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VIF - Vividend Income Fund Limited - Acquisition of new properties

Release Date: 31/03/2011 16:44
Code(s): VIF
Wrap Text

VIF - Vividend Income Fund Limited - Acquisition of new properties 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 NEW PROPERTIES THE CHURCH STREET (PIETERMARITZBURG) PROPERTY 1. THE CHURCH STREET (PIETERMARITZBURG) ACQUISITION Linked unitholders of the Company are hereby advised that the Company has entered into an agreement with R & A Admin CC to acquire the property and letting enterprise, commonly known as "Edgars Church Street" ("the Church Street (Pietermaritzburg) Property"), located on portions 3 and 4 of Erf 2421 and portions 4, 5 and 6 of Erf 2422 Pietermaritzburg, KwaZulu-Natal ("The Church Street (Pietermaritzburg) Acquisition") The effective date of the Church Street (Pietermaritzburg) Acquisition shall be the date of transfer of the Church Street (Pietermaritzburg) Property into the name of the Company, which, subject to fulfilment of the condition precedent, is expected on 1 May 2011. 2. RATIONALE FOR THE ACQUISITION The Church Street (Pietermaritzburg) 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 Church Street (Pietermaritzburg) Acquisition is consistent with the timelines, objectives and projections of Vividend for the 2011 financial period. 3. PURCHASE CONSIDERATION The purchase consideration for the Church Street (Pietermaritzburg) Acquisition is R38 400 000 (thirty eight million four hundred thousand rand), payable in cash against transfer of the Church Street (Pietermaritzburg) Property into the name of the Company. 4. PRO FORMA FINANCIAL EFFECTS OF THE CHURCH STREET (PIETERMARITZBURG) ACQUISITION The pro forma financial effects of the Church Street (Pietermaritzburg) 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 CHURCH STREET (PIETERMARITZBURG) ACQUISITION The forecast financial information relating to the Church Street (Pietermaritzburg) 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 for the 4 Forecast for the 12 months ending 31 months ending 31 August 2011 August 2012
Gross Income R1,349,395 R4,142,643 Property - - Expenditure Net Property Income R1,349,395 R4,142,643 Property Income - - after interest and taxation Annualised Yield on 10.54% 10.79% Property Notes: 1. The forecast information for the 4 months ending 31 August 2011 has been calculated from the anticipated effective date of the Church Street (Pietermaritzburg) Acquisition, being 1 May 2011. 2. Contractual income constitutes 100% of Gross Income for both the 4 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 4 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 Church Street (Pietermaritzburg) Acquisition are set out below: Property name Church Street (Pietermaritzburg) Location 219 Church Street, Pietermaritzburg
GLA 5,125 m2 Single or multi-tenanted Single tenanted retail centre A Tenant percentage by GLA 100% A Tenant percentage by Gross 100% Income Weighted average gross rental R65.82 per m2 Vacancy by GLA Nil Annualised property yield 10.54% Purchase price R38,400,000 Value R38,400,000 Notes: 1. The weighted average escalation percentage, calculated by GLA, within the Church Street (Pietermaritzburg) Property lease profile is the lower of a) CPIX, being the Consumer Price Index based on a weighted average of 12 (twelve) months, as published by Statistics SA, plus 3% b) 7%, provided that the annual escalation shall not be less than 5%. 2. Turnover rental, if applicable to a particular year, is payable by the tenant at a rate of 3.5% of net turnover 3. The weighted average lease period, calculated by GLA, within the Church Street (Pietermaritzburg) Property lease profile is 5 years. 4. The A Tenant within the Church Street (Pietermaritzburg) Property lease profile is Edgars. 5. The value of the Church Street (Pietermaritzburg) Property of R38 400 000 was arrived at by a directors` valuation as at 10 March 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. 6. Save for costs associated with the transfer of the Church Street (Pietermaritzburg) Property, which amount to R65 000, no expenditure will be incurred by the Company in connection with the Church Street (Pietermaritzburg) Acquisition. 7. CONDITION PRECEDENT The Church Street (Pietermaritzburg) Acquisition is subject the following condition precedent: a) The shareholders of R & A Admin CC passing the required resolution in terms of section 228 of the Companies Act 61 of 1973, by 17 April 2011, or the equivalent in terms of the Companies Act 71 of 2008, if applicable. 8. CATEGORISATION The Church Street (Pietermaritzburg) Acquisition is a Category 2 acquisition in terms of the Listings Requirements of the JSE Limited. THE BEAUFORT WEST PROPERTY 1. THE BEAUFORT WEST SHOPPING CENTRE ACQUISITION Linked unitholders of the Company are hereby advised that the Company has entered into an agreement with Beaufort West Shopping Centre (Proprietary) Limited to acquire the property and letting enterprise, commonly known as the Beaufort West Shopping Centre ("the Beaufort West Property"), situated on Erf 7401 Beaufort West in the Province of Western Cape ("the Beaufort West Acquisition"). The effective date of the Beaufort West Acquisition shall be the date of transfer of the Beaufort West Property into the name of the Company, which, subject to fulfilment of the conditions precedent, is expected on 1 May 2011. 