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SAC - SA Corporate - Announcement regarding the disposal of 7
properties by SA Corporate To Synergy Income Fund Limited
SA Corporate Real Estate Fund
(Incorporated in the Republic of South Africa)
A Collective Investment Scheme in property registered in terms of the
Collective
Investment Schemes Control Act, No. 45 of 2002 and managed by SA
Corporate
Real Estate Fund Managers Limited (Registration number 1994/009895/06)
Share Code: SAC ISIN Code: ZAE000083614
("SA Corporate" or "the Fund")
ANNOUNCEMENT REGARDING THE DISPOSAL OF 7 PROPERTIES BY SA CORPORATE TO
SYNERGY INCOME FUND LIMITED ("SYNERGY INCOME FUND" OR "THE PURCHASER")
1. Introduction
SA Corporate unitholders are advised that SA Corporate has entered into
various heads of agreements ("the Agreements") with Synergy Income Fund
for the disposal of seven investment properties ("the Properties") from
various entities within the SA Corporate group to Synergy Income Fund
("the Disposal") as detailed below:
1.1 a heads of agreement for the disposal of the property known
as "Renbro Shopping Centre", situated at Old Warmbaths Road,
Hammanskraal, Pretoria for a disposal consideration of R107
million;
1.2 a heads of agreement for the disposal of the property known
as "Highland Mews", situated at corner Watermeyer and Hans
Strydom Drive, Witbank for a disposal consideration of R130
million;
1.3 a heads of agreement for the disposal of the property known
as "Ermelo Game Centre" situated at corner De Emigrate Road
and Voortrekker Avenue, Ermelo for a disposal consideration
of R26 million;
1.4 a heads of agreement for the disposal of the property known
as "Van Riebeeckshof", situated at corner Van Riebeeckshof,
Koelenhof and Delaire Roads, Belville for a disposal
consideration of R38 million;
1.5 a heads of agreement for the disposal of the property known
as "The Village Centre", situated at 56 - 61 Old Main Road,
Hillcrest for a disposal consideration of R79.6 million;
1.6 a heads of agreement for the disposal of the property known
as "Hubyeni Shopping Centre", situated at corner R578 and
R528, Elim for a disposal consideration of R80.8 million; and
1.7 a heads of agreement for the disposal of the property known
as "Nzhelele Shopping Centre", situated at R523, Makhado for
a disposal consideration of R30.6 million.
The effective date of the Disposal ("the Effective Date") will be
the first business day after the fulfilment or waiver (as the case
may be) of the last of the conditions precedent as set out in
paragraph 4 below and is anticipated to be 31 March 2012.
2. Rationale for the Disposal
The Disposal is in line with SA Corporate`s strategy to invest in
large high quality properties that offer a low risk profile that
will support sustainable long-term distribution growth.
3. Consideration for the Disposal
The total consideration for the Disposal is R492 million ("the
Consideration"), payable by Synergy Investment Fund in cash on the
transfer date, which is expected to be on or about 31 March 2012.
In the medium-term, the Consideration will be used by SA Corporate
to invest in high quality investment properties and to reinvest
into certain existing assets for upgrades and tenant driven
expansions. In the interim, the Consideration will be invested to
reduce interest-bearing borrowings.
4. Conditions precedent
The Disposal is subject to:
4.1 within a period of 35 days from the date of signature of the
agreement, in respect of Ermelo Game Centre, SA Corporate
confirms in writing to Synergy Income Fund that any pre-
emptive rights in respect of the Ermelo Game Centre have been
waived, including details of the rights waived, or, if
applicable that the consent required from such rights holder
has been obtained for the Disposal. If the pre-emptive right
is not waived, then the Ermelo Game Centre will be omitted
from the Disposal, and the Consideration reduced
proportionately;
4.2 within a period of 21 days from the date of signature of the
agreement, in respect of the Spar at Renbro Shopping Centre,
SA Corporate confirms in writing to Synergy Income Fund that
any pre-emptive rights in respect of the Spar at Renbro
Shopping Centre have been waived, including details of the
rights waived, or, if applicable, that the consent required
from such rights holder has been obtained for the Disposal.
