DELTA PROPERTY FUND LIMITED - Proposed disposal of Beaconsfield and extension to posting of circular

Proposed disposal of Beaconsfield and extension to posting of circular

DELTA PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2002/005129/06)
JSE share code: DLT
ISIN: ZAE000194049
(Approved as a REIT by the JSE)
("Delta" or the “Company”)


PROPOSED DISPOSAL OF BEACONSFIELD AND EXTENSION TO POSTING OF CIRCULAR


Proposed disposal of Beaconsfield
1.    Introduction
      Delta shareholders are hereby advised that the Company (“Seller”) has entered into an
      agreement (“Agreement”) with Dino & Lambro Investments CC (“Purchaser”) to dispose of its
      property situated at 28 Central Road, Kimberley, together with all buildings and improvements
      thereon, as more commonly known as “Beaconsfield” (the “Property”), for a cash consideration
      of R22.1 million (“Disposal Consideration”).


2.    Rationale and use of proceeds
      As part of Delta’s strategy, and the optimisation of the portfolio, it was agreed that the disposal
      of assets which were no longer strategic to the Company would be undertaken. Beaconsfield is
      considered one such asset.


      The net proceeds of R21.6 million (net of commission) will be utilised by the Company to reduce
      debt and the Loan to Value (LTV) by 0.1% from 58.2% to 58.1%.


3.    Terms and conditions of the Disposal
      3.1   Purchasers
            The ultimate beneficial shareholder of Dino & Lambro Investments CC is Mr Costandinos
            Athanasiou. The Purchaser is not a ‘related party’ in terms of the JSE Limited Listings
            Requirements.
3.2   Sale
      The Seller has agreed to sell, and the Purchaser has agreed to purchase the Property, with
      effect from, and inclusive, of the date on which the registration of transfer of the Property
      into the name of the Purchaser is affected, which date the Company anticipates will be
      approximately 31 March 2023.


3.3   Disposal Consideration
      The Disposal Consideration payable for the Properties by the Purchasers is R22.1 million
      exclusive of VAT, payable in cash.


3.4   Conditions precedent
      The Disposal is subject to the fulfilment of the following conditions precedent:
      3.4.1     waiver of the right of first refusal by the Government of the Republic of South
                Africa within sixty (60) business days of being notified in writing by the Seller of
                the Disposal;
      3.4.2     the Seller shall provide to the Purchaser with proof of submissions and copies of
                plans submitted to council for approval within thirty (30) calendar days of the
                condition in paragraph 3.4.1 above being fulfilled but not later than sixty (60)
                calendar days from 12 December 2022 (“Date of Acceptance”);
      3.4.3     the Seller completing and providing the signed off fire report by the Seller’s fire
                engineer that additional fire requirements have been completed within thirty
                (30) calendar days of the condition in paragraph 3.4.1 above being fulfilled, but
                not later than sixty (60) calendar days from Date of Acceptance; and
      3.4.4     the Seller providing a mechanical certificate in respect of the heating, ventilation
                and air conditioning (“HVAC”) work completed in Block B of the Property within
                thirty (30) calendar days of the condition in paragraph 3.4.1 above being fulfilled,
                but not later than sixty (60) calendar days from Date of Acceptance.


3.5   Representations and warranties
      The Agreement contains representations and warranties by the parties in favour of one
      another which are standard for transactions of this nature.
4.    Financial and property-related information in respect of the Properties
                                                           Beaconsfield
      Location:                                            28 Central Road, Kimberley
      Gross lettable area:                                 5 801m2
      Weighted average rental as at 31 August 2022:        R123.3/m2
      Net operating income¹:                               R1.7 million
      Effective date of the Disposal:                      On or about 31 March 2023, being the
                                                           anticipated transfer date of the Property
                                                           into the name of the Purchaser
      Vacancy rate as at 31 August 2022:                   40.0%
      Value of the Property as at 31 August 20222:         R21.6 million
      Sector:                                              Office


      Notes:
      1.     The net operating income in respect of the Property has been extracted from the
             Company’s results for the interim period ended 31 August 2022, which were prepared in
             terms of International Financial Reporting Standards.
      2.     The valuation was performed as at 31 August 2022 by Real Insight who is independent
             from the Company and registered as a professional valuer in terms of the Property Valuers
             Profession Act, No. 47 of 2000.
      3.     The financial information in this announcement is the responsibility of the board and has
             not been reported on or reviewed by Delta’s auditors or a reporting accountant.


5.    Categorisation
      The Disposal of Beaconsfield is classified as a Category 2 transactions in terms of the JSE Listings
      Requirements. Accordingly, it is not subject to shareholder approval.


Extension to posting of circular
Shareholders are further referred to the announcement released on 1 December 2022 relating to the
disposal by the Company, through its wholly owned subsidiary K2014000273 (South Africa) Proprietary
Limited, of its leasehold property situated at 121 Chief Albert Luthuli Street, Pietermaritzburg, as more
commonly known as “Capital Towers”, for a cash consideration of R65.55 million, including VAT (the
“Capital Towers Disposal”).
The Capital Towers Disposal is classified as a Category 1 transaction in terms of the JSE Listings
Requirements, as the Company is required to apply the JSE’s aggregation rule contained in paragraph
9.11 of the JSE Listings Requirements. Accordingly, a circular, incorporating a notice of general meeting
and setting out the full details of the disposal transaction (“Circular”) is required to be posted to
shareholders within 60 days of publication of the announcement, which would be by Friday, 27 January
2023.


Shareholders are hereby advised that due to the upcoming holiday period and the timing of the
Company’s staff and advisors annual leave, the JSE has granted an extension for the posting of the
Circular to shareholders from 27 January 2023 to no later than 31 March 2023


Johannesburg
13 December 2022


Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited

Date: 13-12-2022 04:35:00
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