| Fri 26 Sep 2003, 18:52 | | GROWTHPOINT PROPERTIES LIMITED - ACQUISITION BY GR |
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GROWTHPOINT PROPERTIES LIMITED - ACQUISITION BY GROWTHPOINT OF THE WATERFALL
MALL REGIONAL SHOPPING CENTRE IN RUSTENBERG
GROWTHPOINT PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/004988/06)
Share code: GRT ISIN: ZAE000037669
("Growthpoint" or "the company)
ACQUISITION BY GROWTHPOINT OF THE WATERFALL MALL REGIONAL SHOPPING CENTRE IN
RUSTENBERG
1. INTRODUCTION
Investec Bank Limited ("Investec") is authorised to announce that
Growthpoint has entered into an agreement ("the Waterfall Mall acquisition
agreement") in terms of which Growthpoint will acquire the Waterfall Mall
Shopping Centre ("the Waterfall Mall"), a retail centre located in Rustenberg,
subject, inter alia, to the terms and conditions precedent as set out in
paragraph 4.2 below ("the Waterfall Mall acquisition"). In addition, Growthpoint
has acquired the land adjoining the Waterfall Mall ("the adjoining land")
subject, inter alia, to the terms and conditions precedent as set out in
paragraph 5.2 below
("the adjoining land acquisition"). The effective date of the Waterfall Mall
acquisition and the adjoining land acquisition ("the property acquisitions") is
1 April 2004 ("the effective date").
2. INFORMATION ON WATERFALL MALL CENTRE
The Waterfall Mall is a regional shopping centre in the upmarket suburb of
Cashan on the outskirts of Rustenburg comprising 39 885m2 of gross lettable area
and being Portion 1 of Erf 1174 Cashan Extension
12 measuring 15.8161 hectares.
The Waterfall Mall is anchored by Game (4 800m2), Pick "n Pay
(4 695m2), Woolworths (4 370m2) and Edgars (1 534m2), with leases expiring in
2008, 2013, 2013 and 2008 respectively. The Waterfall Mall opened its doors to
the public in June 1999 and national tenants represent approximately 65% in
terms of gross income.
With the significant expansion of the platinum mines in the area, Rustenburg
has become one of South Africa"s fastest growing regions.
3. STRATEGY AND RATIONALE
Pursuant to the merger between Growthpoint and Primegro Properties Limited,
Growthpoint has become the largest listed South African property company with
total assets exceeding R5,3 billion and a market capitalisation in excess of
R3,4 billion.
It is the intention of Growthpoint management to continue to grow the asset
base and market capitalisation of Growthpoint so as to ensure the inclusion of
Growthpoint in the FTSE/JSE Top-40 tradeable Index of the JSE Securities
Exchange South Africa ("JSE") on a sustainable basis. Furthermore, Growthpoint
will continue to offer investors exposure to a sectorally well balanced,
geographically diversified, high quality physical property portfolio and a
portfolio of listed property loan stock companies and property unit trusts.
The Waterfall Mall acquisition will increase Growthpoint"s total asset base
to around R5,6 billion whilst the quality of the Waterfall Mall will complement
the overall quality of Growthpoint"s retail portfolio and increase the total
gross lettable area of the retail portfolio to 709 478m2 or 49,8% of the total
gross lettable area of Growthpoint. By value, the retail portfolio will
comprise 65,6% of the total asset base of Growthpoint.
The long lease profile in relation to the large percentage of national
tenants in the Waterfall Mall should also enhance the overall sustainability of
the total Growthpoint income stream.
On the assumption that the property acquisitions will be financed using debt
facilities and that no new linked units will be issued, the overall loan to
value ratio of Growthpoint will increase to 40,8%.
4. TERMS OF THE WATERFALL MALL ACQUISITION
4.1 Introduction
Growthpoint has entered into the Waterfall Mall acquisition agreement in
terms of which it will acquire the Waterfall Mall from Rustenberg Shopping
Centre (Proprietary) Limited ("Rustenberg Centre") and Waterfall Mall Trust
(collectively, "the sellers") for a total purchase consideration of R284,6
million in cash, to be funded by Growthpoint from debt facilities.
4.2 Conditions precedent
The Waterfall Mall acquisition is subject to, inter alia, the following
conditions precedent being fulfilled:
4.2.1 all regulatory approvals, including, inter alia, the approval of the
Competition Authorities being obtained prior to the Waterfall Mall being
transferred into the name of Growthpoint; and
4.2.2 the disposal of the Waterfall Mall by the sellers being advertised in
terms of Section 34 of the Insolvency Act No 24 of
1936 ("the Insolvency Act").
5. TERMS OF THE LAND ACQUISITION
5.1 Introduction
Growthpoint has entered into an agreement to acquire the adjoining land
("the adjoining land agreement") from Gedeelte 5, Erf 1174, Cashan 12
(Proprietary) Limited ("Gedeelte 5") to be funded by Growthpoint from debt
facilities, for a purchase consideration of R10,0 million in cash
("the adjoining land acquisition consideration"), subject to paragraph 5.2 and
5.3 below.
5.2 Conditions precedent
The adjoining land acquisition is subject to the conditions precedent to
the Waterfall Mall acquisition, as set out in paragraph
4.2 above, being fulfilled, as well as the Waterfall Mall being transferred into
the name of Growthpoint by 31 May 2004, or such later date as Growthpoint and
Gedeelte 5 may agree.
In the event that the adjoining land agreement is not concluded and the
related conditions precedent are not fulfilled by 31 December 2003, the
adjoining land agreement shall lapse.
5.3 Payment and potential amendment to the land purchase consideration
The adjoining land acquisition consideration is to be paid by Growthpoint
to Gedeelte 5 upon transfer of the adjoining land into the name of Growthpoint.
Growthpoint undertakes to guarantee such payment prior to 31 December 2004 in
the event that transfer of the adjoining land into the name of Growthpoint has
not occurred by that date.
In terms of the adjoining land agreement, in the event that the sellers are
unable to procure that an additional 9 500m2 of retail rights are secured for
the Waterfall Mall so as to enable Growthpoint to undertake any extensions to
the Waterfall Mall, then the adjoining land acquisition consideration will be
reduced to R8,0 million.
6. FINANCIAL EFFECTS OF THE PROPERTY ACQUISITIONS
The property acquisitions are not expected to result in any material change
in earnings per Growthpoint linked unit, distribution per Growthpoint linked
unit or net asset value per Growthpoint linked unit in the short term. However
in the medium to long term, benefits are expected to materialise as a result of
the property acquisitions.
7. CIRCULAR TO GROWTHPOINT LINKED UNITHOLDERS
Given the monetary value of the property acquisitions, Growthpoint linked
unitholder approval is not required for the successful implementation of the
property acquisitions and, in terms of the Listings Requirements of the JSE, a
circular is not required to be posted to Growthpoint linked unitholders.
For and on behalf of the board
Growthpoint Properties Limited
Sandton
26 September 2003
Merchant bank
Investec Corporate Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Sponsor
Investec Bank Limited
(Registration number 1969/004763/06)
