EMIRA PROPERTY FUND - ACQUISITION AND PROPOSED DEVELOPMENT OF PROPERTIES
Emira Property Fund
A property fund created under the Emira Property Scheme, registered in terms of
the Collective Investment Schemes Control Act
JSE code: EMI
ISIN: ZAE000050712
(`Emira` or `the Fund`)
ACQUISITION AND PROPOSED DEVELOPMENT OF PROPERTIES
Introduction
Rand Merchant Bank (`RMB`) is authorised to announce that Emira has entered into
an agreement with To Measure Properties (Proprietary) Limited (`TMP`) in respect
of the acquisition of the following properties (`the acquisition`):
Remaining Extent of Portion 35 of the farm Hartebeestpoort 362; and
A portion of the Remaining Extent of Erf 506 Lynnwood Ridge Ext 12
(collectively `the properties`)
Furthermore, Emira has entered into an agreement with RMB Properties
(Proprietary) Limited (`RMB Properties`) whereby RMB Properties will develop the
properties for and on behalf of Emira (`the proposed development`).
(The acquisition and proposed development are collectively referred to hereafter
as the `transaction`)
Rationale for the transaction
It is Emira`s strategy to increase the size of its portfolio through the
acquisition of quality properties, which will contribute to net income growth at
yields that enhance the performance of the Fund.
In terms of the development agreement entered into with RMB Properties, Emira
will develop a convenience shopping centre on the properties, which are located
in a prime position in Lynnwood Ridge, Pretoria. The shopping centre, which
will be called `Gift Acres`, will derive a substantial portion of its income
from national tenants on long-term leases.
Emira`s Investment Committee has satisfied itself that `Gift Acres` is a high
quality retail development and that the transaction will be yield enhancing for
Emira. Furthermore, the transaction will increase Emira`s weighting in the
retail sector, in which it currently has a relatively low weighting.
Salient terms of the transaction
The total consideration payable by Emira in terms of the transaction is R76.8
million. The amount due to TMP and RMB Properties in terms of the transaction
will be funded through an existing debt facility, and Emira will not issue any
new PIs to fund the transaction.
The effective date of the acquisition is 7 September 2004. All conditions
precedent in respect of the acquisition have been fulfilled and the conveyancing
attorneys have been instructed to proceed with registration of the acquired
properties. The proposed development of the properties is expected to be
completed by 28 April 2005.
Financial effects of the transaction
Although the transaction will be yield enhancing for Emira, pro forma financial
effects have not been presented as the transactions will not have a significant
effect on Emira`s net asset value or tangible asset value per participatory
interest (`PI`), nor on its earnings or headline earnings per PI.
Related party transactions
In terms of the Listings Requirements of the JSE Securities Exchange South
Africa (`JSE`)the acquisition and proposed development are regarded as small
related party transactions as Emira, TMP and RMB Properties all form part of the
FirstRand Limited group. Accordingly, Emira has provided the JSE with written
confirmation from an independent professional expert that the terms of the
transaction are fair and reasonable to holders of Emira PIs. The fair and
reasonable statements will lie for inspection at the registered office of Emira,
6 Protea Place, Sandton for a period of 28 days from the date of this
announcement.
Sandton
27 September 2004
Merchant bank and sponsor Independent adviser
RAND MERCHANT BANK (A division KPMG Services (Proprietary)
of FirstRand Bank Limited) Limited
CORPORATE FINANCE
Date: 27/09/2004 02:21:39 PM Produced by the JSE SENS Department
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