FREEDOM PROPERTY FUND LIMITED - Disposal of properties by wholly owned subsidiaries of Freedom

Disposal of properties by wholly owned subsidiaries of Freedom

FREEDOM PROPERTY FUND LIMITED
Incorporated in the Republic of South Africa
Registration number: 2012/129186/06
Share code: FDP
ISIN: ZAE000185260
(“Freedom” or “the Company” or “the Group”)

DISPOSAL OF PROPERTIES BY WHOLLY OWNED SUBSIDIARIES OF FREEDOM

1. INTRODUCTION
The board of directors of Freedom (“Board”) is pleased to announce that Freedom has, through its
wholly owned subsidiaries, Zambesa Investments Proprietary Limited (“Zambesa”) and Tubatse Estate
Proprietary Limited (“Tubatse Estate”), concluded respective sale of property agreements on 28 May
2019 with Cecilo Investments CC (“Cecilo”), relating to:

1.1     the disposal by Zambesa of 8 residential units plus 33 serviced stands in the sectional scheme
        known as Tubatse Homes SS 758/2017 to Cecilo (“Tubatse Homes Transaction”); and
1.2     the disposal by Tubatse Estate of the remaining extent of the Burgersfort Extension 40
        Township situated at Portion 6 of the farm Witgatboom 316 (“Tubatse Estate Transaction”)
        (collectively “the Disposals” or “the Properties”).

Freedom is a capital growth fund with a diversified portfolio of properties in the commercial, industrial
and residential sectors. Cecilo is a property developer.

2. RATIONALE FOR THE DISPOSALS
The Disposals are in line with Freedom’s strategy of divesting of non-core assets as communicated to
shareholders on 15 March 2016.

The proceeds from the Disposals will be utilised to reduce debt in the Group.

3. PURCHASE CONSIDERATION
3.1     Tubatse Homes Transaction
        The total purchase consideration is R12.6 million (exclusive of Value Added Tax), settled in
        cash as follows:
        • a non-refundable cash deposit of R126 000, which amount has already been paid; and
        • the balance of R12 474 million on registration of transfer of the property encompassed in
           the Tubatse Homes Transaction, subject to Cecilo furnishing the duly appointed
           Conveyancers (“Conveyancers”) on or before 5 July 2019 with a bank guarantee in respect
           of this amount.

3.2     Tubatse Estate Transaction
        The total purchase consideration is R50 million (exclusive of Value Added Tax), settled in cash
        as follows:
        • a non-refundable cash deposit of R500 000, which amount has already been paid; and
        • the balance of R49.5 million on registration of transfer of the property encompassed in the
            Tubatse Estate Transaction subject to Cecilo furnishing the Conveyancers on or before
            5 July 2019 with a bank guarantee in respect of this amount.
3.3    The Disposals have been concluded “voetstoots”, save for warranties that are standard in
       respect of transactions of this nature.

4. CONDITIONS PRECEDENT
   The Disposals are conditional, inter alia, upon
   • the completion of a due diligence investigation by Cecilo in respect of the Properties by
       28 June 2019;
   • Cecilo being granted loans of R12.6 million and R50 million by a registered bank by 28 July
       2019; and
   • approval being granted for the Disposals by Freedom shareholders in general meeting.

5. INFORMATION RELATING TO THE PROPERTIES
The specifics of the Properties are as follows:

5.1    Tubatse Homes Transaction

        Location:                     Erf 597, Burgersfort Extension 40 Township, Limpopo
                                      Province
        Rentable area:                Unit 1 – 182 square metres
                                      Unit 4 – 184 square metres
                                      Unit 5 – 183 square metres
                                      Unit 6 – 183 square metres
                                      Unit 7 – 174 square metres
                                      Unit 8 – 175 square metres
                                      Unit 9 – 174 square metres
                                      Unit 10 – 177 square metres
        Valuation: (Note 1)           R14 350 000
        Weighted average rental per Nil – no rental activity is currently undertaken
        square metre for the rentable
        area: (Note 2)
        Original purchase price:      R8 688 525
        Date initially acquired:      20 March 2014

5.2    Tubatse Estate Transaction

        Location:                     The remaining extent of Burgersfort Extension 40
                                      Township situated at Portion 6 of the farm Witgatboom
                                      316, Registration Division KT, Limpopo Province
        Rentable area:                None
        Valuation: (Note 1)           R19 700 000
        Weighted average rental per None
        square metre for the rentable
        area: (Note 3)
        Original purchase price:      R18 400 000
        Date initially acquired:      20 March 2014

Note 1 – An independent external valuation was obtained from Real Insights Proprietary Limited in
respect of the Properties (“Independent Valuation”), which valuation was undertaken by TLJ Behrens
and HN Hartman (Professional Associated Valuer and Professional Valuer, respectively), registered
without restriction in terms of the Property Valuers Profession Act, No. 47 of 2000. The values
attributed at 28 February 2018 has been derived from the comparable sales method of valuation.

Note 2 – The property is no longer being rented out and accordingly no weighted average rental per
square metre for the rentable area is applicable.

Note 3 – No rental income applies to this property.

6. EFFECTIVE DATE
The effective date of the Disposals will be the date of fulfilment of all the conditions precedent.

7. FINANCIAL INFORMATION ATTRIBUTABLE TO THE PROPERTIES

7.1     The total value of the Properties is R34 050 000; R14 350 000 in respect of the Tubatse Homes
        Transaction and R19 700 000 in respect of the Tubatse Estate Transaction in terms of the
        Independent Valuation.

7.2     There is no rental income applicable to the Properties in respect of the financial year ended
        28 February 2019, based on the unaudited management accounts of Freedom, reported in
        accordance with the International Financial Reporting Standards. Freedom is satisfied with the
        quality of the management accounts.

8. CATEGORISATION
In terms of the JSE Limited Listings Requirements (“Listings Requirements”), the Disposals are subject
to shareholders’ approval in terms of the aggregation requirements set out in the Listings
Requirements and accordingly a circular to shareholders of Freedom will be distributed in due course.


Paarl
29 May 2019

Sponsor and Corporate Advisor
Questco Corporate Advisory Proprietary Limited

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