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DELTA PROPERTY FUND LIMITED - Announcement regarding the acquisition of SARS Bellville

Release Date: 06/06/2013 12:30
Code(s): DLT     PDF:  
Wrap Text
Announcement regarding the acquisition of SARS Bellville

Delta Property Fund Limited
(formerly Tuffsan 89 Investment Holdings Proprietary Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2002/005129/06)
Share code: DLT ISIN: ZAE000172052
("Delta")


ANNOUNCEMENT REGARDING THE ACQUISITION OF SARS BELLVILLE


1.   Introduction

     Delta linked unitholders are advised that Delta ("the purchaser") has entered into an agreement
     with Schaeffer Technologies Trust for the purchase of the property and letting enterprise
     commonly known as "SARS Bellville" (“the property”), situated at the corner of Teddington and
     De Lange Road, Bellville, Cape Town, Western Cape (“the acquisition”). The property is a multi-
     tenanted office building occupied primarily by the South African Revenue Services (“SARS”).

     The effective date of the acquisition will be the date of registration of transfer of the property into
     the name of Delta, which is expected to be 1 July 2013.

2.   Rationale for the acquisition

     In line with Delta’s strategy around SARS, this acquisition, being a well-established property
     with a low risk tenant, represents an attractive investment that will enhance the overall quality
     and value of the portfolio. There is currently a negotiated three year letter of intent in place with
     SARS which Delta intends to convert to a lease once transfer has taken place.


3.   Consideration for the acquisition

     The purchase consideration for the acquisition is R185 000 000 (one hundred and eighty five
     million Rand) ("the purchase price"). The purchase price will be settled in cash upon registration
     of transfer of the property into the name of Delta, and will be financed through a combination of
     debt financing and existing equity.

4.   Conditions precedent

     The acquisition is subject to the purchaser being satisfied in its sole discretion with the results of
     a comprehensive due diligence of the acquisition.

5.   Unaudited pro forma financial effects of the acquisition

     The unaudited pro forma financial effects of the acquisition on the net asset value and net
     tangible asset value per Delta linked unit have not been disclosed as they are not significant.

6.   Forecast information on the property

     The summarised forecast financial information of the property for the 8 months ending 28
     February 2014 and for the twelve months ending 28 February 2015 is set out below. The
     forecast financial information, including the assumptions on which it is based, is the
     responsibility of the directors of Delta. The forecast financial information has not been reviewed
     or reported on by independent reporting accountants.
                                                                                                                                                                                                                      Forecast                      Forecast
                                                                                8 months ending                12 months ending
                                                                               28 February 2014                28 February 2015
                                                                                          R’000                           R’000

        Rental income                                                                 12,742,947                     20,339,191
        Straight-line rental income accrual                                               12,850                         (9,889)
        Total revenue                                                                 12,755,796                     20,329,301
        Net operating profit                                                           6,753,211                     11,173,221
        Net profit after tax                                                              57,782                         73,398
        Distributable earnings attributable to linked
        unitholders                                                                     6,672,958                    11,071,279

       Notes:

       1. The forecast information for the 8 months ending 28 February 2014 has been calculated from the anticipated effective
            date of the acquisition of 1 July 2013.

       2. Contracted rental income for the 8 months to 28 February 2014 constitutes 4% of forecast gross rental income and
            2% of forecast gross rental income for the 12 months to 28 February 2015.


7.     Specific information relating to the property

       Details regarding the property are set out below:



Property                      Location                Sector     Gross    Single or      Weighted           Total         Value
                                                               lettable       multi       average       purchase            R (3)
                                                                   area   tenanted          rental        price(2)
                                                                     m2                   per m2(1)            R
                                                                                                R
                            Cape Town,
                               Western
SARS Bellville                    Cape      Office - other      17,270        Multi           87.58   185,631,000    185,631,000


       Notes:
       1.     Based on office rental income for the period 1 July 2013 to 28 February 2014.
       2.     Includes capitalised costs of R631 000.
       3.     The value of the property was arrived at by a directors’ valuation as at 1 June 2013.


8.     Categorisation

       The acquisition is a Category 2 transaction in terms of the JSE Limited Listings Requirements.




06 June 2013

Johannesburg




Investment bank and sponsor
Nedbank Capital

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