| Mon 28 Oct 2024, 7:10 | | DELTA PROPERTY FUND LIMITED - Proposed Disposal of Five Properties |
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Proposed Disposal of Five Properties
DELTA PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2002/005129/06)
JSE share code: DLT
ISIN: ZAE000194049
(Approved as a REIT by the JSE)
("Delta" or the "Company")
PROPOSED DISPOSAL OF FIVE PROPERTIES
1. Introduction
Delta shareholders are hereby advised that the Company has entered into five separate sale agreements (the "Sale
Agreements") with five distinct purchasers (the "Purchasers"), who are not associates of one another, to dispose of the
following properties (the "Properties"):
1.1 a sale agreement with Luis Antonio Narciso on behalf of a company to be formed/ nominee ("Purchaser One"), to
dispose of its property situated at 67 Middle Road, Bardene Extension 42, Boksburg made up of Erf 1281, Bardene
Extension 42, including immovable assets thereon known as the "In2Fruit" building ("Property One"), for a cash
consideration of R10.8 million;
1.2 a sale agreement with Tupelostax Investments Proprietary Limited ("Purchaser Two"), to dispose of its property
situated at 244 Vonkprop Road, Samcor Park Extension 1, Silverton made up of Erf 20, Samcor Park Extension 1, City
of Tshwane including immovable assets thereon known as the "Protea Coin" building ("Property Two"), for a cash
consideration of R2.8 million
1.3 a sale agreement with Guder Properties Proprietary Limited ("Purchaser Three"), to dispose of its property situated
at 25 -29 Rissik Street, Marshall Town, Johannesburg made up of Erven 242, 246 and 1100 Marshalltown Township,
including immovable assets thereon known as the "Unisa" building ("Property Three"), for a cash consideration of
R18.5 million;
1.4 a sale agreement with Aberaha Trading Proprietary Limited ("Purchaser Four"), to dispose of its property situated at
17 Henshall Street, Nelspruit made up of Erf 115 Nelspruit, including immovable assets thereon known as the "Stats
House" building ("Property Four"), for a cash consideration of R8.5 million;
1.5 a sale agreement with Bemath Poverty Alleviation Trust ("Purchaser Five"), to dispose of its Leasehold Rights in
respect of the Property situated at 260 Monty Naicker Street, Durban made up of Erf 11942, Durban, including
immovable assets thereon known as the "Pine Parkade" building ("Property Five"), for a cash consideration of
R23 million;
collectively the "Disposals".
2. Rationale and use of proceeds
As part of the Company's business and portfolio strategy of optimisation, it was agreed to dispose of assets which are no
longer strategic to the Company. In keeping with this strategy, the Company has taken a decision to exit non- core properties
within its portfolio. All of the Properties cited above fall into the classification of "non- core properties" and were disposed
of via auction. This auction sale method was elected primarily for the purpose of achieving an efficient disposal outcome on
Properties which collectively comprise a sub-set of the Company's portfolio which is significantly underperforming and
diluting the overall portfolio performance. This underperformance is due to a prolonged and high combined vacancy rate
amongst them with limited prospect of significant improvement in the short to medium term on account of prevailing market
conditions.
The combined proceeds from the Disposals of R63.60 million will be utilised by the Company to reduce debt and to reduce
vacancy levels by 2.0% from 33.4% (as of 29 February 2024) to 31.4% (implying that 25 531 m2 of vacant space will be
disposed of).
The Company further expects to reduce and minimise annual operating costs as a result of the Disposals, thereby directly
enhancing the Company's return on investment.
3. Terms and conditions of the Disposals
3.1 Purchasers
3.1.1 The ultimate beneficial shareholder of:
3.1.1.1 Purchaser One is Luis Antonio Narciso;
3.1.1.2 Purchaser Two is Marinus Schoeman;
3.1.1.3 Purchaser Three is Hussen Reshid Shikur;
3.1.1.4 Purchaser Four is Tadesse Haile Aberaha and Rahel Gaim Desbele; and
3.1.1.5 Purchaser Five is Suleman Bemath.
3.1.2 None of the abovementioned Purchasers are a 'related party' in terms of the JSE Limited ("JSE") Listings
Requirements.
3.2 The Disposals
3.2.1 Delta has agreed to sell and the Purchasers have agreed to purchase the Properties with effect from the date
on which the registration of transfer of the Properties into the names of the respective Purchasers is effected,
which date the Company anticipates will be approximately 14 February 2025.
