| Fri 17 Nov 2006, 16:03 | | SA Retail - Acquisition Of The Sharemax Portfolio |
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SRL
SRL
SA Retail - Acquisition Of The Sharemax Portfolio - Detailed Cautionary
Announcement
S A RETAIL PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1999/025764/06)
(JSE Code: SRL & ISIN Code: ZAE000034328)
("SA Retail" or "the Company")
ACQUISITION OF THE SHAREMAX PORTFOLIO - DETAILED CAUTIONARY ANNOUNCEMENT
1. Introduction
Linked unitholders are referred to the cautionary announcement dated
11 July 2006 and subsequent cautionary announcements regarding the
agreements entered into with Sharemax Investments (Proprietary)
Limited ("Sharemax"), acting as administrator for 14 property owning
companies ("the Vendors"), in terms of which SA Retail had agreed to
acquire 14 properties from the Vendors ("the properties").
Following the completion of SA Retail"s due diligence on the
properties, SA Retail will proceed with the acquisition of 10 of the
properties ("the portfolio") for an aggregate consideration of R995
845 291("the consideration"), subject to the conditions precedent set
out below ("the acquisition").
The effective date of the acquisition will be the first of the month
following the fulfilment of the last suspensive condition, which is
expected to be 1 March 2007.
2. Details of the portfolio
The portfolio consists of ten properties with a gross lettable area
("GLA") of 115 834 m2, and an expected forward yield of 8,8%. The GLA
of the portfolio is comprised 98% of retail space and the remaining 2%
of offices. By GLA, 76% of the portfolio is situated in Gauteng with
the 16% and 8% situated in the Cape and Kwa-Zulu Natal respectively.
The portfolio vacancy as at the valuation date was estimated to be 4
366 m2 or 3,8% of the GLA. Anchor and national tenants occupy 54% of
the GLA of the portfolio.
The salient features of the respective properties are as follows:
Property Location GLA Vacany Price
(% of R"000
GLA)
Northpark Pretoria North 30 048 4% 202 278
Mall
Comaro Oakdene, 17 039 6% 181 257
Crossing Johannesburg
Montana Montana, Pretoria 20 330 0% 167 300
Crossing
Davenport Bulwer, Durban 9 394 6% 111 900
Square
St George"s George 11 268 0% 89 623
Square
Midway Mews Halfway Gardens, 8 244 7% 75 000
Midrand
Atterbury Faerie Glen, 5 985 0% 68 559
Decor Pretoria
Van Bellville, Cape 5 038 3% 43 600
Riebeeckshof Town
Clubview Centurion 5 775 12% 33 811
corner
Omniplace Bellville, Cape 2 713 7% 22 600
Town
115 834 995 845
SA Retail is in discussion with Sharemax with regard to the purchase
consideration of one of the properties, which may result in an
amendment to the purchase consideration. Linked unitholders will be
advised of any amendments that may occur.
3. Rationale for the acquisition
SA Retail seeks to invest in a focused portfolio of retail properties,
which cater for the needs of stable communities, are anchored by
established retailers and which offer sustainable rental growth and
steady capital appreciation. In addition to neighbourhood centres, SA
Retail will invest in flagship regional centres.
The acquisition will increase SA Retail"s property asset base from
R2,2 billion to in excess of R3,1 billion, at an incremental cost of
R8 597/m2.
The acquisition will continue to improve the overall quality of SA
Retail"s property portfolio whilst diversifying the overall risk
within the portfolio, without significantly changing the sectoral or
regional composition of the portfolio.
SA Retail is confident that with a focussed leasing strategy the
vacancy level within the portfolio can be reduced. Furthermore, with
aggressive utility recoveries and selected refurbishment and
redevelopment implementation, the portfolio will yield favourable
earnings growth prospects going forward.
4. Consideration for the acquisition
The consideration for the acquisition of the portfolio will be settled
by way of an issue of new SA Retail linked units in terms of a vendor
placement, at a price still to be finalised.
The portfolio has been valued by CB Richard Ellis (Pty) Ltd, an
independent valuer, at R998 000 000 as at 1 December 2006.
5. Conditions
The implementation of the acquisition is conditional upon:
* the approval of the circular relating to the acquisition by the
JSE Limited ("the JSE")
* the approval of the acquisition by the requisite majority of SA
Retail linked unitholders in general meeting;
* the granting of approval as required from the competition
authorities
* the necessary approval of the Securities Regulation Panel so far
as is required by the vendors; and
* the necessary approval of the shareholders of each of the
vendors.
6. Financial information and renewal of cautionary announcement
A further announcement will be made in due course providing the
financial effects of the acquisition on SA Retail. Accordingly,
linked unitholders are advised to continue exercising caution when
dealing in the linked units of S A Retail until such announcement is
made.
7. Documentation
The acquisition has been classified as a Category 1 transaction in
terms of the Listings Requirements of the JSE. Accordingly the
Company will in due course post a circular to linked unitholders
incorporating revised listing particulars and a notice convening a
general meeting.
Johannesburg
17 November 2006
Corporate Adviser Sponsor
Grindrod Bank Ltd Exchange Sponsors (Pty) Ltd
Date: 17/11/2006 04:04:01 PM Produced by the JSE SENS Department
