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VIF - Vividend Income Fund Limited - Acquisition of a new property
Vividend Income Fund Limited
Previously known as Business Venture Investments No 1381 (Proprietary) Limited
Incorporated in the Republic of South Africa
(Registration Number 2010/003232/06)
JSE Alpha Code: VIF
ISIN: ZAE000150918
("Vividend" or "the Company")
ACQUISITION OF A NEW PROPERTY
1 THE RYNFIELD SHOPPING CENTRE ACQUISITION
Linked unitholders of the Company are hereby advised that the Company has
entered into an agreement with Founders Seven (Proprietary) Limited to
acquire the property and letting enterprise, commonly known as "The
Rynfield Shopping Centre" ("the Rynfield Property"), and situated at the
junction of Pretoria Street and Rickard Street, Benoni, Gauteng ("the
Rynfield Acquisition").
The effective date of the Rynfield Acquisition shall be the date of
transfer of the Rynfield Property into the name of the Company, which,
subject to fulfilment of the conditions precedent, is expected on 1 April
2011.
2 RATIONALE FOR THE ACQUISITION
The Rynfield Acquisition is consistent with Vividend`s strategy of
identifying and acquiring properties that have free cash flow yields that
provide adequate value enhancement to linked unitholders from the effective
date of their acquisition. The Rynfield Acquisition is consistent with the
timelines, objectives and projections of Vividend for the 2011 financial
period.
3 PURCHASE CONSIDERATION
The purchase consideration for the Rynfield Acquisition is R31 500 000
(thirty one million five hundred thousand rand), payable in cash against
transfer of the Rynfield Property into the name of the Company.
4 PRO FORMA FINANCIAL EFFECTS OF THE RYNFIELD ACQUISITION
The pro forma financial effects of the Rynfield Acquisition on net asset
value and net tangible asset value per linked unit are not significant and
therefore have not been disclosed.
5 FORECAST INFORMATION ON THE RYNFIELD ACQUSITION
The forecast financial information relating to the Rynfield Acquisition for
the financial periods ended 31 August 2011 and 31 August 2012 is set out
below. The forecast financial information has not been reviewed or reported
on by a reporting accountant in terms of section 8 of the Listings
Requirements of the JSE Limited and is the responsibility of the Company`s
directors.
Forecast 5 months Forecast 12 months ending
ending 31 August 31 August 2012
2011
Gross Income 1,720,857 4,305,114
Property 229,945 568,910
Expenditure
Net Property Income 1,490,912 3,736,204
Property Income 0 0
after interest and
taxation
Annualised Yield on 11.52% 11.86%
Property
Notes:
1 The forecast information for the 5 months ending 31 August 2011 has been
calculated from the anticipated effective date of the Rynfield Acquisition,
being 1 April 2011.
2 Contractual income constitutes 100% of Gross Income for both the 5 month
period ending 31 August 2011 and for the 12 month period ending 31 August
2012.
3 Un-contracted income constitutes 0% of the Gross Income for both the 5
month period ending 31 August 2011 and for the 12 month period ending 31
August 2012.
4 100% of Net Property Income is distributed to linked unit holders as
interest in accordance with the Debenture Trust Deed of the Company.
6 PROPERTY SPECIFIC INFORMATION
Details regarding the Rynfield Acquisition are set out below:
Property name Rynfield Shopping Centre (Benoni)
Location Corner of Pretoria Street an Rickard
Street Benoni, Gauteng
GLA m2 3,988
Single or multi-tenanted Multi
Weighted average gross rental R86.80
per m2
Vacancy by GLA Nil or 0%
Annualised property yield 11.53% (YR 1)
11.86% (YR2)
Purchase price R31 500 000
Value R31 500 000
Notes:
1 The weighted average escalation percentage, calculated by GLA,
within the Rynfield Property lease profile is 7%.
2 The weighted average lease period, calculated by GLA, within the
Rynfield Property lease profile is 3.9 years.
3 The value of the Rynfield Property of R31 500 000 was arrived at by
a directors valuation as at 18 February 2011. The directors of the
Company are not independent and are not registered as professional
valuers or as professional associate valuers in terms of the Property
Valuers Profession Act, No 47 of 2000.
4 Save for costs associated with the transfer of the Rynfield
Property, which amount to R75 000, no expenditure will be incurred by
the Company in connection with the Rynfield Acquisition.
7 CONDITIONS PRECEDENT
The Rynfield Acquisition is subject the following conditions precedent:
a)The satisfactory completion of a due diligence investigation performed by
the Company on the Rynfield Property and letting enterprise, by 11 March
2011; and
b)The shareholders of Founders Seven (Proprietary) Limited passing the
required resolution in terms of Section 228 of The Companies Act 61 of
1973.
The Company is entitled to waive the condition precedent set out in
paragraph a) above.
8 WARRANTIES
Founders Seven (Proprietary) Limited have provided the Company with
warranties and indemnities which are usual for a transaction of this
nature, the most important of which is a 12 (twelve) month Net Property
Income guarantee, effective from the first day of the month succeeding the
month in which the transfer of the Rynfield Property is made into the name
of the Company.
9 CATEGORISATION
The Rynfield Acquisition is a Category 2 acquisition in terms of the
listings requirements of the JSE Limited.
Cape Town
23 February 2011
Sponsor
PSG Capital (Pty) Limited
Date: 23/02/2011 08:00:02 Supplied by www.sharenet.co.za
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