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FPT - Fountainhead Property Trust - Proposed acquisition by Fountainhead

Release Date: 25/01/2011 08:00
Code(s): FPT
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FPT - Fountainhead Property Trust - Proposed acquisition by Fountainhead Property Trust of Access Park Fountainhead Property Trust A Collective Investment Scheme in property registered in terms of the Collective Investment Schemes Control Act, No.45 of 2002 and managed by Fountainhead Property Trust Management Limited (Registration number 1983/003324/06) Share code: FPT ISIN code: ZAE000097416 ("Fountainhead") PROPOSED ACQUISITION BY FOUNTAINHEAD PROPERTY TRUST ("FOUNTAINHEAD") OF ACCESS PARK 1. INTRODUCTION Unitholders are advised that Fountainhead has concluded an agreement ("the agreement") for the acquisition of Access Park, namely erf 142906 Cape Town at Claremont in extent of 38,421sqm`s and erf 144388 Cape Town at Claremont in extent of 5,353sqm`s ("the acquisition"). The sellers of erf 142906 are Kovacs Investments 338 (Proprietary) Limited, Forum SA Trading 143 (Proprietary) Limited and Momentum Property Investments (Proprietary) Limited. The sellers of erf 144388 are Kovacs Investments 272 (Proprietary) Limited and Kovacs Investments 340 (Proprietary) Limited. The acquisition of the two properties will be inextricably linked and transfer will happen simultaneously in the deeds office. The property is located at the corner of Chichester and Doncaster Road in Kenilworth, Cape Town and is easily accessible and visible from the M5 Freeway. The property offers value for money retail and comprises a unique mix of branded outlet stores and discount retailers. 2. THE ACQUISITION 2.1 Rationale The acquisition is in line with Fountainhead`s strategy of acquiring quality retail assets which are located in strong retail nodes and possess good future growth prospects. 2.2 Consideration and terms of the agreement The combined purchase price (for both properties) is approximately R418.57 million, which means that in terms of the JSE Limited ("JSE") Listing Requirements Section 9, the acquisition is regarded as a Category 2 transaction. The effective date of the acquisition is the transfer date which is anticipated to be 1 June 2011. 2.3 Details of the property The total rentable area of the properties is 20,164sqm`s at a weighted average gross rental of R153 per sqm as at 1 January 2011. The weighted average rental escalation by rentable area for the property is approximately 11% and the annualised property yield is 8.69%. 3. FINANCIAL INFORMATION RELATING TO THE ACQUISITION The pro forma financial effects, before and after the acquisition, on Fountainhead`s basic earnings per unit ("EPU"), headline earnings per unit ("HEPU"), distribution per unit ("DPU") and net asset value ("NAV")per unit for the year ended 30 September 2010 are illustrated below. The financial effects are the responsibility of Fountainhead`s directors, and have been prepared for illustrative purposes only to show how the acquisition may have affected Fountainhead`s results for the year ended 30 September 2010. The pro forma financial effects, due to their nature, may not fairly reflect Fountainhead`s financial performance and position after the acquisition. Before the After the % Change acquisition audited acquisition (cents) audited
(cents) EPU 55.15 55.44 0.53 HEPU 55.53 55.82 0.52 DPU 54.08 54.37 0.54 NAV per unit 674 674 0.00 Weighted number of 996.04 996.04 0.00 units in issue (million) Actual number of units 996.04 996.04 0.00 in issue (million Notes and assumptions - the amounts set out in the " Before the acquisition " column have been extracted, without adjustment, from the audited annual financial statements of Fountainhead for the year ended 30 September 2010; - the acquisition has been completely debt funded at a borrowing rate of 8 percent; - for the purpose of calculating EPU (basic and diluted), and HEPU (basic and diluted) and DPU, the acquisition was effected on 1 October 2009 using the expected earnings of the property for the twelve months 1 June 2011 to 31 May 2012; and - for the purpose of calculating NAV per unit, the acquisition was effected on 30 September 2010. 4. CONDITIONS PRECEDENT The acquisition is subject to the following conditions precedent: - Fountainhead undertaking a due diligence investigation of the properties - Conclusion of a new management and leasing agreement - Competition Commission approval - Conclusion of the bare dominium sale agreement for erf 142906 Cape Town at Claremont and erf 144388 Cape Town at Claremont 25 January 2011 Cape Town Sponsor Standard Bank Date: 25/01/2011 08:00:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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