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Acucap - Acquisition of a turnkey development in Kempton Park
Acucap Properties Limited
(Incorporated in the Republic of South Africa)
(Registration number 2001/021725/06)
Share code: ACP ISIN: ZAE000037651
("Acucap" or "the Company")
Acquisition of a turnkey development in Kempton Park
1. INTRODUCTION
Nedbank Corporate is authorised to announce that the board of Acucap has
approved the signing of binding heads of agreement between Acucap and Keystone
Investments (Pty) Ltd ("the developer") relating to the acquisition by Acucap of
a retail shopping mall turnkey development in Kempton Park ("the mall").
Construction of the mall has commenced, and the developer estimates completion
by October 2004. Thereafter, subject to the fulfilment of the conditions
precedent referred to in paragraph 4 below, Acucap will take transfer of the
mall.
2. RATIONALE FOR THE ACQUISITION
The development is adjacent to the existing 20,500 mSquared Kempton Park
Hyperama, which is owned by Acucap. The new 39,000 mSquared mall is to be linked
to the existing Hyperama, creating a regional retail centre of just under 60,000
mSquared ("the centre"). The centre"s anchor tenants will be Checkers Hyper,
Pick "n Pay, Woolworths and Edgars with a full complement of national fashion
retailers, together with a range of franchise and other line shops.
The acquisition is in line with the focus of Acucap of acquiring good quality
properties that will contribute to sustained growth in distributions and to the
long-term growth in the market value of the Company"s property portfolio. In
addition, as disclosed in the final results announcement dated 29 May 2003,
Acucap intends remaining overweight in the retail sector due to this sector"s
continued relative out-performance of the office and industrial sectors. Such
out-performance has made quality regional retail centres a sought after asset
type. High demand, coupled with relatively scarce supply, has resulted in assets
of this type trading at low purchase yields, making them difficult to acquire
without diluting earnings.
By acquiring the centre on a turnkey basis, Acucap has not only been able to
secure what it believes will be a quality regional retail centre but has also
been able to do so without any dilution in earnings and furthermore will not
incur any risk until transfer of the mall takes place.
The acquisition will increase the value of the Company"s property portfolio from
R964 million to R1,184 million. Retail will account for just over 70% of income
and approximately 80% of the portfolio will be situated in Gauteng.
3. PURCHASE PRICE AND FINANCIAL EFFECTS
The anticipated purchase price will be R220 million, which amount will be funded
out of internal cash resources, utilising the Company"s borrowing facilities and
the residual cash proceeds of the issue of Acucap linked units for cash,
completed in June 2003.
The purchase price will be based on a yield of 12.8% and, if applied to the
current historic yield and net asset value of Acucap, would not have a material
effect on either, under current market conditions.
4. CONDITIONS PRECEDENT
The acquisition is subject, inter alia, to the fulfilment of the following
conditions precedent:
! completion of the mall by the developer in accordance with the specifications
and the tenanting thereof in terms of the
agreed profile;
! the approval of the acquisition, to the extent required, of Acucap linked
unitholders in general meeting; and
! the requisite approvals of the acquisition to the extent required, of the JSE
Securities Exchange SA and the Competition Authorities.
5. FURTHER ANNOUNCEMENT
Acucap linked unitholders will be informed of any general meeting required to
approve the acquisition and the fulfilment of the other conditions precedent.
Johannesburg
18 September 2003
Investment bank and sponsor
Nedbank Corporate
Corporate law advisers and consultants
EDWARD NATHAN & FRIEDLAND (PTY) LTD
(REGISTRATION NUMBER 1999/026464/07)
Date: 18/09/2003 05:46:05 PM Produced by the JSE SENS Department
