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Acquisition Of A New Property And Renewal Of Cautionary Announcement
Vividend Income Fund 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 AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
1. THE ACCESS PARK KENILWORTH ACQUISITION
1.1 Linked unitholders of the Company are hereby advised that the Company has entered into the following
agreements, which if successfully concluded will result in Vividend acquiring 90% of the Property known as
Access Park Kenilworth (“the Access Park Kenilworth Property”) situated at 81 Chichester Road, Kenilworth
Cape Town (“the Access Park Acquisition”):
• The M5 Acquisition Agreement between Vividend, Kovacs Investments 272 Proprietary Limited and
Kovacs Investments 340 Proprietary Limited; and
• The Southern Value Acquisition Agreement between Vividend, Momentum Property Investments
Proprietary Limited, Forum SA Trading 143 Proprietary Limited and Kovacs Investments 338 Proprietary
Limited.
1.2 The effective date of the Access Park Kenilworth Acquisition shall be the date of transfer of the Access Park
Kenilworth Property into the name of the Company, which, subject to fulfilment of the conditions precedent,
is expected on or about 1 May 2012.
2 THE ACCESS PARK KENILWORTH OPTION
2.1 The remaining 10% of the Access Park Kenilworth Property not held by Vividend post the Access Park
Kenilworth Acquisition is subject to separate Option Agreements, which encompass the following salient
terms:
2.1.1.1 Put Option: Forum SA Trading 143 Proprietary Limited and Kovacs Investments 272 Proprietary
Limited shall be entitled to require Vividend to acquire that portion of the Access Park
Kenilworth Property that Vividend does not own post the Access Park Kenilworth Acquisition,
being 10%, at a forward acquisition yield, as calculated at the exercise date of such Put Option,
of 8.35%. The Put Option is capable of being exercised by Forum SA Trading 143 Proprietary
Limited and Kovacs Investments 272 Proprietary Limited between 24 and 60 months from the
effective date of the Access Park Kenilworth Acquisition; and
2.1.1.2 Call Option: Vividend shall be entitled to require Forum SA Trading 143 Proprietary Limited and
Kovacs Investments 272 Proprietary Limited to sell that portion of the Access Park Kenilworth
Property that Vividend does not already own post the Access Park Kenilworth Acquisition, being
10%, to Vividend at a forward acquisition yield, as calculated at the exercise date of such Call
Option, of 8.00%. The Call Option is capable of being exercised by Vividend between 0 and 60
months from the effective date of the Access Park Kenilworth Acquisition.
2. RATIONALE FOR THE ACQUISITION
2.1 The Access Park Kenilworth Acquisition is consistent with the Company’s strategy of identifying and acquiring
properties that provide sustainable value enhancement to Linked Unitholders from the effective date of their
acquisition.
2.2 The Access Park Kenilworth Acquisition introduces a globally unique high-quality, well established, defensive
and historically resilient property, both in terms of income growth and tenant demand, to the Property
Portfolio of Vividend
2.3 From the Effective Date of the Access Park Kenilworth Acquisition Vividend will retain the expertise and
management skill of the founding vendor via the remaining 10% of the Access Park Kenilworth Property not
acquired by Vividend.
2.4 The Access Park Kenilworth Acquisition, while dilutionary in terms of Linked Unit distributions post the
acquisition, provides defensive and resilient longevity and growth potential to the Company’s earnings,
which is considered appropriate in the current economic climate.
3. PURCHASE CONSIDERATION
3.1 The purchase consideration applicable to the Access Park Kenilworth Acquisition is R483,381,862, escalating
at R158,920 per day from 1 July 2013, payable in cash against transfer of the Access Park Kenilworth Property
into the name of the Company.
3.2 The Company will fund the purchase consideration via a combination of a) debt secured from local banking
partners b) a partially (54.1%) underwritten renounceable claw-back rights offer, in terms of which 99 817
808 new Linked Units will be offered to Linked Unitholders recorded in the register at the applicable record
date to be determined (“the Claw-back Rights Offer”), at a subscription price of 540 cents per Claw-back
Rights Offer Linked Unit, in the ratio of 52.24 Claw-back Rights Offer Linked Units for every 100 Linked Units
held at the close of trade on the applicable record date to be determined.
3.3 The full details of the Claw-back Rights Offer will be announced on SENS and set out in a separate circular to
be sent to Linked Unitholders in due course.
