| Fri 19 Sep 2003, 16:36 | | Announcement |
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Sycom - Announcement
Sycom Property Fund
("Sycom" or "the Fund")
A Collective Investment Scheme in property registered in terms of the Collective
Investment Schemes Control Act, No 45 of 2002 and managed by Sycom Property Fund
Managers Limited (Registration number 1986/002756/06)
JSE share code: SYC
ISIN: ZAE000019303
Issue of units to fund a new acquisition, details of further acquisitions and
investments and withdrawal of cautionary announcement
1. Introduction
Further to the announcement dated 8 August 2003, unitholders are advised that
Sycom, in conjunction with Nedbank Corporate, has concluded a unit placement in
respect of the funding for the acquisition of a new turnkey development relating
to the new head office for attorneys Sonnenberg Hoffmann & Galombik ("the SHG
property").
2. The placing
The placing process entailed the issue by Sycom of units at an issue price of
R9.10 per unit, together with a notional distribution prepayment of R0.45 per
unit resulting in an effective issue price of R9.55 per unit. The distribution
prepayment effectively compensates existing unitholders for any dilution in the
dividend payable for the 6 months to 30 September 2003 as a consequence of the
new units in issue, which rank pari passu with the existing units from the date
of their issue. Through this process, Sycom has raised approximately R125
million in capital and approximately R6 million in notional distribution
prepayments. On 8 September, the JSE Securities Exchange SA ("JSE") listed the
13 758 239 Sycom units that were issued in this regard, taking Sycom"s total
issued units to 183 356 239.
3. The SHG property
As previously reported, the Fund concluded an agreement to acquire the SHG
property to be constructed on the Cape Town Foreshore, near the new Convention
Centre at a total cost of R152 million. The building will comprise 13 800m2 of A
grade office accommodation and 1 700m2 of ground floor retail. Construction of
the SHG property commenced during May 2003 and the completion thereof is
expected to be by the end of October 2004. 72 percent of the offices have been
pre-let of which 7 000m2 comprises a 10-year lease with attorneys Sonnenberg
Hoffman Galombik. This property is expected to produce an initial yield of 12,6
percent.
4. The balance of the acquisitions and investments
The balance of the acquisitions and investments referred to in the announcement
relate to:
* The acquisition of a 70% undivided share in a new R286-million regional
shopping centre to be developed in Paarl. The centre, located on a 15ha site
adjacent to the N1 freeway, will provide approximately 35,500m2 of rentable
space. The project, due for completion during March 2005, is expected to show an
initial yield of 12,0%.
* The funding of a further R124 million extension to the Somerset Mall Shopping
Centre, of which the fund owns a 50% undivided share. The extensions will
provide a further 13,200m2 of rentable space, boosting the centre to a total of
approximately 64,500m2, with an anticipated initial yield of around 12,7%. The
extension is due for completion by December 2004.
* The funding of a R112 million redevelopment of two of the Fund"s existing
Sandton buildings which is due for completion during July 2004 and is expected
to show an initial yield of 12,0%.
Given that these projects will take between 10 and 18 months to complete,
alternative means of funding, dependent on market conditions, will be considered
and implemented prior to completion of the projects. In the interim, the Fund
has adequate borrowing capacity to cover the full cost of these projects.
The acquisitions and investments are in line with Sycom"s strategy of focusing
the portfolio into one, comprising large office and retail properties with a
predominance of national tenants on a long-term bases.
While these transactions will not have a material effect on Sycom"s distribution
per unit or NAV in the short term, they are both earnings and NAV enhancing
going forward.
5. Withdrawal of cautionary
As the placing process has now been finalised, unitholders need no longer
exercise caution when trading in their Sycom units.
Johannesburg
19 September 2003
Investment bank and sponsor
Nedbank Corporate
Asset manager
Corovest-NIB Property Asset Managers (Pty) Limited
Date: 19/09/2003 04:27:35 PM Produced by the JSE SENS Department
