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Paraprop - Acquistion and Disposal of Properties and Withdrawal Of Cautionary
PARAMOUNT PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1945/019928/06)
Share code: PRA
ISIN: ZAE000028577
("Paraprop")
ANNOUNCEMENT REGARDING THE ACQUISTION AND DISPOSAL OF PROPERTIES, REVISED NET
ASSET VALUE PER LINKED UNIT AS AT 30 APRIL 2005 AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
1. Introduction
Linked unit holders are advised that Paraprop has entered into 11 agreements
("the agreements") to acquire the properties listed in the table below ("the
acquisitions").
Property(1 ) Vendor Agreement Effective date and
date transfer date
1. Lighthouse Mall Anvor Ltd 15 September The last day of the
(2) and David 2005 month of fulfilment
Manfred of the Suspensive
Gorfil Conditions
2. The Avalon Avalon 12 September 1 December 2005
Building Building 2005
(Pty) Ltd
3. Middestad Mall Liberty 21 September 1 November 2005, or
Group Ltd 2005 so soon as possible
thereafter
4. DCD Dorbyl Southern 27 September 1 December 2005, or
Newcastle Spirit 2005 as reasonably
Properties possible thereafter
79 (Pty)
Ltd
5. DCD Dorbyl Southern 27 September 1 December 2005, or
Duncanville Spirit 2005 as reasonably
Properties possible thereafter
79 (Pty)
Ltd
6. DCD Dorbyl Southern 27 September 1 December 2005, or
Boksburg Spirit 2005 as reasonably
Properties possible thereafter
79 (Pty)
Ltd
7. Midas Building, Blue Dot 5 October The date that is as
Meadowdale Properties 2005 close as reasonably
56 (Pty) possible to the
Ltd fulfilment of all
the Suspensive
Conditions
8. The Terraces, 30 Tarantula 6 October 1 December 2005
Waterkant and 33 Property 2005
on Bree Investments
(Pty) Ltd
9. 75% share in the Samuel Benn 3 October 1 November 2005 (or
Shoprite Property & Co (Pty) 2005 as soon as possible
adjoining the Ltd thereafter)
Golden Acre
Centre and a 75%
share in the
Golden Acre
Office Tower
10. Northcliff Square Northcliff 22 March The date that is the
Shopping Centre Square 2005 later of the date of
Properties fulfilment of all
(Pty) Ltd the Suspensive
Conditions and the
delivery of the
guarantees required
in terms of the
payment of the
purchase price
11. MTN Call Centre Sipan 1 12 October 1 December 2005
(Pty) Ltd 2005
Notes:
Collectively, "the properties".
The properties have all been acquired as going concerns save for the Lighthouse
Mall where all shares in and claims against Lighthouse Mall (Pty) Ltd have been
acquired
Further to the above, Paraprop has entered into an agreement with Samuel Benn &
Co dated 3 October 2005, which will be effective on 1 November 2005 (or as soon
as possible thereafter), to dispose of 25% in the retail portion of the Golden
Acre Centre ("the disposal") for a consideration of R40 750 000.
2. Rationale for the acquisitions
The rationale for the acquisitions is to grow the fund both in terms of market
capitalisation and assets, thereby diversifying the exposure to any one sector
or region.
3. Consideration for the acquisition
The consideration for the acquisitions is as follows:
Property Value Total Cash Value to Number of
attributed(1 consideration portion(2 be consideration
) ) settled linked units
through to be
the issued(3)
issue of
new
Paraprop
linked
units
R"000 R"000 R"000 R"000
Lighthouse 88 000 87 500 43 750 43 750 7 941 000
Mall
The Avalon 25 600 26 200 13 100 13 100 2 386 200
Building
Middestad 100 000 100 000 50 000 50 000 9 026 000
Mall
DCD Dorbyl 59 900 60 650 30 325 30 325 5 464 600
Portfolio
Midas 107 500 110 000 55 000 55 000 9 892 100
Building,
Meadowdale
The 240 000 244 000 122 000 122 000 21 982 000
Terraces,
30
Waterkant
and 33 on
Bree
Shoprite 105 000 101 250 71 000 30 250 5 622 676
Property
and the
Golden
Acre
Office
Tower
Northcliff 38 000 37 904 19 904 18 000 3 243 300
Shopping
Centre
MTN 70 000 72 000 36 000 36 000 6 315 800(4)
Total 834 000 839 504 441 079 398 425 71 873 676
Notes:
1. The value attributed by an independent, registered valuer, Mills Fitchet
Magnus Penny (Pty) Ltd, as at 1 November 2005.
