are expected to have little impact on earnings in the short-term,
however, as the properties have strong covenants with fixed escalations, the
directors expect them to have a positive effect on future earnings growth.
In May 2002, Spearhead concluded an agreement for the acquisition of Siltek
Park in Montague Gardens from Erfrad (Pty) Limited for a consideration of R8
million. Transfer on this property remains pending but is expected the first
half of October 2002.
All of the abovementioned properties were acquired utilising bond financing.
Disposals of properties
In December 2001, Spearhead disposed of an excess tract of land in the
Spearhead Business Park development in Montague Gardens to Paarl Media (Pty)
Limited for a consideration of R1,8 million.
The company disposed of 47 on Strand on 1 July 2002 for an amount of R16,9
million to Louis Group Limited. In September 2002, Spearhead concluded
agreements for the disposal of Lindum Lodge (to Mark Sandak-Lewin) and Lakeside
Shopping Centre (to Blue Dot Properties) for considerations of R3,2 million and
R15 million, respectively. The transfers on these two properties are pending but
expected to be finalised by November 2002. The proceeds on disposal of all of
the abovementioned properties were used to reduce Spearhead`s bond financing.
None of these transactions have a material effect on the earnings and net
asset value per share of the company.
Rationale for the transactions
In line with the company`s long-term objective to grow the quality of the
property portfolio and further enhance its tenant mix and diversity, Spearhead
has embarked on a policy of acquiring medium to high yielding properties and
disposing of properties which do not meet its investment criteria.
Cape Town
8 October 2002
Sponsor
Bridge Capital
Date: 08/10/2002 05:10:00 PM Produced by the JSE SENS Department
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