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CPL - Capital - Disposal of a property Capital Property Fund Share Code: CPL ISIN: ZAE000001731 ("Capital") A portfolio in Capital Property Trust Scheme, a Collective Investment Scheme in Property established in terms of the Collective Investment Schemes Control Act, No 45 of 2002, managed by - Property Fund Managers Limited (Registration No. 1980/009531/06) ("PFM") DISPOSAL OF A PROPERTY INTRODUCTION Unitholders are advised that Capital has on 19 August 2010 concluded an agreement for the disposal of the property known as Grand Central comprising Erf 4648, 4649 and 4650 Cape Town, to Kitso Capital (Proprietary) Limited ("the purchaser") for R400 million ("the transaction"). EFFECTIVE DATE The effective date of the transaction will be the date of registration of transfer of the property into the name of the purchaser. The purchase price is payable in cash. The transaction agreement contains warranties normal for transactions of this nature. CONDITIONS PRECEDENT The transaction is conditional on the fulfilment of the following: - approval by the board of directors and investment committee of the purchaser; - the satisfactory outcome of a due diligence investigation to be conducted by the purchaser; - the purchaser procuring written confirmation from a financial institution reasonably acceptable to Capital that it has been granted loan funding for the transaction; - confirmation from Capital that tenants have waived all or any pre-emptive rights and/or options to acquire the property in terms of leases; - the unconditional approval of the Competition Authorities for the implementation of the transaction; and - the City of Cape Town consenting to the cession of Capital`s rights in terms of the City of Cape Town`s lease, to the purchaser. RATIONALE FOR THE TRANSACTION AND USE OF PROCEEDS The disposal of Grand Central is in line with Capital`s strategy of becoming a specialised commercial and industrial fund owning only A-grade properties. The cash proceeds will be used by Capital to reduce interest bearing borrowings. THE PROPERTY Details of the property including the valuation at 31 December 2009 attributed to the property by Peter Parfitt of Quadrant Properties (Proprietary) Limited, an independent professional associated valuer, are as follows: Property Region Sector Weighted Rentable Purchase Valuation description average area price rental per m2 (R) (m2) (R`000) (R`000) Erf 4648, 4649 Western Retail 95 33 616 159 000 358 000 and 4650, Cape Cape Town, in the City of Cape Town, Cape Division FINANCIAL INFORMATION The pro forma financial effects of the transaction on Capital`s financial results for the six months ended June 2010 ("the financial information") are set out below and have not been reviewed or reported on by the Fund`s auditors. The pro forma financial effects have been prepared for illustrative purposes only, to provide information on how the transaction may impact the financial information. Due to their nature, the pro forma financial effects may not fairly present Capital`s financial position, changes in equity, and results of operations or cash flows after the transaction. The pro forma financial effects are the responsibility of the directors of PFM. The pro forma effect of the transaction on the financial information of Capital for the six months ended June 2010 is as follows: Unadjusted Pro forma % Change before the after the transaction transaction
(cents) (cents) Earnings per unit 30,58 36,41 19,1% Weighted average number of units in 717 578 059 717 578 059 issue Notes and assumptions: - The amounts set out in the "Unadjusted before the transaction" column have been extracted without adjustment from the financial information. - The financial information and the pro forma financial effects thereon have been prepared in compliance with International Financial Reporting Standards. - The transaction is assumed for the purposes of earnings per unit to have been implemented on 1 January 2010. - The disposal was at the fair value of the asset disposed of. - The historical rental income and related property expenditure was extracted from the financial information. - The cash proceeds of R400 million have been utilised to reduce interest bearing borrowings at an effective interest rate of 9,5%. - The pro forma financial effects of the transaction on the net asset value, tangible net asset value, headline earnings and distribution per unit are not significant. For the six months to 30 June 2010, the net rental income attributable to Grand Central was 19,2 million. CATEGORISATION OF THE TRANSACTION The transaction is a category 2 transaction in terms of section 9.5(a) of the Listings Requirements of the JSE Limited. 19 August 2010 Sponsor Java Capital Date: 19/08/2010 17:05:02 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
