Disposal by Sycom of the Discovery Building
SYCOM PROPERTY FUND
A Collective Investment Scheme in Property ("CISP") registered in terms of the Collective Investment
Schemes Control Act, No. 45 of 2002 and managed by Sycom Property Fund Managers Limited
(Registration number 1986/002756/06)
JSE Share code: SYC
("Sycom” or the “Fund”)
(Granted REIT status by the JSE, effective 1 April 2013)
DISPOSAL BY SYCOM OF THE DISCOVERY BUILDING
Sycom has entered into a sale agreement to dispose of the Discovery Building (the “Property”) to
The Truzen 113 Trust (c/o Zenprop Property Holdings) (the “Purchaser”) for an amount of R413.9
million (the “Disposal”).
RATIONALE FOR THE DISPOSAL
The Property has a single tenant, Discovery Health (Pty) Ltd („Discovery”). In a Request for
Information (“RFI”) issued on 26 June 2012, Discovery indicated that its future needs for office space
would be significantly greater than the area currently occupied in the Property, together with its
adjoining buildings. Given the risk of Discovery vacating the Property at the end of their current lease
in March 2016, Sycom entered into discussions with Zenprop regarding the potential redevelopment
of the Property, along with certain of its adjoining buildings, in response to the RFI. For a number of
reasons, it was not feasible for Sycom and Zenprop to participate in the RFI as joint venture partners,
and Sycom therefore resolved to dispose of the Property to the Purchaser in order to mitigate the risk
of a substantial vacancy in the 2016 financial year, as well as the risk associated with redeveloping
and re-tenanting the Property in an uncertain office market.
DETAILS OF THE DISPOSAL
The sale consideration in respect of the Disposal is R413.9 million (the “sale consideration”),
payable by the Purchaser in cash on transfer.
The proceeds of the Disposal will be utilised to fund future developments and acquisitions.
Specific information relation to the Property
Details regarding the Property are set out below:
Property Discovery Building
Erf 606 Sandown Extension 47. Approximately 1.1732
Property description/location (one point one seven three two) hectares
(1)Gross lettable area 22 526 m2
Single or multi tenanted Single tenanted
(2)Weighted average gross rental per m2 R141.96 (including parking)
Sale consideration R413 900 000
(3;4) Value R408 000 000
1. 100% let;
2. Based on gross contracted rental income for the 12 month period from the anticipated date of
3. The Property was valued on 31 March 2013 by an independent valuer, Peter Parfitt from
Quadrant Properties Proprietary Limited; and
4. Agents commission of R2 069 500 is payable by Sycom on transfer.
Effective Date of the Disposal
The effective date of the Disposal will be the date of transfer of the Property to the Purchaser,
currently estimated to be 1 February 2014.
The Disposal is subject to the approval from the Competition Authorities.
Other than as disclosed in this announcement, there are no other significant terms to the Disposal.
PRO FORMA FINANCIAL EFFECTS OF THE DISPOSAL
The Disposal has no material impact (less than 3%) on either the earnings, distribution or net asset
value per Sycom unit as a result of the Disposal and, as such, no pro forma financial effects are
required to be disclosed.
In terms of section 9 the Listings Requirements of the JSE Limited, the Disposal is categorised as a
category 2 transaction.
12 September 2013
Absa Bank Limited (acting through its Corporate and Investment Banking Division)
Date: 12/09/2013 11:22:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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