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Growthpoint - Transfer Of Properties And Commencement Of Growthpoint"s Commercial Mortgage Backed Securitisation ("CMBS") Programme Growthpoint Properties Limited (Incorporated in the Republic of South Africa) Registration number 1987/004988/06 Share code: GRT ISIN: ZAE000037669 ("Growthpoint") TRANSFER OF PROPERTIES AND COMMENCEMENT OF GROWTHPOINT"S COMMERCIAL MORTGAGE BACKED SECURITISATION ("CMBS") PROGRAMME 1. INTRODUCTION Investec Bank Limited is authorised to announce that Growthpoint has concluded an agreement to sell certain properties ("the Property Portfolio") to the Growthpoint Securitisation Warehouse Trust (the "Trust") for an aggregate sale consideration of R442,7 million ("the Sale Consideration") (the "Transaction") in commencement of its CMBS programme. The Property Portfolio comprises the properties acquired from the Lyons Corporate Lease Fund as well as the properties known as Paddocks and Menlyn Piazza, all recently acquired by Growthpoint. The effective date of the disposal will be the date of transfer of the Property Portfolio, which is expected to be before the end of October 2005 ("the Transfer Date"). 2. TERMS OF THE TRANSACTION 2.1 Sale Consideration The Sale Consideration will be settled as follows on the Transfer Date: - R275 million by way of loan account in favour of Growthpoint between the Trust and Growthpoint; and - R167,7 million by way of a capital contribution by Growthpoint to the Trust. 2.2 Terms of the Trust The Trust was registered for the sole purpose of holding properties in order to facilitate the Transaction and Growthpoint"s CMBS programme. In terms of the Trust deed, the objects of the Trust are limited to the conclusion of agreements under the Transaction, compliance by the Trust with its obligations thereunder, the management of the assets of the Trust for the benefit of Growthpoint as beneficiary, the conduct of the business of a property owner and the declaration of income and capital distributions to Growthpoint as sole vested income and capital beneficiary. Steinway Trustees (Proprietary) Limited (the "Trustees") are the independent trustees of the Trust. The powers of the Trustees are limited by the provisions of the Trust Deed. Growthpoint shall provide strategic asset management and operational property management services to the Trust. All of the rights of the Trust as property owner and all decision-making powers in respect of the properties held by the Trust are exercised by Growthpoint on behalf of the Trust. 2.3 Properties held by the Trust The Trust currently owns 23 properties with a value of R842,6 million, which were acquired by the Trust from Tresso Trading 119 (Proprietary) Limited ("Tresso") as Growthpoint"s nominee in terms of the agreement concluded between Growthpoint and Tresso. On the Transfer Date the Trust will own a property portfolio with a total cost of R1 285,3 million. 2.4 Rationale and proposed benefits of the Transaction and Growthpoint"s CMBS programme The Transaction represents the next step towards Growthpoint achieving its objectives with regard to a R5 billion CMBS programme and the initial issue by Growthpoint Note Issuer Company (Proprietary) Limited (the "Issuer") of approximately R805 million of bonds to be listed on the Bond Exchange South Africa before the end of November 2005. The proposed benefits of Growthpoint"s CMBS programme include: - lower average cost of borrowings; - diversification of borrowing sources; - increased competitive advantage of Growthpoint to make value enhancing acquisitions; and - increased distributions to Growthpoint linked unit holders. 3. FINANCIAL EFFECTS The Trust provides Growthpoint with "transparency" for tax purposes (as all amounts accruing to the Trust are deemed to accrue to Growthpoint as the sole vested income and capital beneficiary) while simultaneously ensuring the properties held by the Trust are ring-fenced and shielded from any Growthpoint insolvency. For accounting purposes, the assets of the Trust shall be consolidated in Growthpoint"s balance sheet and from a financial perspective, the Properties shall be treated as if they are held directly by Growthpoint. Accordingly, the Transaction will not have an effect on the earnings per Growthpoint linked unit, distribution per Growthpoint linked unit or net asset value per Growthpoint linked unit. For and on behalf of the board Growthpoint Properties Limited Sandton 10 October 2005 Merchant bank Investec Corporate Finance Investec Bank Limited (Registration number 1969/004763/06) Sponsor Investec Bank Limited (Registration number 1969/004763/06) Arranger and Manager Investec Treasury & Specialist Finance Investec Bank Limited (Registration number 1969/004763/06) Attorneys to the Arranger and Issuer WEBBER WENTZEL BOWENS Attorneys to Growthpoint JOWELL GLYN & MARAIS Date: 11/10/2005 07:05:07 AM Supplied by www.sharenet.co.za Produced by the JSE SENS Department
