INVESTEC PROPERTY FUND LIMITED - Small Related Party Transaction

Small Related Party Transaction

INVESTEC PROPERTY FUND LIMITED
Approved as a REIT by the JSE
(Incorporated in the Republic of South Africa)
(Registration Number 2008/011366/06)
Share code: IPF     ISIN: ZAE000180915
(“Investec Property Fund” or “the Fund”)


SMALL RELATED PARTY TRANSACTION


1.   Introduction

     Investec Property Fund shareholders (“Shareholders”) are hereby advised that Investec Property Fund has
     entered into an agreement for the acquisition of a retail property located in Carletonville from Italite
     Investments Proprietary Limited, a wholly-owned subsidiary of Investec Property Limited (“Vendor”) for a
     purchase consideration of R23,700,000 (“the Acquisition”).

     The purchase consideration will be funded with debt and paid to the Vendor upon registration of transfer of the
     property into the name of the Fund.

     The Acquisition is unconditional with an effective date of 1 September 2014.

2.   Rationale for the Acquisition

     The property is a well-located asset offering a stable income stream increasing at market related escalations
     and is underpinned by a long dated lease and strong tenant covenant. The Acquisition is yield-enhancing to
     the Fund and contributes to the Fund’s underlying long-term lease expiry profile.

3.   Description of the property and tenant

     The property is tenanted by Edcon Holdings (trading as Edgars) on a 10-year triple-net lease with the lessee
     responsible for all operating costs and interior and exterior maintenance (including structure). It is a single-
     tenanted retail facility with 2,797m2 of retail trading area, 841m2 of storerooms and 317 m2 of yard.

     The property is being acquired at a forward yield of 9.38% and the independent valuation of the Acquisition
     supports this view.

4.   Specific information relating to the Acquisition

      Erf description:                         Portion 1, 2 and remainder of Erf 4660, Carletonville Extension 2

      Location:                                Corner of Flint, Halite and Gold Streets, Carletonville

      Sector:                                  Retail

      Rentable area:                           3,955 m²

      Single or multi-tenanted:                Single-tenanted
                                     2
      Weighted average rental per m :          R48.35

      Vacancy by rentable area:                0%

      Annual Escalations:                      7.25%

5.   Financial effects

     The Acquisition does not have a material effect on the Fund as the property will not contribute more than 3% to
     the pro forma earnings per share, pro forma headline earnings per share, pro forma distribution, pro forma net
     asset value per share or pro forma tangible net asset value per share of the Fund.

6.   Small related party transaction

     The Acquisition constitutes a small related party transaction in terms of the JSE Listings Requirements, as
     Investec Property Limited, a wholly-owned subsidiary of Investec Limited, holds 100% of the Vendor’s issued
     share capital and is the management company of the Fund.

     An independent valuation of the property has been performed by Mills Fitchet Magnus Penny (Pty) Limited
     (“Independent Valuer”), who is an independent registered valuer as defined in section 13 of the JSE Listings
     Requirements.

     Based on the value of the property arrived at by the Independent Valuer, the directors of the Fund are of the
     opinion that the terms and conditions of the Acquisition are fair to Shareholders.

     The JSE Limited has been provided with a summary of the sworn valuation of the property by the Independent
     Valuer. The full valuation report is available for inspection at the registered office of the Fund during normal
     business hours for a period of 28 days from the date of this announcement.



Sandton
16 September 2014

Investment Bank and Sponsor
Investec Bank Limited

Legal advisor
Fluxmans Inc.

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