3.3 Disposal considerations
Payable as follows
Property Cash consideration (exclusive Non-refundable deposit Guarantees to be delivered
of VAT) (already received by Delta's within sixty days from the
R'million conveyancers) date of signature of the Sale
R'million Agreement(s)
R'million
Property One 10.80 0.54 10.26
Property Two 2.80 0.28 2.52
Property Three 18.5 1.85 16.65
Property Four 8.50 0.425 8.075
Property Five 23.00 2.30 20.70
3.4 Conditions precedent
The Disposals are subject to fulfilment (or waiver, as the case may be) of the following conditions precedent:
3.4.1 within 10 business days of signature of the applicable Sale Agreement, the applicable Purchaser shall have
provided Delta with a copy of the resolutions of the board of directors of the applicable Purchaser authorising
the applicable Purchaser to conclude the Disposal on the terms and conditions of the applicable Sale
Agreement;
3.4.2 within 120 calendar days after the signature date, the parties have complied with the JSE Listings
Requirements (insofar as this may be applicable), and obtained such consents and approvals as may be
required;
3.4.3 within 120 calendar days after the signature date, to the extent necessary, any prior written approval
required from the Competition Authorities has been obtained in terms of the Competition Act, No 89 of
1998; and
3.4.4 only with respect to Property Five, within 120 calendar days following the signature date, Delta obtains
consent in writing from the lessor of Property Five to conclude the Disposal.
4. Financial and property-related information in respect of the Properties
Property One
Gross lettable area: 11 177m2
Weighted average rental(1): R0/m2
Net operating (loss)/income¹: (R0.579 million)
Vacancy rate(1): 100%
Effective date of the Disposal: On or about 14 February 2025, being the anticipated transfer
date of Property Two into the name of Purchaser Two
Sector: Industrial
Valuation(3) R20 000 000.00
Property Two
Gross lettable area: 2 090m2
Weighted average rental(1): R 0/m2
Net operating (loss)/income¹: (R1.17 million)
Vacancy rate(1): 100%
Effective date of the Disposal: On or about 14 February 2025, being the anticipated transfer
date of Property Three into the name of Purchaser Three
Sector: Office – Other
Valuation(3) R5 100 000.00
Property Three
Gross lettable area: 10 055m2
Weighted average rental(1): R10/m2
Net operating (loss)/income(¹): (R2.85 million)
Vacancy rate(1): 95.1%
Effective date of the Disposal: On or about 14 February 2025, being the anticipated transfer
date of Property Four into the name of Purchaser Four
Sector: Office – Other
Valuation(3): R43 000 000.00
Property Four
Gross lettable area: 2 827m2
Weighted average rental(1): R50.3/m2
Net operating (loss)/income(¹): R0.75 million
Vacancy rate(1): 58%
Effective date of the Disposal: On or about 14 February 2025, being the anticipated transfer
date of Property Six into the name of Purchaser Six
Sector: Office – Government
Valuation(2) R21 840 000.00
Property Five
Gross lettable area: 2 986m2
Weighted average rental(1): R125.5/m2
Net operating (loss)/income(¹): R4.0 million
Vacancy rate(1): 35.8%
Effective date of the Disposal: On or about 14 February 2025, being the anticipated transfer
date of Property Eight into the name of Purchaser Seven
Sector: Retail
Valuation(3) R83 000 000.00
Notes:
1. The weighted average rental, net operating (loss)/income and vacancy rates in respect of Properties have been
extracted from the Company's annual financial statements for the period ended 29 February 2024, which were
prepared in terms of International Financial Reporting Standards.
2. The valuation of Property Four was performed as at 29 February 2024 by Riaan Fourie (CBRE) who is independent
from the Company and registered as a professional valuer in terms of the Property Valuers Profession Act, No. 47 of
2000.
3. The valuations of the other Properties were performed as at 29 February 2024 by Hendrik Fouche (Valuation DNA)
who is independent from the Company and registered as a professional valuer in terms of the Property Valuers
Profession Act, No. 47 of 2000.
The financial information contained in this announcement is the responsibility of the Board of Directors of Delta and has not
been reviewed or reported on by Delta's auditors or reporting accountant.
5. Categorisation
The Disposals of Property One, Property Three, Property Four, and Property Five, are classified as Category 2 transactions
and Property Two as an uncategorised transaction in terms of the JSE Listings Requirements. Accordingly, these Disposals
are not subject to shareholder approval.
Johannesburg
28 October 2024
Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Date: 28-10-2024 07:10:00
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