ARROWHEAD PROPERTIES LIMITED - Acquisition of Sasol Building and Cautionary Announcement

Acquisition of Sasol Building and Cautionary Announcement

ARROWHEAD PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2011/000308/06)
JSE share code: AWA ISIN: ZAE000158101
JSE share code: AWB ISIN: ZAE000158119
(Approved as a REIT by the JSE)
(“Arrowhead”)


ACQUISITION OF SASOL BUILDING AND CAUTIONARY ANNOUNCEMENT


1.     Introduction

       Linked unitholders are advised that Arrowhead has concluded an agreement for the acquisition of the Sasol Building (the “property”)
       situated at 1 Sturdee Avenue, Rosebank (the “acquisition”) from Sasol Pension Fund (the “seller”) for an aggregate purchase consideration
       of R250 million (inclusive of VAT at zero percent) (the “purchase price”).

       The acquisition, at a forward yield of approximately 15% is in line with Arrowhead’s strategy of only making distribution enhancing
       acquisitions. Unless the lease is extended, Sasol will be vacating the premises at the end of the lease term on 31 December 2016.
       Arrowhead is satisfied that:

       -       the premises are well located in good office node that (in the medium and long term) has strong prospects and, as a result, that the
               (given its size and quality) the building is highly lettable; and

       -       the high initial yield adequately compensates for the risk of negative reversions at the expiry of the current lease.

2.     Terms of the acquisition and conditions precedent

       Arrowhead will acquire the business with effect from the later of 1 February 2014 and the date on which the acquisition becomes
       unconditional.

       The total purchase consideration payable by Arrowhead in respect of the acquisition is R250 million, R125 million of which will be paid in
       cash and the balance of R125 million will be payable by the allotment and issue of 9 259 260 Arrowhead A linked units and 9 259 260
       Arrowhead B linked units.

       The acquisition remains conditional upon Competition approval.

3.     The property portfolio

       The property specific information required in terms of the JSE Listings Requirements in relation to the property including property name and
       address, geographical location, rentable area, and weighted average rental per square metre is set out below.

       Property name and address                                                 1 Sturdee Avenue, Rosebank
       Sector                                                                    Office
       Geographical location                                                     Johannesburg
       Rentable Area (m2)                                                        13 350
       Weighted Average rental per m2                                            R207.76

       No independent valuation has been carried out and the board of Arrowhead is of the view that the purchase price of R250 million represents
       the value of the property.

4.     Categorisation of the acquisition

       The acquisition is classified as a Category 2 transaction in terms of the JSE Listings Requirements. Accordingly it is not subject to approval
       by Arrowhead’s linked unitholders.

5.     Financial effects and cautionary announcement

       The financial effects of the acquisition are still in the process of being finalised and will be published in due course. Unitholders of
       Arrowhead are advised to continue to exercise caution when dealing in their linked units until the financial effects of the acquisition are
       announced.

13 December 2013


Corporate advisor, legal advisor and sponsor

Java Capital

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