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Paramount Property Fund Limited - Acquisition Of Further Properties
Paramount Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 1945/019928/06)
Share code: PRA ISIN: ZAE000028577
("Paraprop" or the "company")
ACQUISITION OF FURTHER PROPERTIES
1. Introduction
Further to the cautionary announcement dated 11 September 2002, Paraprop linked
unitholders are advised that, subject to the conditions precedent set out in
paragraph 5 below, Paraprop has entered into further agreements to acquire the
following properties at a total cost of R160 701 750:
Pinewood Office Park and 33 Impala Road, Chislehurston ("the Barrow portfolio")
at a total cost of R50 155 000;
Ruimsig Boulevard Shopping Centre ("the Ruimsig property") at a total cost of
R34 750 000;
Pavilion Office Park, Rivonia ("the Pavilion property") at a total cost of
R19 000 000;
Portions 1 and 2 of Erf 44, Centurion, namely Mediscor House and SA Sports
Commission Office Building ("the Centurion portfolio") at a total cost of
R18 318 000;
1 and 2 Constantia View Office Park and Uniclox House, Meyersdal ("the Renprop
portfolio") at a total cost of R17 150 000;
65 and 66 Kyalami Boulevard, Kyalami Business Park ("the VWV portfolio") at a
total cost of R10 800 00; and
Greystones Heliport and Mini Units ("the Greystones portfolio") for a total cost
of R10 528 750.
(collectively "the acquisitions").
Details relating to the acquisitions are set out below:
Property Purchase B debentures
price Cash Linked units Rand value
Rand Rand Rand value
Barrow portfolio 50 155 000 30 093 000 9 592 000 10 470 000
Pinewood Office 41 375 000 24 825 000 8 275 000 8 275 000
Park
An office block 8 780 000 5 268 000 1 317 000 2 195 000
situated at 33
Impala Road,
Chislehurston
Vendors:
Pinewood Office
Park (Pty)
Limited and
Stand 22
Chislehurston
(Pty) Limited of
101 Central
Street,
Houghton,
Johannesburg
The Ruimsig 34 750 000 22 500 000 5 000 000 7 250 000
property
Ruimsig
Boulevard
Shopping Centre
Vendor: Ruimsig
Boulevard (Pty)
Ltd c/o 30
Eduard Street,
Roodepoort 1724
The Pavilion 19 000 000 11 500 000 3 700 000 3 800 000
property
Pavilion Office
Park
Vendor: The
Trustees of the
Pavilion
Property Trust,
c/o The Pavilion
12 Wessels
Street, Rivonia,
Sandton
Centurion 18 318 000 14 654 400 - 3 663 600
portfolio
Mediscor House 7 064 000 5 651 200 - 1 412 800
(office block)
SA Sports
Commission 11 254 00 9 003 200 - 2 250 800
Office Building
Vendors: Erf
44/1 Centurion
CC and Crashall
CC c/o Premier
Plumbing, 426
Louis Botha Ave,
Bagleyston,
Johannesburg
Renprop 17 150 000 11 046 320 2 673 680 3 430 000
portfolio
1 Constantia 6 750 000 4 350 000 1 050 000 1 350 000
View Office Park
2 Constantia 4 800 000 3 100 000 740 000 960 000
View Office Park
Uniclox House, 5 600 000 3 596 320 883 680 1 120 000
Meyersdal
(office block)
Vendors: Erin-
Jet Developments
(Pty) Limited
and the Trustees
of the Pro Erin
Trust c/o
Renprop College
House, Peter
Place, Lyme
Park, Sandton
VWV portfolio 10 800 000 6 730 000 1 910 000 2 160 000
65 Kyalami 5 300 000 3 305 000 935 000 1 060 000
Boulevard
(office block)
66 Kyalami 5 500 000 3 425 000 975 000 1 100 000
Boulevard
(office block)
Vendors: Stand
65 Kyalami Park
(Pty) Limited
and Stand 66
Kyalami Park
(Pty) Limited
c/o VWV Studios,
66 Kyalami
Boulevard,
Kyalami Business
Park
Greystones 10 528 750 6 948 975 1 474 025 2 105 750
portfolio
Greystones 6 055 370 3 996 544 847 752 1 211 074
Heliport
Greystones Mini 4 473 380 2 952 431 626 273 894 676
Units
(industrial
units)
Vendors: The
Trustees of the
Greystones Glen
Anil Trust and
Be-Vest 0026
(Pty) Limited
c/o Scribante
Construction
(Pty) Ltd 54
Alexander Road,
Westmead
TOTAL 160 701 750 103 472 695 24 349 705 32 879 350
The cash portion of the purchase considerations will be raised by way of long-
term loans from the company`s bankers and the placing of equity as set out in
paragraph 5 below.
