RESILIENT PROPERTY INCOME FUND LTD - Acquisition of Jubilee Mall

Acquisition of Jubilee Mall

RESILIENT PROPERTY INCOME FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2002/016851/06)
JSE share code: RES ISIN: ZAE000043642
(Approved as a REIT by the JSE)
(“Resilient”)


ACQUISITION OF JUBILEE MALL


1.   INTRODUCTION

     Resilient has concluded an agreement for the acquisition of a rental enterprise conducted in respect of and
     including the property and building situated at c/o Jubilee Road (D154) and Harry Gwala Road (D2757),
     Hammanskraal (Erf 13299 Hammanskraal West Extension, 7 Township Registration Division JR, Province of
     Gauteng) known as Jubilee Mall (“Jubilee Mall” or “the property”) from NAD Property Income Fund
     Proprietary Limited (“the seller”) (“the acquisition”).

2.   RATIONALE FOR THE ACQUISITION

     The acquisition is in line with Resilient’s strategy of investing in dominant regional retail properties.

3.   DETAILS OF THE PROPERTY

     Jubilee Mall is a shopping centre with a gross lettable area of 52 577 square metres of which 51 377 square
     metres is retail and 1 200 square metres is office. The weighted average net rental per square metre per month is
     R116.54.

     Assuming that the purchase price is R975 000 000 and taking into account current rental rates, the forward
     acquisition yield is 7.5%. The aforegoing forecast statement is the responsibility of the directors of Resilient and
     has not been reviewed or reported on by Resilient’s auditors or reporting accountants.

4.   TERMS OF THE ACQUISITION

     4.1.   The acquisition will be with effect from the date of transfer of ownership of the property into the name of
            Resilient (“date of transfer”).
     4.2.   Should transfer take place between 1 and 30 September 2014, the purchase price for the acquisition will be
            an amount of R975 000 000 (“the purchase price”) payable by Resilient to the seller on the date of
            transfer, or should transfer of the property take place on or after 1 October 2014, the purchase price will be
            an amount of R981 350 000, which amount shall escalate at a rate of 7.7% per annum, calculated daily and
            compounded monthly from 2 October 2014 until date of transfer (both days inclusive) and shall be payable
            by Resilient to the seller on the date of transfer.
     4.3.   The purchase price shall be discharged as follows:
            4.3.1. an amount of R375 000 000 will be discharged by Resilient issuing and allotting 6 578 947 new
                   Resilient linked units at a price of R57.00 per linked unit to the seller on the date of transfer; and
            4.3.2. the balance of the purchase price will be settled in cash.
     4.4.   The agreement governing the acquisition provides for warranties that are standard for acquisitions of this
            nature.

5.   CONDITIONS PRECEDENT

     The acquisition is conditional upon the fulfilment of the following conditions:

     5.1.   the seller delivering to Resilient written confirmation that any pre-emptive rights and/or options to acquire
            the property that exist in favour of any third party whatsoever, including but not limited to any tenants in
            terms of the leases, have been waived in writing, within a period of 14 days from the date of signature of
            the sale agreement (“date of signature”);
     5.2.   Resilient confirming, in writing, to the seller that it is satisfied with the results of the due diligence of the
            property, within 30 days from the date of signature;
     5.3.   Resilient’s board of directors resolving to approve the acquisition, within 14 days from the date of
            fulfilment of the condition precedent in 5.2;
     5.4.   the Competition Commission or the Competition Tribunal approving the implementation of the acquisition
            in terms of the Competition Act within 90 days from the fulfilment of 5.2 above; and
     5.5.   to the extent necessary and relevant to this acquisition, any other regulatory approvals that may be required
            in accordance with the regulations of the JSE being obtained, within 90 days from the date of signature.

6.   VALUATION

     Jubilee Mall was valued at R985 200 000 as at 1 September 2014 by Peter Parfitt of Quadrant Properties
     Proprietary Limited, who is independent and registered as a professional valuer in terms of the Property Valuers
     Profession Act, No 47 of 2000.

7.   CATEGORISATION

     The acquisition of the property constitutes a category 2 transaction in terms of the JSE Listings Requirements and
     accordingly does not require approval by linked unitholders.

8.   FINANCIAL EFFECTS

     The pro forma financial effects of the acquisition on Resilient’s basic earnings, diluted basic earnings, headline
     earnings and diluted headline earnings per share/linked unit, distribution per linked unit, net asset value per
     linked unit and net tangible asset value per linked unit, based on the pro forma financial information for the six
     month period ended 31 December 2013 as disclosed in the rights offer circular issued on 25 April 2014, are not
     significant and accordingly have not been disclosed.

27 May 2014

Corporate advisor and sponsor
Java Capital

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