2. To be funded through debt.
3. Paraprop has, where required, placed these linked units ("the placing
linked units") on behalf of vendors at a discount of up to 7.5% to the 30-
traded day volume weighted average price (VWAP) of Paraprop immediately
preceding the date of the agreement, with the exception of the MTN
transaction where the units will be issued at a 5% discount to the 30-
traded day VWAP immediately preceding the date of transfer. The placing
linked units will be issued as soon as practicable after the transfer of
the properties.
Based on current VWAP estimates.
4. Revised net asset value per linked unit as at 30 April 2005
4.1 Linked unitholders are referred to Paraprop"s interim results for the six
months ended 30 April 2005 published on 17 June 2005. The incorrect number
of linked units were used in calculating the net asset value ("NAV") at 30
April 2005. The correct NAV is set out below:
Per Paraprop Interim Revised interim Percentage change
ordinary results for results for the %
linked unit the six six months ended
(cents) months ended 30 April 2005
30 April
2005
published on
17 June 2005
NAV (cents) 441 423 4.0
4.2 Financial effects and forecast financial income regarding the acquisitions
Based on the published consolidated results for the 6 months ended 30 April
2005, the unaudited pro forma financial effects of the acquisitions on
Paraprop"s net asset value per linked unit ("NAV"), where material, are set
out below. This unaudited pro forma financial information has been prepared
for illustrative purposes only and because of its nature may not give a
true picture of Paraprop"s financial position, nor the effect and impact of
the acquisitions on Paraprop going forward, and is the responsibility of
Paraprop"s directors.
The forecast financial information regarding the acquisitions for the 12
months ending 31 October 2006 is also set out below. The forecast financial
information for the 1 month ending 31 October 2005 has not been provided as
all the effective dates of the acquisitions are after 31 October 2005. The
forecast financial information has not been reviewed or reported on by the
accountant in terms of Section 8 of the JSE Limited Listings Requirements
("Listings Requirements").
Property Description Before After % Change Forecast Uncontracte
the the for the d revenue
acquis- acqui- year as a % of
itions(1) sitions ending the total
(2) % 31 revenue
October
2006(3) %
R"000
Lighthous Revenue - - - 8 090 0.0
e Mall ("000)
Operational - - - 7 089
net income
("000)
The Revenue - - - 2 672 0.0
Avalon ("000)
Building
Operational - - - 2 015
net income
("000)
Middestad Revenue - - - 14 439 1.9
Mall ("000)
Operational - - - 9 979
net income
("000)
DCD Revenue - - - 1 214 0.0
Dorbyl ("000)
Portfolio
Operational - - - 1 196
net income
("000)
Midas Revenue - - - 10 306 0.0
Building, ("000)
Meadowdal
e
Operational - - - 10 048
net income
("000)
The NAV (cents) 423 445 5.2 -
Terraces,
30
Waterkant
and 33 on
Bree
Linked 114 592 136 574 19.2 -
units in 029 029
issue
("000)
Revenue - - - 24 488 0.0
("000)
Operational - - - 19 861
net income
("000)
Shoprite Revenue - - - 18 655 34.6
Property ("000)
and the
Golden
Acre
Office
Tower
Operational - - - 10 673
net income
("000)
Northclif Revenue - - - 4 397 0.0
f ("000)
Shopping
Centre
Operational - - - 3 927
net income
("000)
MTN Revenue - - - 7 567 0.0
("000)
Operational - - - 7 454
net income
("000)
Notes:
1. Based on the published consolidated unaudited results of Paraprop for the 6
months ended 30 April 2005.
