EQUITES PROPERTY FUND LIMITED - Acquisition of Tunney Ridge Business Park

Acquisition of Tunney Ridge Business Park

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”)


ACQUISITION OF TUNNEY RIDGE BUSINESS PARK



1.    INTRODUCTION

      Equites has concluded an agreement for the acquisition of the property letting enterprise conducted in respect of Erf 497
      Tunney Extension 15 Township Registration Division I.R., Gauteng and known as the Tunney Ridge Business Park
      (the “property”), from Tunney Ridge Proprietary Limited (the “seller”).


2.    RATIONALE FOR THE ACQUISITION

      2.1.     This acquisition is consistent with Equites’ growth and investment strategy of building a quality industrial
               portfolio that promotes capital growth and increasing income returns in the medium to long term for shareholders.

      2.2.     Three of the four industrial buildings on the property have long dated leases in places with quality tenants. Equites
               has obtained a three year rental guarantee in respect of the fourth building. The property will therefore add to the
               quality, defensiveness and income predictability of Equites.


3.    TERMS OF THE ACQUISITION

      3.1.     The purchase consideration payable in respect of the acquisition is R137 000 000 (exclusive of VAT at zero
               percent) to be settled on the effective date, against transfer of the property.

      3.2.     The effective date of the acquisition is 1 November 2015 or as soon as is possible and practicable thereafter,
               provided that the conditions precedent have been fulfilled and/or waived.

      3.3.     The agreement governing the acquisition provides for warranties and indemnities that are standard for
               acquisitions of this nature.


4.    DETAILS OF THE ACQUISITION

        Name of property and address                                     Tunney Ridge Business Park, Erf 497 Tunney
                                                                         Extension 15 Township Registration Division I.R.
        Region                                                           Gauteng
        Sector                                                           Industrial
        Rentable area (m2)                                               13 808
        Weighted average rental per m2                                   R67,59*
        Value attributable to the property                               R137 000 000
        Net operating income (November 2015 to October 2016)             R11 284 423,15
        Acquisition yield                                                8.24%

      *The weighted average rental includes income from offices and parking.


      No independent valuation has been carried out and the board of directors of Equites is of the view that the value attributed
      to the property above represents the value of the property acquired.

      The value of the net assets of the acquisition (including the property) is R137 000 000.


5.    CONDITIONS PRECEDENT

      The acquisition remains subject to the following conditions:

      5.1.     Equites obtaining any requisite regulatory consents pursuant to the conclusion of the acquisition on or before
               15 December 2015;
      5.2.     That by no later than 31 August 2015, Equites delivers a written notice to the seller confirming that:

               5.2.1.    it is satisfied with the results of the due diligence investigation conducted in respect of the property; and

               5.2.2.    the board of directors of Equites has approved the acquisition.


6.    CATEGORISATION OF THE ACQUISITION

      The acquisition is classified as a Category 2 transaction in terms of the JSE Listings Requirements. Accordingly it is not
      subject to approval by Equites shareholders.

19 August 2015


Corporate advisor and sponsor
Java Capital


Attorneys to Equites
DLA Cliffe Dekker Hofmeyr 
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