EQUITES PROPERTY FUND LIMITED - Voluntary announcement regarding the conclusion of development lease with Premier

Voluntary announcement regarding the conclusion of development lease with Premier

EQUITES PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2013/080877/06)
JSE share code: EQU  ISIN: ZAE000188843
(Approved as a REIT by the JSE)
(“Equites” or “the company”)


VOLUNTARY ANNOUNCEMENT REGARDING THE CONCLUSION OF DEVELOPMENT LEASE WITH PREMIER


1.   INTRODUCTION

     Equites has concluded a development lease with Premier FMCG Proprietary Limited (“Premier”), in terms 
     of which Equites will be developing a 15 155 square metre modern logistics facility and offices for Premier 
     (“the development” or “the development lease”). The anticipated total capital value of the development, including 
     land, will be R165 million. The development will be situated on 3.9 hectares of vacant land already owned by Equites 
     in Lords View Industrial Park in Gauteng and will cater for Premier's continued growth by allowing for an expansion 
     of 2 484 square metres.

     Premier provides innovative, branded and private label solutions in partnership with their customers and consumers in 
     the fast moving goods sector (FMCG) via defined routes to market. It has an annual turnover of more than R 9 billion and
     employs more than 7 000 people in the various operations.

     Brait S.E., an investment holding company with a primary listing on the Euro MTF Market of the Luxembourg Stock
     Exchange and a secondary listing on the JSE, is the major shareholder of Premier and currently owns 92,2% of the issued
     share capital of Premier.

     Lords View Industrial Park was planned as an environmentally friendly, eco-sensitive industrial logistics park and makes
     use of the latest developments in green township development. Several sustainability and energy efficiency measures will
     be included in the development of the new Premier facility.

2.   RATIONALE FOR THE DEVELOPMENT

     2.1 The conclusion of the development lease is consistent with Equites’ strategy of developing new distribution centres for
          quality A-grade tenants on long-term leases in proven logistics nodes, the effect of which is to further enhance the
          property fundamentals of the company.

     2.2 The development will add to the quality, defensiveness and income predictability of Equites.


3.   TERMS OF THE DEVELOPMENT LEASE

     3.1 The development lease between Equites and Premier is a triple net, fully repairing and recovering lease and has a
         duration of 12 years, with the lease commencing on 18 May 2018 and terminating on 17 May 2030.

     3.2 The monthly rentals will escalate annually at 8% and the development will therefore contribute positively to the
         Equites’ distribution growth prospects over the duration of the lease.


4    FUNDING AND FINANCIAL EFFECTS

     The development will be funded by Equites through its existing approved bank debt facilities. The development yield of
     9.5% exceeds Equites’ marginal cost of debt and will be yield accretive from the commencement of the lease. This forecast
     financial information has not been audited or reviewed by Equites’ auditors.

27 June 2017


Sponsor
Java Capital

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