Resilient Property Income Fund Limited - Acquisiti
RES
RES
Resilient Property Income Fund Limited - Acquisition Of Highveld Mall, Witbank
Resilient Property Income Fund Limited
(Incorporated in the Republic of South Africa)
Registration number 2002/016851/06
Share code: RES ISIN: ZAE000043642
("Resilient" or "the Company")
ACQUISITION OF HIGHVELD MALL, WITBANK
Introduction
Linked unitholders are advised that Resilient has entered into an agreement to
acquire Highveld Mall, a retail centre in Witbank, for R270m. The centre is
currently under construction and is due for completion in April 2007.
Details and rationale for the acquisition
Upon successful completion of the centre, Resilient will own 60% of this 40 000
m2 retail centre. Resilient purchased the land at a cost of R11.4m. The
development agreement provides Resilient with a guaranteed yield of 10%.
Resilient is therefore not exposed to any development risk. The centre will be
anchored by Edgars, Woolworths and Pick `n Pay. The acquisition is consistent
with Resilient"s strategy of investing in dominant retail in outlying areas.
The land purchase agreement is for a 60% undivided share of Erven 1715 & 1716
Del Judor Extension 27 Township, Province of Mpumalanga and was entered into
with Emalahleni Local Municipal Council on 8 December 2005. The development
agreement is with RMS Assets (Pty) Ltd and Falcon Forest Trading 89 (Pty) Ltd
and was entered into on 5 December 2005. Resilient"s directors are of the
opinion that the purchase price represents the fair value of the development.
No independent valuation was performed by a professional valuer.
Consideration and financial effects
The net cash consideration will be funded from existing cash resources and
additional borrowing facilities and is payable based on progress certificates.
The acquisition has no significant effect on Resilient"s net asset value per
linked unit and tangible net asset value per linked unit as at 30 June 2005, and
financial effects have therefore not been included. The forecast revenue for the
8 months ending 31 December 2007 amounts to R20m. The forecast net profit before
tax and forecast net profit for the 8 months ending 31 December 2007 amounts to
R2m. These forecast figures have not been reviewed by Resilient"s auditors and
are based on a 10% first year net yield and funding cost of 9%.
Categorisation of the transaction
The acquisition has been categorized as a category 3 transaction in terms of
section 9.5(a) of the JSE Listings Requirements.
Johannesburg
10 January 2006
Investment Bank and Sponsor
Nedbank Capital
Date: 10/01/2006 11:34:54 AM Produced by the JSE SENS Department
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