SYCOM PROPERTY FUND - Disposal by Sycom of the Discovery Building

Release Date: 12/09/2013 11:22
Code(s): SYC
Wrap Text
Disposal by Sycom of the Discovery Building

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
ISIN: ZAE000019303
("Sycom” or the “Fund”)
(Granted REIT status by the JSE, effective 1 April 2013)



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”).


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.


Sale consideration
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
Sector                                      Office
(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.


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.

Cape Town
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'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
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,
 information disseminated through SENS.

Email this JSE Sens Item to a Friend.

Share This Story