LODESTONE REIT LIMITED - Acquisition of the Yarona Shopping Centre

Acquisition of the Yarona Shopping Centre

Lodestone REIT Limited
(previously Lodestone Properties Limited)
(Incorporated in the Republic of South Africa)
Registration number: 2010/017830/06
JSE share code: LDO  ISIN: ZAE000197935
(“Lodestone” or “the company”)
(Approved as a REIT by the JSE)


ACQUISITION OF THE YARONA SHOPPING CENTRE


1.   Introduction

     Shareholders are advised that Lodestone Investments Proprietary Limited, being a wholly owned subsidiary of
     the company, has, subject to certain conditions precedent, concluded an agreement (“the purchase agreement”)
     for the acquisition of the property letting enterprise conducted in respect of the Yarona Shopping Centre (the
     “property”), situated at Flag Fish Street, Kaalfontein, Gauteng from Delta Property Fund Limited (the “seller”)
     for an aggregate purchase consideration of R80 000 000 (exclusive of VAT) (the “acquisition”).

2.   Rationale

     The acquisition is in line with Lodestone’s strategy to acquire yield enhancing assets to grow its portfolio with
     long term, sustainable cash flows.

3.   Property specific information

     The property consists of Erf 3115 Kaalfontein Extension 6. Additional property specific information required in
     terms of the JSE Listings Requirements is set out in the table below.

                                                                                                       Estimated
                                                                                                      net income
                                                                        Weighted                     1 November
                                                                         average                          2015 to
                                                               Land        rental        Purchase     31 October
      Property name        Geographical               GLA        size     per m2     consideration          2016
      and address          location        Sector     (m2)      (m2)      (R/m2)               (R)            (R)
      Yarona Shopping
      Centre
      Erf 3115
      Kaalfontein
                           Gauteng         Retail     5 979   14 746       117.06      80 000 000      7 256 020
      Extension 6
      Township,
      Registration
      Division I.R

4.   Terms of the acquisition

     4.1    The effective date of the acquisition is the date of the fulfilment or waiver, as the case may be, of the last
            condition precedent.

     4.2    The purchase consideration in respect of the acquisition will be settled in cash against transfer of the
            property to Lodestone Investments Proprietary Limited.

     4.3    In the event that the transfer is delayed beyond 30 January 2016, the purchase consideration will increase
            by 9.5% per annum, compounded monthly, from 1 February 2016 until the transfer date.

     4.4    The purchase agreement provides for warranties and indemnities that are normal for an acquisition of this
            nature.

     4.5    The seller needs to obtain noteholder consent to release the property.
5.   Conditions precedent

     The acquisition remains subject to the fulfilment or waiver, as the case may be, of the following conditions:

     5.1       Lodestone delivering to the seller a written notice confirming that it is satisfied with the results of the due
               diligence investigation by no later than 16 October 2015;

     5.2       Lodestone obtaining the requisite internal approvals by no later than 30 October 2015;

     5.3       the seller obtaining the requisite internal approvals by no later than 30 October 2015; and

     5.4       Lodestone delivering an irrevocable bank guarantee, in respect of the purchase consideration, to the
               seller’s attorney by no later than 18 November 2015.

6.   Valuation

     The board of directors of Lodestone is satisfied that the aggregate value attributed to the property is in line with
     the aggregate purchase consideration being paid by Lodestone. The directors of the company are not independent
     and are not registered as professional valuers or as professional associate valuers in terms of the Property Valuers
     Profession Act, No 47 of 2000.

7.   Categorisation

     The acquisition is a category 2 transaction in terms of the JSE Listings Requirements and accordingly does not
     require approval by Lodestone shareholders.

22 September 2015


Sponsor
Java Capital

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