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Growthpoint - Acquisition Of The Paddocks Shopping Centre, Milnerton, Cape Town
(`The Paddocks`) And Cautionary Announcement
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 OF THE PADDOCKS SHOPPING CENTRE, MILNERTON, CAPE TOWN
(`THE PADDOCKS`) AND CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Investec Bank Limited is authorised to announce that Growthpoint has concluded
an agreement with Investec Property Group Limited (`IPG`), in terms of which
Growthpoint will acquire The Paddocks for a total purchase consideration of
R88.4 million (`the acquisition`).
The effective date of the acquisition will be the date of transfer of The
Paddocks which is expected to be the end of December 2004 (`the transfer date`).
2. TERMS OF THE ACQUISITION
2.1 Acquisition consideration
Growthpoint has acquired The Paddocks for an acquisition consideration of
R88.4 million, which will be settled in cash utilising Growthpoint`s existing
debt facilities.
2.2 The Paddocks
The Paddocks comprises a neighborhood convenience retail shopping centre
with a gross lettable area of 8 365m2, and is situated on Erf 33090 (portion of
Erf 32705) in the new Milnerton residential development in Cape Town, nearby the
upmarket Sunset Beach residential area.
The Paddocks is tenanted by amongst others Spar with a 10-year lease,
Standard Bank with a 5-year lease, Osiers with a 5-year lease, and several well
known restaurants.
2.3 Rationale for the acquisition
Growthpoint management continues to seek acquisition opportunities which
will enhance the quality of the Growthpoint physical property portfolio as well
as the quality, long-term sustainability and growth of the income stream
available to Growthpoint linked unitholders.
Growthpoint also seeks to offer its investors exposure to a sectorally well-
balanced, geographically diversified, quality physical property portfolio and
the directors are of the opinion that The Paddocks fits the above investment
criteria whilst improving Growthpoint`s exposure to the buoyant retail property
market in the Western Cape.
The estimated initial annual forward yield on the acquisition is 11% from
the transfer date.
3. FINANCIAL EFFECTS
The acquisition will not have a material effect on the earnings per
Growthpoint linked unit, distribution per Growthpoint linked unit or net asset
value per Growthpoint linked unit.
4. RELATED PARTY TRANSACTION
In terms of Section 10.7 of the Listings Requirements of the JSE Securities
Exchange South Africa (`JSE`) the transaction is regarded as a small related
party transaction as IPG are the managers of Growthpoint and are responsible for
the asset management and property administration of the Growthpoint asset
portfolio. Accordingly, Growthpoint has provided the JSE with written
confirmation (`the fair and reasonable opinion`) from an independent
professional expert that the terms of the acquisition are fair and reasonable to
Growthpoint linked unitholders. The fair and reasonable opinion will lie open
for inspection at the registered office of Growthpoint, Ground Floor, Investec
Building, 100 Grayston Drive, Sandton for a period of 28 days from the date of
publication of this announcement.
5. CAUTIONARY ANNOUNCEMENT
Growthpoint linked unitholders are referred to the cautionary announcement
published on SENS on 11 November 2004, and are advised that negotiations are
still in progress which, if successfully concluded, may have a material effect
on the price at which the company`s linked units trade on the JSE. Growthpoint
linked unitholders are accordingly advised to exercise caution in dealing in
their Growthpoint linked units until a further announcement is made.
Sandton
1 December 2004
Merchant bank
Investec Corporate Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Sponsor
Investec Bank Limited
(Registration number 1969/004763/06)
Independent advisor
Ernst & Young Corporate Finance (Pty) Ltd
(Registration number 2000/031575/07)
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