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Category 2 Acquisition Announcement – Berg River Business Park, Paarl
SPEAR REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2015/407237/06)
Share Code: SEA
ISIN: ZAE000228995
LEI: 378900F76170CCB33C50
Approved as a REIT by the JSE
("Spear" or "the Company")
CATEGORY 2 ACQUISITION ANNOUNCEMENT – BERG RIVER BUSINESS PARK, PAARL
1. INTRODUCTION
Shareholders are advised that on 21 May 2025 ("Signature Date"), Spear entered into a sale of rental
enterprise agreement ("Agreement") with Berg River Business Park Proprietary Limited ("Seller"), in
terms of which Spear will acquire the properties known as the Remainder of Erf 5400, the Remainder of
Erf 5401, the Remainder of Erf 5428, Erf 11204, Erf 11205 and Erf 13058, Paarl, in the Drakenstein
Municipality, with all improvements thereon ("Property"), and the rental enterprise known as the "Berg
River Business Park" conducted by the Seller on the Property ("Rental Enterprise"), as a going concern
("Acquisition"), for a purchase consideration of R182 150 000 ("Purchase Consideration"). The Seller
is wholly owned by Erf 13058 Property Investments Proprietary Limited, which is beneficially owned by
Johan Buys, the Buys Childrens Trust and the Amberlea Trust (the beneficiaries of which Trusts are all
individuals), none of whom are related parties of Spear.
2. RATIONALE FOR THE ACQUISITION
The Acquisition aligns with Spear's strategy to grow and enhance its exposure to high quality industrial
real estate within the Western Cape. Located in the Drakenstein Municipality the well-established node
of Paarl Industria, the Property further strengthens Spear's geographic diversification within the region in
addition to its sub-sectoral industrial exposure to food and agri-logistics focussed assets. The Acquisition
of the Property supports Spear's continued focus on securing assets that deliver sustainable income
streams and long-term capital growth within the Western Cape.
3. PURCHASE CONSIDERATION
3.1. The Purchase Consideration is an amount of R182 150 000 and is inclusive of value-added tax at a
rate of 0%.
3.2. The Purchase Consideration shall be settled by Spear on the date of registration of transfer of
ownership of the Property into its name ("Transfer Date"), as follows:
3.2.1. by the payment of the cash amount required to settle the outstanding debt provided to the Seller
by Investec Bank Limited, which is currently secured by a mortgage bond registered over the
Property ("Cash Consideration"), and the payment of such Cash Consideration to Investec Bank
Limited will be secured by a bank guarantee to be issued once the Conditions Precedents (as
defined below) have been fulfilled; and
3.2.2. by settling the remaining portion of the Purchase Consideration by way of the allotment and issue
of ordinary shares in the share capital of Spear ("Spear Shares") at the issue price of R9,70 per
Spear Share ("Consideration Shares").
3.3. In terms of the Agreement, Spear may, at any time prior to or after the Transfer Date, undertake an
equity capital raise in the form of a vendor consideration placement, issue of shares for cash, a rights
offer to its shareholders and/or any other share issue or placing, in order to raise or refinance an
amount of up to 100% of the Consideration Cash.
4. CONDITIONS PRECEDENT
4.1. The Acquisition is subject to the fulfilment of the outstanding conditions precedent ("Conditions
Precedent") that:
4.1.1. by no later than 10 business days after the Signature Date, Spear obtains confirmation of funding
for the Consideration Cash portion of the Purchase Consideration, on terms and conditions
acceptable to Spear;
4.1.2. by no later than 30 days after the Signature Date, the Seller concludes a maintenance and security
agreement with the co-owner of the bridge constructed across the Berg River between the Property
and the property owned by such co-owner, on terms which are acceptable to Spear; and
4.1.3. by no later than 90 business days after the date of filing of the application for approval of the
Acquisition with the applicable competition authorities in terms of the Competition Act, No. 89 of
1998 ("Competition Authorities"), the Acquisition has been unconditionally approved by the
Competition Authorities or conditionally approved on conditions which are acceptable to the parties.
4.2. The parties may, by written agreement, extend the date by when any of the Conditions Precedent are
to be fulfilled.
5. EFFECTIVE DATE OF THE ACQUISITION
The effective date of the Acquisition will be the Transfer Date, which date shall be as soon as practically
possible after the date on which the Conditions Precedent are fulfilled, which date is anticipated as being
on or about 1 September 2025.