2. RATIONALE FOR THE ACQUISITION The Beaufort West 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 Beaufort West Acquisition is consistent with the timelines, objectives and projections of Vividend for the 2011 financial period. 3. PURCHASE CONSIDERATION The purchase consideration for the Beaufort West Acquisition is R40 216 000 (forty million two hundred and sixteen thousand rand). R38 512 000 (thirty eight million five hundred and twelve thousand rand) is payable in cash against transfer of the Beaufort West Property into the name of the Company while the balance, being R1 704 000 (one million seven hundred and four thousand rand), is payable, subject to the result of the guarantees referred to under `Warranties` below, 36 (thirty six) months after the transfer date. 4. PRO FORMA FINANCIAL EFFECTS OF THE BEAUFORT WEST ACQUISITION The pro forma financial effects of the Beaufort West 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 BEAUFORT WEST ACQUSITION The forecast financial information relating to the Beaufort West 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 for the 4 Forecast for the 12 months ending 31 months ending 31
August 2011 August 2012 Gross Income R1,824,241 R5,618,662 Property R349,637 R1,104,855 Expenditure Net Property Income R1,474,604 R4,513,807 Property Income - - after interest and taxation Annualised Yield on 11.00% 11.22% Property Notes:
1. The forecast information for the 4 months ending 31 August 2011 has been calculated from the anticipated effective date of the Beaufort West Acquisition, being 1 May 2011. 2. Contractual income constitutes 100% of Gross Income for both the 4 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 4 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 Beaufort West Acquisition are set out below: Property name The Beaufort West Property Location Erf 7401 Beaufort West, Western Cape GLA 6,911 m2 Single or multi-tenanted Multi-tenanted retail centre A Tenant percentage by GLA 83.90% A Tenant percentage by Gross 79.78% Rentals Weighted average gross rental R63.00 per m2 Vacancy by GLA 7.86% or 543 m2 Annualised property yield 11.00% Purchase price R40,216,000 Value R40,216,000 Notes: 1. The weighted average escalation percentage, calculated by GLA, within the Beaufort West Property lease profile is 6.9%. 2. The weighted average lease period, calculated by GLA, within the Beaufort West Property lease profile is 3.97 years. 3. The A Tenants with the Beaufort West Property lease profile include the likes of Pick `n Pay, Truworths, Mr Price, Foschini and PEP. 4. The value of the Beaufort West Property of R40 216 000 was arrived at by a directors` valuation as at 10 March 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. 5. Save for costs associated with the transfer of the Beaufort West Property, which amount to R70,000, no expenditure will be incurred by the Company in connection with the Beaufort West Acquisition. 7. CONDITIONS PRECEDENT The Beaufort West Acquisition is subject the following conditions precedent: a) The satisfactory completion of a due diligence investigation performed by the Company on the Beaufort West Property and letting enterprise, by 25 April 2011; and b) The shareholders of Beaufort West Shopping Centre (Proprietary) Limited passing the required resolution in terms of section 228 of the Companies Act 61 of 1973 or the equivalent in terms of the Companies Act 71 of 2008, if applicable. The Company is entitled to waive the condition precedent set out in paragraph a) above. 8. WARRANTIES Beaufort West Shopping Centre (Proprietary) Limited has provided the Company with warranties and indemnities which are usual for a transaction of this nature, the most important of which are: a) 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 Beaufort West Property is made into the name of the Company; b) A Gross Income guarantee on any space that is vacant or that becomes vacant during the 12 (twelve) month period commencing on the first day of the 13th month succeeding the month in which the transfer of the Beaufort West Property is made into the name of the Company; and c) A Gross Income guarantee on any space that is vacant or that becomes vacant during the 12 (twelve) month period commencing on the first day of the 25th month succeeding the month in which the transfer of the Beaufort West Property is made into the name of the Company. 9. CATEGORISATION The Beaufort West Acquisition is a Category 2 acquisition in terms of the Listings Requirements of the JSE Limited. Cape Town 31 March 2011 Sponsor PSG Capital (Pty) Limited Date: 31/03/2011 16:44:01 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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