The issue prices of the linked units will be as follows:
Property Basis
Barrow portfolio The issue price will be 460 cents per linked
unit.
Renprop and Based on the average traded price of the
Centurion company`s linked units on the JSE for the 30
portfolios days preceding 1 November 2002 subject to a
maximum of 500 cents per linked unit.
VWV portfolio and Based on the average traded price of the
the Pavilion and company`s linked units on the JSE for the 30
Ruimsig properties days preceding 1 November 2002.
Greystones The issue price will be 480 cents per linked
unit.
The issue price paid for the linked units will be apportioned 450 cents to the A
debentures and the balance to the shares.
The issue price of the B debentures will be equal to the issue price of the
linked units as set out above in respect of each portfolio subject, where
applicable, to a maximum of 500 cents per B debenture.
2. Effective dates
The effective date:
of the Greystones portfolio was 1 May 2002;
of the Barrow, Centurion, Renprop and VWV portfolios and the Ruimsig and
Pavilion properties will be 1 November 2002.
3. Rationale
The acquisitions are in line with the strategy of the company to provide linked
unitholders with a sustainable growing annuity income stream and capital growth.
4. Financial effects
Shareholders are advised that the financial effects set out below have been
compiled from historic financial information and are included to comply with the
Listings Requirements of the JSE. In a number of instances the properties were
in the process of being constructed or were acquired through sale-and-leaseback
arrangements and were, therefore, not generating full rental income during the
financial period shown.
The board of directors therefore advise shareholders that these historic
financial effects do not reflect the anticipated contribution of the
acquisitions to Paraprop`s future earnings. The board of directors have
carefully reviewed the acquisitions and are of the opinion that these
acquisitions will further enhance Paraprop`s current property portfolio.
The following table sets out the pro forma financial effects of the acquisitions
based on the notes and assumptions given below:
Before the After After After After
acquisitions Barrow Pavilion Centurion Renprop
portfolio property portfolio portfolio
Earnings
and
headline
earnings 49.9 46.8 46.7 50.4 49.7
per
linked
unit
(cents)
Tangible
and net
tangible 484.1 481.7 484.7 484.6 484.5
asset
value per
linked
unit
(cents)
Weighted
average
number of
linked 19 164 1 043 370 290 267
units in
issue
(000`s)
After After Consolidated Movement
Grey-stones VWV After the (cents) (%)
portfolio portfolio acquisitions
Earnings
and
headline
earnings 50.4 48.7 43.7 -6.2 -12.4
per
linked
unit
(cents)
Tangible
and net
tangible 484.0 484.4 483.4 -0.7 -0.1
asset
value per
linked
unit
(cents)
Weighted
average
number of
linked 154 191 21 479
units in
issue
(000`s)
Notes:
The "before the acquisitions" column is based on the company`s unaudited results
for the six months ended 30 April 2002.
The price of the linked units to be issued in respect of the Renprop, Centurion
and VWV portfolios and the Pavilion and Ruimsig properties has been based on 500
cents per linked unit as the exact price thereof has still to be determined.
The Ruimsig property has only recently been completed and accordingly there is
no historical income information available. However, the acquisition of this
property results in an increase in the company`s tangible and net tangible asset
value per linked unit from 484.1 cents to 484.9 cents.
Interest has been calculated at 13% per annum on new loans, with no capital
repayments during the period.
5. Condition precedent
The acquisition of the Ruimsig property is subject to the finalisation of some
outstanding aspects of the due diligence study. The acquisition of the
Centurion portfolio is subject to the placement of linked units to the value of
R2 904 400 before the date of transfer of the Centurion portfolio in order to
part settle the cash portion of the purchase consideration.
6. Circular to linked unitholders
A circular containing details of the Barrow portfolio and the Ruimsig property
will, subject to the approval of the JSE relating to the categorisation of the
Ruimsig property, be sent to linked unitholders within 28 days of this
announcement.
Cape Town
8 October 2002
Corporate adviser and Attorneys
sponsor Cliffe Dekker Inc.
Barnard Jacobs Mellet
Corporate Finance
Independent reporting Independent property valuers
accountants and auditors Mills Fitchet
Deloitte & Touche
Fund and property managers
Spire Property Services
Date: 09/10/2002 07:05:00 AM Produced by the JSE SENS Department
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