If the pre-emptive right is not waived, then the Renbro
Shopping Centre will be omitted from the Disposal, and the
Consideration reduced proportionately;
4.3 by no later than 20 February 2012, the Competition
Authorities approve the Disposal unconditionally or upon
conditions acceptable to SA Corporate and Synergy Income Fund
("the Parties"), in terms of the Competition Act, evidenced
by the issue of a merger clearance certificate;
4.4 within a period of 14 days from the date on which the
Competition Authorities approve the Disposal, Synergy Income
Fund furnishes SA Corporate with written proof that the
Purchaser has raised the necessary funding in respect of
Renbro Shopping Centre, Highland Mews, Ermelo Game Centre and
Van Riebeeckshof;
4.5 SA Corporate procures the written consent of the Minister for
Land Affairs ("the Minister") by 20 January 2012 to the sale
and transfer of Hubyeni Shopping Centre to Synergy Income
Fund and the Minister waives the right to purchase Hubyeni
Shopping Centre. This period may be extended by agreement
between the Parties; and
4.6 Synergy Income Fund confirming in writing by 20 January 2012
that they are prepared to take transfer of The Village
Centre, having satisfied themselves with any outstanding
requirements of the local authority in relation to the
approval of the as-built plans and the issue of occupancy
certificate.
Should any of the conditions precedent not be fulfilled within the
stipulated time periods, the Agreements shall lapse and be of no
further force or effect, unless the Parties have agreed in writing
to an extension of the stipulated time periods or variation
thereto.
5. Unaudited pro forma financial effects of the Disposal
Based on SA Corporate`s condensed consolidated unaudited interim
financial statements for the six months ended 30 June 2011, the
financial effects of the Disposal on SA Corporate`s net asset
value per unit and net tangible asset value per unit have not been
disclosed as these are not significant.
6. Forecast information on the Properties
The summarised forecast financial information relating to the
Properties for the 9 months ending 31 December 2012 and for the
twelve months ending 31 December 2013, which is the responsibility
of SA Corporate`s directors, is set out below. The forecast
financial information has not been reviewed and reported on by the
Fund`s auditors.
Forecast Forecast
9 months 12 months
ending ending
31 December 31 December
2012 2013
R`000 R`000
Gross rentals 65 933 95 617
Contracted revenue 65 933 95 617
Uncontracted revenue 0 0
Net rental income before 35 257 51 801
interest
Net rental income after 35 257 51 801
interest and taxation
Notes:
1. The forecast information for the 9 months ending 31 December 2012
has been calculated from the Effective Date.
7. Specific information relating to the Properties
Details of the Properties are as follows:
Property Location Sector GLA Weighted Vacancy Selling Value(1
m2 average by price )
rental rentable Rm Rm
per m2 area
m2
Renbro Erf 410 Retail 17 87 493 107.0 101.7
Shopping Hammanskraal 521
Centre Extension 1
Highland Erf 1522 Del Retail 17 73 1 263 130.0 142.8
Mews Judor 165
Extension 16
Ermelo Game Erf 9392 Retail 5 76 1 178 26.0 27.4
Centre Ernelo 735
Extension
12, Portion
2 of Erf
3776
Extension 14
and Portion
223 (a
Portion of
Portion 89)
of the Farm
Nooitgedacht
268
Van Erf 37821 Retail 5 77 251 38.0 35.8
Riebeeckshof and 37826, 067
Bellville
The Village Remainder of Retail 10 78 974 79.6 79.2
Centre Portion 48 203
(of 6) of
the Farm
Albinia no.
957, Portion
431 of the
Farm Albinia
no. 957,
Portion 450
(of 74) of
the Farm
Albinia no.
957 and
Portion 524
(of 433) of
the Farm
Albinia no.
957
Hubyeni Erf 3, Elim Retail 12 62 621 80.8 80.4
Shopping 866
Centre
Nzhelele Erf 3013 Retail 5 67 1 481 30.6 30.4
Valley Makhado 539
Shopping
Centre
Total 74 76 6 261 492.0 497.7
096
Notes:
1. The value of the Properties of R497.7 million was arrived at by
the independent external property valuers, African Corporate Real
Estate Solutions (Proprietary) Limited as at 30 June 2011.
2. The Properties are being sold at a weighted average aggregate exit
yield of 9.7%.
8. Categorisation
The Disposal constitutes a Category 2 transaction in terms of the
JSE Limited Listings Requirements.
10 November 2011
Cape Town
Investment bank and sponsor
Nedbank Capital
Date: 10/11/2011 11:02:22 Supplied by www.sharenet.co.za
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