6. WARRANTIES AND OTHER SIGNIFICANT TERMS OF THE AGREEMENT
6.1. The Agreement contains representations and warranties by the Seller, in favour of Spear, which are
standard for a transaction of this nature. Subject to such warranties, the Rental Enterprise and Property
are sold "voetstoots".
6.2. The parties have agreed that the Consideration Shares will be issued to the Seller expressly exclusive
of any entitlement to cash dividends declared and paid by Spear from its distributable earnings in
respect of a financial period which occurred prior to the Transfer Date (whether such dividend is
declared before or after the Transfer Date) ("Excluded Dividends"). Should the Seller receive an
Excluded Dividend after the Transfer Date, as the holder of the Consideration Shares, it will repay
such amount to Spear within 5 business days of receipt.
6.3. The Seller has installed a solar energy plant at the Property, and has agreed to guarantee the saving
in electricity or over-recovery of electricity charges from the tenants under the lease agreements in
respect of the Property, as follows:
6.3.1. in the amount of R2 600 000 in respect of the period of 12 months calculated from the Transfer
Date; and
6.3.2. in the amount of R1 300 000 in respect of the period of 6 months calculated from month 13 up to
and including month 18 after the Transfer Date.
6.4. In addition, the Seller has provided a rental guarantee in respect of certain occupied units located at
the Property, for a period of 18 months following the Transfer Date
7. THE PROPERTY
Details of the Property are as follows:
Property Name Geographical Sector Gross Lettable Expected Weighted
and Address Location Area (m2) Average Gross
Rental / m2 as at the
Transfer Date
Berg River Paarl, Western Industrial 30 464 R57.60
Business Park, Cape
situated at
46 Distillery Street,
Dal Josafat, Paarl
Details regarding the Property, as at the expected Transfer Date, are set out below:
Purchase Yield Weighted Average Weighted Average Vacancy % by Gross
Attributable to Escalation Lease Duration Lettable Area
Shareholders (years)
9.35% 7.12% 5.27 0%
Notes:
a) In addition to the Purchase Consideration, Spear's costs associated with the Acquisition are
estimated at R5 450 000 which is made up of R4 700 000 of capital expenditure on the property post-
transfer and R750 000 of transaction related costs.
b) Agents' commission is payable by the Seller, in respect of the Acquisition.
c) The Purchase Consideration payable in respect of the Rental Enterprise (which includes the
Property) is considered to be its fair market value, as determined by the directors of Spear. The
directors of Spear 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.
8. FORECAST FINANCIAL INFORMATION OF THE ACQUISITION
The forecast financial information relating to the Acquisition for the 6-month period ending
28 February 2026 and the 12-month period ending 28 February 2027 are 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 JSE Limited Listings Requirements and is the responsibility of Spear's directors.
Forecast for the 6-month Forecast for the 12-month
period ending period ending
28 February 2026 (R) 28 February 2027 (R)
Rental income 14 509 858 30 447 978
Straight-line rental accrual 1 881 429 2 939 897
Gross income 16 391 287 33 387 874
Property expenses -5 417 574 -11 362 540
Net property income 10 973 714 22 025 334
Administrative expenses -435 296 -913 439
Operating profit 10 538 418 21 111 895
Finance cost -2 180 287 -4 376 935
Profit before taxation 8 358 131 16 734 960
Taxation - -
Profit after taxation 8 358 131 16 734 960
Adjusted For:
Straight-line rental accrual -1 881 429 -2 939 897
Distributable profit 6 476 702 13 795 064
Contracted 100.00% 99.74%
Near Contracted 0.00% 0.26%
Uncontracted 0.00% 0.00%
Notes:
a) Rental Income includes gross rentals and other recoveries but excludes any adjustment applicable
to the straight-line rental income accrual of leases.
b) Property expenses include all utility and council charges applicable to the Property.
c) The forecast information for the 6-month period ended 28 February 2026 has been calculated from
the anticipated Transfer Date, being on or about 1 September 2025.
d) Contracted rental income constitutes 100% of the income for the 6-month period ended
28 February 2026 and 99.74% of the income for the 12-month period ended 28 February 2027.
e) Near contracted rental income constitutes 0.26% of the income for the 12-month period ended
28 February 2027.
f) There is no uncontracted rental income.
9. CLASSIFICATION OF THE ACQUISITION
The Purchase Consideration represents more than 5% but less than 30% of Spear's market capitalisation
as at the Signature Date and accordingly the Acquisition constitutes a category 2 transaction in terms of
the JSE Limited Listings Requirements.
Cape Town
21 May 2025
Sponsor and Transaction Advisor Legal Advisor
PSG Capital ENSafrica
Date: 21-05-2025 05:00:00
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