4. THE ACCESS PARK KENILWORTH PROPERTY
Details of the Access Park Kenilworth Property, as at the expected effective date, are as follows:
Property Name Geographical Sector Cost (Rand) GLA (m2) Cost per Average
and Address Location GLA Gross
(Rand) Rental per
m2 per
month
(Rand)
Access Park Value Western Cape Retail R483,381,862 18,995 R25,447 R158
Centre, 81
Chichester Road,
Kenilworth Cape
Town
5. PROPERTY SPECIFIC INFORMATION
Details regarding the Access Park Kenilworth Acquisition, as at the expected effective date, are set out below:
Property Name Purchase Average Lease Vacancy by Property Value per
and Address Yield Escalation (%) Duration GLA (%) Value GLA (Rand)
attributable (years) (Rand)
to Linked
Unitholders
(%)
Access Park 8.6% 10% 2.1 0% 477,000,000 R25,112
Value Centre,
81 Chichester
Road,
Kenilworth
Cape Town
Notes:
a) The Purchase Yield attributable to Linked Unitholders assumes a 40% Loan to Value (LTV) gearing
limit with an annual interest cost of 8.0%, which is the current indicative cost available to the
Company from its local banking partners.
b) National and anchor tenants with low levels of default risk (‘A Type’ Tenants) constitute 20% of the
GLA and 14% of the Gross Rentals within the Access Park Kenilworth Property.
c) Save for costs associated with the transfer of the Access Park Kenilworth Property, which are
estimated at R1,500,000, no expenditure will be incurred by the Company in connection with the
Access Park Kenilworth Acquisition.
d) The value of the Access Park Kenilworth Property of R477 000 000 was arrived at by P Burmeister of
Active Blue Valuation Services cc as at 13 February 2013. P Burmeister is an independent valuer and
is registered as a professional associate valuer in terms of the Property Valuers Profession Act, No
47 of 2000.
6. CONDITIONS PRECEDENT
The Access Park Kenilworth Acquisition is subject the following material conditions precedent:
a) The satisfactory completion of a due diligence investigation, to be performed by the Company on the Access
Park Property and associated letting enterprise by 22 March 2013;
b) The Company obtaining the appropriate irrevocable funding commitments from existing and/or new debt
funders, in relation to the Access Park Kenilworth Acquisition, by 12 April 2013;
c) The Company obtaining the appropriate irrevocable undertakings to subscribe for additional equity from new
and/or existing Linked Unitholders by 12 April 2013;
d) Competition Commission approval, in terms of the Competition Act 89 of 1998 by 30 April 2013;
e) Linked Unitholder approval of a) the Access Park Acquisition b) the issue of any Linked Units required to
conclude the Access Park Kenilworth Acquisition, in terms of the JSE Listing Requirements, by 30 April 2013;
and
f) The South African Revenue Service (SARS) issuing a binding directive by 30 April 2013 to the effect that either
a) any transfer duty payable by the Company in respect of the Access Park Kenilworth Acquisition shall be
entitled to be reclaimed as notional input tax for VAT purposes, thereby enabling the Company to obtain a
refund of the entire amount of transfer duty paid by it b) VAT is payable in respect of the Access Park
Kenilworth Acquisition at a rate of 0%.
The Company is entitled to waive the conditions precedent set out in paragraphs a), b), c) and f) above.
7. WARRANTIES
Kovacs Investments 272 Proprietary Limited, Kovacs Investments 340 Proprietary Limited, Momentum Property
Investments Proprietary Limited, Forum SA Trading 143 Proprietary Limited and Kovacs Investments 338
Proprietary Limited have each provided warranties and indemnities to the Company that are standard to a
transaction of this nature.
8. PRO FORMA FINANCIAL EFFECTS OF THE ACCESS PARK KENILWORTH ACQUISITION
The pro forma financial information in relation to the Access Park Kenilworth Acquisition is still in the process of
being finalised and will be published in due course.
9. FORECAST FINANCIAL INFORMATION OF THE ACCESS PARK KENILWORTH ACQUISITION
The forecast financial information in relation to the Access Park Kenilworth Acquisition is still in the process of
being finalised and will be published in due course.
10. CATEGORISATION
The Access Park Kenilworth Acquisition is a Category 1 acquisition in terms of the Listings Requirements of the JSE
Limited requiring Linked Unitholder approval. Accordingly, a circular detailing the terms of the acquisition and
convening a general meeting will be posted to Linked Unitholders in due course.
11. RENEWAL OF CAUTIONARY ANNOUNCEMENT
Linked Unitholders are referred to the cautionary announcement dated 6 February 2013 and are hereby advised
to continue exercising caution when dealing in the Company’s securities until a full announcement regarding the
pro forma financial effects and the forecast financial information in relation to the Access Park Kenilworth
Acquisition is made.
1 March 2013
Cape Town
Sponsor
PSG Capital (Pty) Limited
Date: 01/03/2013 02:00:00 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
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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,
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