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DELTA PROPERTY FUND LIMITED - The Acquisition of Harlequins Office Park from Atterbury

Release Date: 23/08/2013 13:15
Code(s): DLT     PDF:  
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The Acquisition of Harlequins Office Park from Atterbury

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" or “the Company”)




ANNOUNCEMENT REGARDING THE ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL OF ATTERBURY PARKDEV CONSORTIUM
PROPRIETARY LIMITED

1.    Introduction

      Delta linked unitholders are advised that Delta has entered into a sale and subscription agreement with Atterbury Investment Holdings Limited
      (“AIH”) to acquire the entire issued share capital of Atterbury Parkdev Consortium Proprietary Limited (“sold shares”) (“the acquisition”), which is
      the owner of the property and letting enterprise commonly known as "Harlequins Office Park", situated at 606 Toitus Street, Groenkloof, Pretoria
      (‘the property”).

      The effective date of the acquisition was 1 July 2013, on which date all income attributable to the property accrued to Delta.

2.    Rationale for the acquisition

      In line with Delta’s strategy of actively pursuing investment opportunities that will enhance the overall quality and value of its portfolio, the
      acquisition represents an attractive investment to Delta linked unitholders by introducing a well-established property with low risk tenants.
      Included in the acquisition of the property, there is additional available bulk adjacent to the building for future development.

3.    Consideration for the acquisition

      The purchase consideration for the acquisition is R136 000 000 (one hundred and thirty six million Rand), which will be settled with a combination
      of cash and shares as set out below:

      -       R95 200 000 will be settled in cash through new debt facilities and existing equity; and

      -       R40 800 000 will be settled by the issue of 4 883 469 Delta linked units (“the consideration units”).

          The consideration units will be allotted and issued to AIH as settlement for the sold shares by no later than Wednesday, 28 August 2013.
                                                                                                                                                   2
4.   Conditions precedent

     All of the conditions precedent to the acquisition have been fulfilled.

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 forecasts have been prepared on the assumption that the acquisition will be implemented with effect from 1 July 2013 and include forecast
     results for the 8 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 IFRS.

     Summarised forecast in respect of the property:

                                                                                 Forecast     Forecast
                                                                                 8 months    12 months
                                                                                   ending       ending
                                                                               28 February          28
                                                                                      2014    February
                                                                                                  2015
                                                                                    R’000        R’000
          Rental income                                                             10,549       16,978
          Straight-line rental income accrual                                          361           37
          Total revenue                                                             10,910       17,015
          Net operating profit before finance charges                                7,877       12,289
          Net operating profit after finance charges                                 2,846        4,790
          Net profit after tax                                                         278           61
          Distributable earnings attributable to linked unitholders                  2,460        4,705
                                                                                                                                                                            3
                        Contracted revenue is based on existing lease agreements. Uncontracted revenue in respect of this portfolio amounts to 0% and 42% for the
                        years ending 28 February 2014 and 2015, respectively.

                        Net operating profit after finance charges includes both asset management fees and property management fees.

 7.     Specific information relating to the property

        Details regarding the property are set out below:

                                                                                                                                                                                     (2) (3)
Property    Property                     Sector      Gross lettable area     Single or multi tenanted   Weighted average net        Annualised      Purchase price R         Value
                                                                                                                            
            description/ location                                    m2
                                                                                                             rental per m² (1)      property yield(3)
                                                                                                                                                                                      R
                                                                                                                             R




Harlequins
Office      Erf 606, Groenkloof,        Office-
    Park                Guateng     Government                     5,428                        Multi                   161.68           9.18%           136 000 000       137 163 057




                        Notes:
                      1. Based on net rental income for the 12 month period from the anticipated date of transfer, assuming the property is fully let.
                      2. No independent valuation has been carried out and the value of the property of R137 163 057 (one hundred and thirty seven million, one
                         hundred and sixty three thousand and fifty seven Rand), was arrived at by Delta’s management company, MPI Property Asset Management
                         Proprietary Limited.
                      3. After taking into account acquisition costs of R1 163 057 (one million one hundred and sixty three thousand and fifty seven Rand).


 8.     Categorisation

         The acquisition is a Category 2 transaction in terms of the JSE Limited Listings Requirements due to the aggregation of the acquisition with the
         acquisition of the rental enterprise commonly known as “Block G”, which was acquired with effect from 02 November 2012.




 23 August 2013
 Johannesburg




Investment bank and sponsor
Nedbank Capital

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