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Acquisition by VPIF of a building in Rivonia
VUNANI PROPERTY INVESTMENT FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2005/019302/06)
JSE code: VPF
ISIN: ZAE000157459
(“VPIF” or “the company”)
ACQUISITION BY VPIF OF A BUILDING IN RIVONIA
1. INTRODUCTION
Unitholders are advised that VPIF has entered into a Sale of
Enterprise Agreement with Money Box Investments 84 Proprietary
Limited (“the vendor”), in terms of which VPIF will acquire the
rental enterprise conducted as a going concern on Erf 155,
Edenburg, Gauteng, (“the property” and “the transaction”) known
as The Business Centre.
The agreement contains warranties normal for an acquisition of
this nature.
2. INFORMATION RELATING TO THE PROPERTY
Description of the Erf 155 Edenburg.
property:
Location: 377 Rivonia Boulevard, Sandton, Gauteng
GLA: 4 893 square metres and 164 parking days,
which constitutes 100% offices
Lease The vendor has signed a 10 year ‘triple
net lease (fully repairing maintaining
insuring) for 10 years, escalating at
7.5% per annum.
Weighted average R86.00 per square metre (triple net
rental per square lease)
metre:
Purchase price and The purchase price of the property is set
other costs: out in paragraph 4 below. The following
other expenditure will be incurred in
respect of the property:
Agent’s commission is payable by the
vendor.
All costs incidental to the transfer of
the property – approximately R124 460.
Independent No independent valuation has been carried
valuation: out and the board of VPIF is of the view
that the purchase price of R 64 500 000
represents the fair value of the
immovable property as at the effective
date.
3. RATIONALE FOR THE TRANSACTION
VPIF was listed on the JSE Limited (“JSE”) on 11 August 2011.
The main purpose of the listing was to provide VPIF with a
platform for acquisitive growth and this transaction is a step
towards VPIF’s stated intention to grow the portfolio by the
acquisition of high quality yield-enhancing properties. The
Business Centre will give an initial yield of 9.63%.
4. PURCHASE CONSIDERATION
A cash purchase price of R64 500 000, which will be funded by
debt, is payable by VPIF to the vendor, which amount includes
VAT levied at the rate of 0% in terms of section 11(1)(e) of the
VAT Act.
5. EFFECTIVE DATE
The effective date of the transaction will be the date of
registration of transfer of ownership of the property.
6. CONDITIONS PRECEDENT
The transaction is unconditional and is subject to transfer of
the property.
7. PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTION
The pro forma financial effects of the transaction on net asset
value and net tangible asset value per linked unit are not
significant and have therefore not been disclosed.
8. FORECAST INFORMATION RELATING TO THE TRANSACTION
The forecast financial information relating to the transaction
for the financial periods ending 30 June 2013 and 30 June 2014
is set out below. The forecast financial information has not
been reviewed or reported on by a reporting accountant in terms
of section 8 of the Listings Requirements of the JSE and is the
responsibility of the company’s directors.
Forecast
Forecast for the
for the 12
9 months months
ending ending
30 June 30 June
2013 2014
R’000 R’000
Gross income 4 959 7 021
Property Expenditure ( 299) ( 458)
Net property related income 4 660 6 563
Other operating expenditure ( 295) ( 397)
Net operating income 4 365 6 166
Finance costs ( 3 970) ( 5 317)
Debenture interest ( 395) ( 849)
Net profit before tax 0 0
Taxation 0 0
Net profit after taxation 0 0
Distributable earnings: 395 849
Notes:
1. Gross income includes all tenant recoveries while Property
Expenditure includes all consumption expenditure.
2. Other operating expenditure includes asset management and
property management fees.
3. VPIF will raise debt to fund the transaction and therefore
100% of the debt for the transaction has been attributed to
this transaction.
4. The debenture interest has been calculated in accordance
with the provision of the Debenture Trust Deed.
9. CLASSIFICATION OF THE TRANSACTION
The transaction is classified as a Category 2 transaction in
terms of the Listing Requirements of the JSE.
10. RENEWAL OF CAUTIONARY ANNOUNCEMENT
Unitholders are referred to the cautionary announcement
published by the company on 29 August 2012. The company
continues to be involved in negotiations that if concluded,
could have a material effect on the price of its units.
Unitholders are therefore advised to continue to exercise
caution when dealing in their VPIF units until such time as a
further announcement is made.
Sandton
12 September 2012
Independent Lead Sponsor
Grindrod Bank Limited
Corporate Adviser and Joint Sponsor
Vunani Corporate Finance
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