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Acquisition by VPIF of Wellington Road
VUNANI PROPERTY INVESTMENT FUND LIMITED
Granted REIT status by the JSE
(Registration number: 2005/019302/06)
ISIN: ZAE000157459
JSE code: VPF
(“VPIF” or “the Company”)
ACQUISITION BY VPIF OF WELLINGTON ROAD
1. INTRODUCTION
Unitholders are advised that VPIF has entered into a Sale of Rental Enterprise
Agreement with Magakabye Property Services Proprietary Limited (“the vendor”), in
terms of which VPIF will acquire the rental enterprise conducted as a going concern
on Erf 566, Portion 1 of Erf 567, Remainder Erf 567, Portion 1 of Erf 568 and
Remainder of Erf 568 Parktown, Registration Division I.R., Province of Gauteng,
measuring 12,140 square metres collectively (“the property” and “the transaction”)
known as Wellington Road.
The agreement contains warranties normal for an acquisition of this nature.
2. INFORMATION RELATING TO THE PROPERTY
Description of the Erf 566, Parktown, Registration Division I.R.,
property: Province of Gauteng, measuring 4,064 square
metres;
Portion 1 of Erf 567, Parktown, Registration Division
I.R., Province of Gauteng, measuring 243 square
metres;
Remainder Erf 567, Parktown, Registration Division
I.R., Province of Gauteng, mmeasuring 3,793 square
metres;
Portion 1 of Erf 568, Parktown, Registration Division
I.R., Province of Gauteng, mmeasuring 308 square
metres;
Remainder Erf 568, Parktown, Registration Division
I.R., Province of Gauteng, mmeasuring 3,732 square
metres.
Location: 30-32 Wellington Road, Parktown, Gauteng
GLA: 10 018 square metres, comprises 100% offices and
334 parking days.
Leases: The premises are occupied by Transnet Limited with
10,018 square metres expiring on 30 June 2015.
Weighted average rental: R107.82 per square metre (net)
Purchase price and other The purchase price of the property is set out in
costs: paragraph 4 below. The following other expenditure
will be incurred in respect of the property:
Agent’s commission is payable by the vendor.
All costs incidental to the transfer of the property –
approximately R400 000.
Independent valuation: No independent valuation has been carried out and
the board of VPIF is of the view that the purchase
price of R 102 500 000 represents the fair value of
the immovable property as at the effective date.
3. RATIONALE FOR THE TRANSACTION
VPIF was listed on the JSE Limited (“JSE”) on 11 August 2011. The main purpose of
the listing was to provide VPIF with a platform for acquisitive growth and this
transaction is a step towards VPIF’s stated intention to grow the portfolio by the
acquisition of high quality yield-enhancing properties. Following the acquisition,
Wellington Road will be upgraded and will then give an anticipated yield of 10.5%.
4. PURCHASE CONSIDERATION
A cash purchase price of R102 500 000, which will be funded by debt, is payable by
VPIF to the vendors, which amount includes VAT levied at the rate of 0% in terms of
section 11(1)(e) of the VAT Act.
5. EFFECTIVE DATE
The effective date of the transaction will be the date of registration of transfer of
ownership of the property which is expected to be 28 February 2014.
6. CONDITIONS PRECEDENT
The transaction is conditional upon Competition Commission approval and the
transfer of the property.
7. PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTION
The pro forma financial effects of the transaction on net asset value and net tangible
asset value per linked unit are not significant and have therefore not been disclosed.
8. FORECAST INFORMATION RELATING TO THE TRANSACTION
The forecast financial information relating to the transaction for the financial periods
ending 30 June 2014 and 30 June 2015 is set out below. The forecast financial
information has not been reviewed or reported on by a reporting accountant in terms
of section 8 of the Listings Requirements of the JSE and is the responsibility of the
company’s directors.
Forecast for the Forecast for the
4 months ending 12 months ending
30 June 2014 30 June 2015
R’000 R’000
Investment property income 4 939 15 888
Straight-line rental adjustment 217 (205)
Revenue 5 156 15 683
Property expenditure (1 705) (4 129)
Net property income 3 451 11 554
Other operating expenditure (171) (513)
Operating profit 3 280 11 041
Finance costs (2 347) (7 021)
Debenture interest (716) (4 225)
Profit before income tax 217 (205)
Income tax - -
Profit for the year 217 (205)
Forecast for the Forecast for the
4 months ending 12 months ending
30 June 2014 30 June 2015
R’000 R’000
Reconciliation of profit for the year to
distributable income:
Profit for the year 217 (205)
Debenture interest 716 4 225
Straight-line rental adjustment (217) 205
Income tax - -
Distributable income 716 4 225
Notes:
1. The forecast financial information has been provided from the expected date
of transfer being 28 February 2014.
2. Gross income includes rental income and all tenant recoveries while Property
expenditure includes all consumption expenditure as well as property
management fees.
3. Other operating expenditure consists of asset management fees.
4. VPIF will raise debt to fund the transaction and therefore 100% of the debt for
the transaction has been attributed to this transaction.
5. The debenture interest has been calculated in accordance with the provisions
of the Debenture Trust Deed.
9. CLASSIFICATION OF THE TRANSACTION
The transaction is classified as a Category 2 transaction in terms of the Listing
Requirements of the JSE.
Sandton
5 December 2013
Sponsor
Grindrod Bank Limited
Date: 05/12/2013 09:23:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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