ANNUITY PROPERTIES LTD - Proposed property acquisition and cautionary announcement

Proposed property acquisition and cautionary announcement

ANNUITY PROPERTIES LIMITED
(formerly Niqsha Beleggings CC)
(Incorporated in the Republic of South Africa)
(Registration Number 2011/145994/06)
Share code: ANP       ISIN: ZAE000165643
(“Annuity”)




PROPOSED PROPERTY ACQUISITION AND CAUTIONARY ANNOUNCEMENT




A.   CLEARWATER OFFICE PARK ACQUISITION

     Annuity is pleased to announce that it has agreed terms with The Leaf Property Fund Trust (“The Leaf
     Trust”) and Skyprops 92 Proprietary Limited (“Skyprops”) (collectively the “Vendors”) to acquire the
     Clearwater Office Park, together with all leases and assets forming necessary parts of the letting enterprise
     as a going concern (the “Clearwater Office Park Letting Enterprise”), situated at corner Christiaan de Wet
     and Millennium Roads, in Roodepooort, Johannesburg (the “Acquisition”). Detailed financial and property
     specific information will be published in due course.

     The Clearwater Office Park, a multi-tenanted A-grade office park comprising of 6 office buildings, is situated
     in a prime location within the Roodepoort business district, an established commercial and residential node.
     The property’s close proximity to amenities such as the Clearwater Mall, the Retail Crossing and the N1 and
     N14 highways place it in very desirable business location. The Clearwater Office Park Letting Enterprise
     boasts superb modern finishes and offers a high quality tenant profile which underpins the stability of the
     letting enterprise’s contractual cash flows and future rental growth. The letting enterprise’s highly defensive
     anchor tenants include Absa Group Limited, Standard Bank Group Limited, Nedbank Group Limited, PSG
     Group Limited and Mutual & Federal Insurance Company Limited.

     This Acquisition is consistent with Annuity’s strategy of acquiring high-quality properties that offer long-term
     distribution and capital growth underpinned by strong underlying cash flows and also presents an
     opportunity for Annuity to diversify the geographic spread of Annuity’s office portfolio.

B.   PURCHASE CONSIDERATION

     The purchase consideration for the Clearwater Office Park Letting Enterprise amounts to R258,525,631 and
     is payable through cash or issuance of Annuity linked units or a combination thereof. Accordingly Annuity
     will fund the purchase consideration utilising a combination of debt and/or the issue of new Annuity linked
     units.

C.   CONDITIONS PRECEDENT TO THE ACQUISITION

     The Acquisition is subject to the fulfilment of, inter alia, the following conditions precedent:

     a)    the conclusion of formal deeds of sale for the purchase of the Clearwater Office Park Letting
           Enterprise by Annuity;
     b)    the Vendors providing Annuity with a gross rental guarantee on all vacant space for a period of 12
           months commencing on the date of transfer of the Clearwater Office Park property into the name of
           Annuity;
     c)    the requisite majority of the Skyprops shareholders adopting a special resolution in terms of Sections
           112 and 115 of the Companies Act, No. 71 of 2008, as amended, approving the disposal of the
           Clearwater Office Park to Annuity;
      d)    the trustees of The Leaf Trust passing a resolution approving the disposal of the Clearwater Office
            Park to Annuity;
      e)    the completion of a due diligence review to the satisfaction of Annuity;
      f)    the board of directors of Annuity adopting an ordinary resolution approving the Acquisition following the
            completion of the abovementioned due diligence review;
      g)    Competition Authority approval in terms of the Competition Act 89 of 1998 and, to the extent
            necessary, the approval of the JSE Limited (“JSE”); and
      h)    the raising of the necessary debt and equity capital required to fund the Acquisition.

      The agreement shall lapse if any of the conditions precedent referred to above have not been fulfilled or
      waived on or before 31 July 2013, or such later date as Annuity and the Vendors may agree to in writing.

D.    CATEGORISATION OF THE ACQUISITION AND CAUTIONARY ANNOUNCEMENT

      The Acquisition constitutes a category 2 transaction in terms of the Listings Requirements of the JSE and
      accordingly does not require approval by Annuity linked unit holders.

      Linked unit holders are hereby advised to exercise caution when dealing in their linked units until a further
      announcement detailing financial effects and property specific information is made.

Illovo
25 February 2013



Lead Investment Bank and
Transaction Sponsor to Annuity                             Joint Investment Bank to Annuity

Investec Bank Limited                                      Sasfin Capital
                                                           (A division of Sasfin Bank Limited)
Sponsor to Annuity
Rand Merchant Bank
(A division of FirstRand Bank Limited)

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