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Acquisition of Letting Enterprises and Properties
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 LETTING ENTERPRISES AND
PROPERTIES
1. Introduction
Delta linked unitholders are advised that Delta ("the Purchaser"), has entered into an agreement
with the owners of Phamog Properties Proprietary Limited (“Phamog”) for the purchase of the
entire issued share capital of Phamog ("the Acquisition"). Phamog is the owner of the following
property and letting enterprises commonly known as:
1. "Phamoko Towers", situated at 37 Church Street, Polokwane, Limpopo; and
2. "Temo Towers", situated at 67 Biccard Street, Polokwane, Limpopo;
(collectively “the Properties”)
Pursuant to the Acquisition, the Properties will be transferred to Delta.
The effective date of the Acquisition will be the date of fulfilment of the conditions precedent as
set out in paragraph 5 below, which is expected to be on or about 1 September 2013.
2. Rationale for the Acquisition
In line with Delta’s strategy, the Acquisition, comprising well-established A grade properties with
low risk tenants, represents attractive investments that will enhance the overall quality and value
of Delta’s property portfolio.
3. Consideration for the Acquisition
The total purchase consideration for the Acquisition is R377,500,000 (three hundred and
seventy seven million five hundred thousand Rand) ("the Purchase Price").
The Purchase Price is based on the following underlying property prices:
1. Phamoko Towers – R241,750,000 (two hundred and forty one million seven hundred
and fifty thousand Rand); and
2. Temo Towers – R135,750,000 (one hundred and thirty five million seven hundred and
fifty thousand Rand)
The Purchase Price excludes costs in the amount of R12,148,805 (twelve million one hundred
and forty eight thousand, eight hundred and five Rand).
The Purchase Price will be settled in cash upon transfer of the entire share capital of Phamog
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, inter alia, the fulfilment or waiver of the following suspensive
condition:
4.1 Delta providing written confirmation of a letter of finance and or confirmation that it has
arranged for sufficient equity on such terms and conditions as are acceptable to the
respective vendors.
5. Unaudited pro forma financial effects of the Acquisition
The unaudited pro forma financial effects of the Acquisition on net asset value and net tangible
asset value per unit have not been disclosed as they are not significant.
6. Forecast information on the Properties
The summarised forecast information on the Properties (“the forecasts”) have been prepared on
the assumption that the Acquisition will be implemented on 1 September 2013 and include
forecast results for the 6 months ending 28 February 2014 and the year ending 28 February
2015.
The forecasts, including the assumptions on which they are based and the financial information
from which they are prepared, are the responsibility of the board of directors of Delta. The
forecasts have not been reviewed or reported on by the independent reporting accountants.
The forecasts presented in the tables below have been prepared in accordance with Delta’s
accounting policies and in compliance with International Financial Reporting Standards.
Summarised forecast in respect of Phamoko Towers:
Forecast Forecast
6 months 12 months
ending ending
28 February 28
2014 February
R’000 2015
R’000
Rental income 12,511,467 27,265,615
Straight-line rental income accrual 3,335,358 4,503,100
Total revenue 15,846,825 31,768,715
Net operating profit before finance charges 14,195,307 28,309,203
Net operating profit after finance charges 4,415,487 8,900,491
Net profit after tax 2,409,235 3,273,893
Distributable earnings attributable to linked unitholders 1,069,328 4,353,417
Contracted revenue is based on existing lease agreements. 100% of the revenue for this
property is contracted.
Summarised forecast in respect of Temo Towers:
Forecast Forecast
6 months 12 months
ending ending
28 February 28
2014 February
R’000 2015
R’000
Rental income 7,805,641 16,659,117
Straight-line rental income accrual 934,962 597,456
Total revenue 8,740,603 17,256,573
Net operating profit before finance charges 7,594,310 14,865,970
Net operating profit after finance charges 2,098,924 3,960,005
Net profit after tax 681,553 454,379
Distributable earnings attributable to linked unitholders 1,152,322 3,328,923
Contracted revenue is based on existing lease agreements. 100% of the revenue for this
property is contracted.
7. Specific information relating to the Properties
Details regarding the Properties are set out below:
Properties Property Sector Gross Single or Weighted Annualised Purchase price Value(2) (3)
description/ lettable area multi average property R
R
location m2 tenanted net rental yield (3)
per m² (1)
R
Erf 60,
Phamoko Polokwane, Office
Towers Limpopo government 13 058 Single 139.86 9.00% 241,750,000 140,179,493
Erf 1002,
Polokwane, Office
Temo Towers Limpopo government 7 668 Single 159.06 9.70% 135,750,000 249,469,312
Total 377,500,000 389,648,805
Notes:
1. Based on net rental income for the 12 month period from the anticipated date of transfer,
assuming the Properties are fully let.
2. No independent valuation has been carried out and the value of the Properties of
R377,500,000 (three hundred and seventy seven million five hundred thousand Rand), was
arrived at by Delta’s management company, MPI Property Asset Management Proprietary
Limited.
3. After taking into account commission and other costs of R12,148,805 (twelve million one
hundred and forty eight thousand, eight hundred and five Rand).
8. Categorisation
The Acquisition is a Category 2 transaction in terms of the JSE Limited Listings Requirements.
31 July 2013
Johannesburg
Investment bank and sponsor
Nedbank Capital
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