Wrap Text
Proposed disposal of Capital Towers
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 CAPITAL TOWERS
1. Introduction
Delta shareholders are hereby advised that the Company, through its wholly-owned subsidiary K2014000273 (South Africa)
Proprietary Limited (“Seller”), has entered into an agreement (“Agreement”) dated 30 November 2022 (“Signature Date”) with
DMFT Property Developers Proprietary Limited (“Purchaser”) to dispose of its leasehold property situated at 121 Chief Albert
Luthuli Street, Pietermaritzburg, as more commonly known as “Capital Towers” (the “Property”), for a cash consideration of
R65.55 million, including VAT (“Disposal Consideration”).
2. Rationale and use of proceeds
The Delta board of directors (“Board”) continues to confirm the strategy for the Company as being underpinned by the
Sovereign, with a more refined approach to the definition of Sovereign. As part of the 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.
Capital Towers is considered one such asset.
The proceeds of R57.0 million will be utilised by the Company to reduce debt and the Loan to Value (LTV) by 0.3% from 57.9%
to 57.6% and to reduce vacancy levels by 0.8% from 33.9% (31 August 2022) to 33.1%.
3. Terms and conditions of the Disposal
3.1. The Disposal
The Seller has agreed to sell to the Purchaser the Property (including all buildings erected on the Property together with
all moveable and fixed assets, and all fixtures and fittings) and its leasehold rights (“Leasehold Rights”) in terms of a
notarial deed of cession and assignment (“Deed of Cession”) over Erf 2426 Pietermaritzburg, Registration Division FT,
Msunduzi Municipality (the “Lessor”), Province of KwaZulu-Natal.
3.2. Purchaser
The ultimate beneficial shareholders of DMFT Property Developers Proprietary Limited are Mr David Mabilu and his
family. The Purchaser is not a ‘related party’ in terms of the JSE Limited (the “JSE”) Listings Requirements.
3.3. Effective date
The Seller has agreed to sell, and the Purchaser has agreed to purchase, the Leasehold Rights and the Property with
effect from, and inclusive of, the date on which the registration of the Deed of Cession into the name of the Purchaser,
which date the Company anticipates will be approximately 31 May 2023 (“Registration Date”).
3.4. Disposal Consideration
The Disposal Consideration payable for the Leasehold Rights and the Property by the Purchaser is payable in cash as
follows:
3.4.1. R1.0 million refundable deposit within 7 business days of the Signature Date;
3.4.2. R1.85 million refundable deposit on the date Delta’s shareholders approve the Disposal (see paragraph 5
below); and
3.4.3. the balance of R62.7 million against registration of the Deed of Cession into the name of the Purchaser.
3.5. Conditions precedent
The Disposal is subject to the fulfilment of the following conditions precedent:
3.5.1. within 150 calendar days following the Signature Date, the Company obtains JSE approval for the Circular
(defined below) and the required Delta shareholder approval;
3.5.2. within 90 calendar days following the Signature Date, the Company obtains written consent from the Lessor
to conclude the Disposal; and
3.5.3. within 10 calendar days following the Signature Date, the Purchaser provides Delta with a copy of the
necessary board resolutions authorising the Purchaser to conclude the Disposal.
3.6. 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 Property
Capital Towers
Location: 121 Chief Albert Luthuli Street, Pietermaritzburg
Gross lettable area: 11 102m2
Weighted average rental as at 31 August 2022: R0/m2
Net operating loss¹: R0.9 million
Effective date of the Disposal: On or about 31 May 2023, being the date on which the
registration of the Deed of Cession into the name of the
Purchaser is expected to occur
Vacancy rate as at 31 August 2022: 100%
Value of the Property as at 31 August 20222: R47.1 million
Sector: Office
Notes:
1. The net operating loss 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 and the Circular
The 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 due to the fact that it has
transacted with the Purchaser during the 12 months prior to the conclusion of the Agreement in respect of the Disposal, being
the disposal of the Fort Drury and Katleho buildings as announced on SENS on 5 August 2022. Accordingly, the Disposal is
subject to Delta shareholder approval.
A circular, incorporating a notice of general meeting and setting out full details of the Disposal (the “Circular”), will be
distributed to Delta shareholders within 60 days of this announcement. A further announcement will be released on SENS on
distribution of the Circular.
Johannesburg
1 December 2022
Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Date: 01-12-2022 05:42:00
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