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Growthpoint - Transfer Of Properties And Commencement Of Growthpoint"s
Commercial Mortgage Backed Securitisation ("CMBS") Programme
Growthpoint Properties Limited
(Incorporated in the Republic of South Africa)
Registration number 1987/004988/06
Share code: GRT ISIN: ZAE000037669
("Growthpoint")
TRANSFER OF PROPERTIES AND COMMENCEMENT OF GROWTHPOINT"S COMMERCIAL MORTGAGE
BACKED SECURITISATION ("CMBS") PROGRAMME
1. INTRODUCTION
Investec Bank Limited is authorised to announce that Growthpoint has concluded
an agreement to sell certain properties ("the Property Portfolio") to the
Growthpoint Securitisation Warehouse Trust (the "Trust") for an aggregate sale
consideration of R442,7 million ("the Sale Consideration") (the "Transaction")
in commencement of its CMBS programme.
The Property Portfolio comprises the properties acquired from the Lyons
Corporate Lease Fund as well as the properties known as Paddocks and Menlyn
Piazza, all recently acquired by Growthpoint. The effective date of the
disposal will be the date of transfer of the Property Portfolio, which is
expected to be before the end of October 2005 ("the Transfer Date").
2. TERMS OF THE TRANSACTION
2.1 Sale Consideration
The Sale Consideration will be settled as follows on the Transfer Date:
- R275 million by way of loan account in favour of Growthpoint between the
Trust and Growthpoint; and
- R167,7 million by way of a capital contribution by Growthpoint to the Trust.
2.2 Terms of the Trust
The Trust was registered for the sole purpose of holding properties in order
to facilitate the Transaction and Growthpoint"s CMBS programme. In terms of
the Trust deed, the objects of the Trust are limited to the conclusion of
agreements under the Transaction, compliance by the Trust with its obligations
thereunder, the management of the assets of the Trust for the benefit of
Growthpoint as beneficiary, the conduct of the business of a property owner
and the declaration of income and capital distributions to Growthpoint as sole
vested income and capital beneficiary.
Steinway Trustees (Proprietary) Limited (the "Trustees") are the independent
trustees of the Trust. The powers of the Trustees are limited by the
provisions of the Trust Deed.
Growthpoint shall provide strategic asset management and operational property
management services to the Trust. All of the rights of the Trust as property
owner and all decision-making powers in respect of the properties held by the
Trust are exercised by Growthpoint on behalf of the Trust.
2.3 Properties held by the Trust
The Trust currently owns 23 properties with a value of R842,6 million, which
were acquired by the Trust from Tresso Trading 119 (Proprietary) Limited
("Tresso") as Growthpoint"s nominee in terms of the agreement concluded
between Growthpoint and Tresso.
On the Transfer Date the Trust will own a property portfolio with a total cost
of R1 285,3 million.
2.4 Rationale and proposed benefits of the Transaction and Growthpoint"s CMBS
programme
The Transaction represents the next step towards Growthpoint achieving its
objectives with regard to a R5 billion CMBS programme and the initial issue by
Growthpoint Note Issuer Company (Proprietary) Limited (the "Issuer") of
approximately R805 million of bonds to be listed on the Bond Exchange South
Africa before the end of November 2005.
The proposed benefits of Growthpoint"s CMBS programme include:
- lower average cost of borrowings;
- diversification of borrowing sources;
- increased competitive advantage of Growthpoint to make value enhancing
acquisitions; and
- increased distributions to Growthpoint linked unit holders.
3. FINANCIAL EFFECTS
The Trust provides Growthpoint with "transparency" for tax purposes (as all
amounts accruing to the Trust are deemed to accrue to Growthpoint as the sole
vested income and capital beneficiary) while simultaneously ensuring the
properties held by the Trust are ring-fenced and shielded from any Growthpoint
insolvency. For accounting purposes, the assets of the Trust shall be
consolidated in Growthpoint"s balance sheet and from a financial perspective,
the Properties shall be treated as if they are held directly by Growthpoint.
Accordingly, the Transaction will not have an effect on the earnings per
Growthpoint linked unit, distribution per Growthpoint linked unit or net asset
value per Growthpoint linked unit.
For and on behalf of the board
Growthpoint Properties Limited
Sandton
10 October 2005
Merchant bank
Investec
Corporate Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Sponsor
Investec Bank Limited
(Registration number 1969/004763/06)
Arranger and Manager
Investec
Treasury & Specialist Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Attorneys to the Arranger and Issuer
WEBBER WENTZEL BOWENS
Attorneys to Growthpoint
JOWELL GLYN & MARAIS
Date: 11/10/2005 07:05:07 AM Produced by the JSE SENS Department
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