2. Based on the assumption that the acquisitions took place on 30 April 2005.
The forecast profit after tax for the periods under review has not been
disclosed as this is determined after distributions. As the distributions
are variable, it is not possible to determine, at this point in time, what
the distributions will be for the forecast periods under review.
3. The effect of the acquisitions on Paraprop"s net tangible asset value,
where material, has not been disclosed as no intangible assets were
reflected on Paraprop"s balance sheet at 30 April 2005.
4. The financial effects of the disposal on Paraprop"s earnings, headline
earnings and NAV per linked unit have not been disclosed as these are not
material.
5. Suspensive conditions of the acquisitions
The agreements are subject to inter alia:
- Competition Authority approval;
- Due diligence investigations where appropriate;
- funding approval; and
- Paraprop linked unit holder approval to the extent required.
6. Property details
Details regarding the properties are set out below:
Property Location Sector Gross Single or Weighted Vacancy
lettable multi average by
area m2 tenanted rental rentable
per m2 area m2
R
Lighthouse Kwa-Zulu Retail/Of 7 873 Multi 80 Nil
Mall, Natal fices tenanted
Umhlanga
The Avalon Western Offices 4 566 Multi 47 Nil
Building, Cape tenanted
Cape Town
Middestad Western Retail/Of 20 930 Multi 56 397
Mall, Cape fices tenanted
Bellville
DCD Dorbyl Gauteng/ Industria 94 521 Single 18 (1) Nil
Portfolio Kwa-Zulu l tenanted
Natal
Midas Gauteng Offices/ 18 981 Single 18 (1) Nil
Building, Warehouse tenanted
Meadowdale
The Western Retail/Of 24 045 Multi 64 Nil
Terraces, 30 Cape fices tenanted
Waterkant
and 33 on
Bree, Cape
Town
Shoprite Western Retail/Of 44 356 Multi 45 15 367
Property and Cape fices tenanted
the Golden
Acre Office
Tower, Cape
Town
Northcliff Gauteng Retail 5 283 Multi 59 Nil
Shopping tenanted
Centre,
Northcliff
MTN, Mount Kwa-Zulu Offices 7 013 Single 18 (1) Nil
Edcombe Natal tenanted
Notes:
1. Based on the weighted average rental per square metre for the total
rentable area for all the single tenant buildings.
7. Categorisation of the acquisitions and the disposal
Save for the acquisition of the Avalon Building and The Terraces, 30
Waterkant and 33 on Bree, each of the property acquisitions and the
disposal has been categorised as a Category 3 transaction in terms of
section 9.5(a) of the Listings Requirements.
The categorisation of the Avalon Building acquisition is below that of a
Category 3 transaction while the acquisition of The Terraces, 30 Waterkant
and 33 on Bree is a Category 1 transaction in terms of the Listings
Requirements. A circular containing full details of The Terraces, 30
Waterkant and 33 on Bree acquisition will be despatched to Paraprop linked
unit holders in due course ("the circular"). The circular will also include
a notice convening a general meeting of Paraprop linked unit holders to
consider, and if deemed appropriate, pass the resolutions necessary to
approve the acquisition of The Terraces, 30 Waterkant and 33 on Bree.
8. Withdrawal of cautionary announcement
Linked unit holders are referred to the cautionary announcement dated 22
September 2005. Further to the announcement above, linked unit holders are
advised that they no longer need to exercise caution when dealing in
Paraprop linked units.
Cape Town
20 October 2005
Investment bank Attorneys Fund managers Property
and sponsor managers
Nedbank Cliffe Dekker Paraprop Asset Spire Property
Corporate Inc. Managers Services
(Proprietary) (Proprietary)
Limited Limited
Date: 20/10/2005 03:29:38 PM Produced by the JSE SENS Department
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