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Acquisition of Tembisa Mega Mart and Cautionary Announcement
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”)
REIT status approved
ANNOUNCEMENT REGARDING THE ACQUISITION OF TEMBISA MEGA MART AND CAUTIONARY
ANNOUNCEMENT
1. Introduction
Holders of Delta linked units (“Delta Linked Unitholders”) are advised that Delta has
concluded an agreement for the acquisition of the turnkey development of the letting
enterprise and property commonly known as Tembisa Mega Mart (“the Property
Development”) from Realty Dynamix 107 (Pty) Ltd (“the Seller”) (“the Acquisition”).
2. Rationale for the Acquisition
The Property Development, which comprises a neighbourhood shopping centre located in
Tembisa, presents an attractive investment to Delta Linked Unitholders as it:
- is tenanted with c.81% national tenants including inter alia Pick ‘n Pay, Pep and
Buildrite;
- provides Delta with diversification in terms of sectoral spread; and
- is in line with Delta’s strategy of actively pursuing investment opportunities that will
enhance the overall quality and value of its portfolio.
3. Effective date of the Acquisition
The effective date (“the Effective Date”) of the Acquisition will be 1 September 2014.
4. Consideration for the Acquisition
The aggregate purchase consideration for the Acquisition is R240 000 000 (two hundred and
forty million Rand) (“the Purchase Consideration”).
The Purchase Consideration excludes ancillary costs related to the Acquisition in the amount
of R2 700 000 (two million seven hundred thousand Rand).
The Purchase Consideration will be settled in cash upon registration of transfer of the
Property Development into the name of Delta.
5. Conditions precedent
The Acquisition is subject to, inter alia, the fulfilment or waiver of the following suspensive
conditions:
a. all aspects of the development plan being substantially finalised to the satisfaction
of Delta;
b. the Seller concluding signed leases on terms and conditions acceptable to Delta in
respect of at least 85% of the total rentable area of the Property Development on
practical completion, with no less than 80% being tenanted by national tenants
acceptable to Delta. In addition the Seller will provide a 24 month head lease in
respect of the rentable area of the Property Development that, is vacant as at the
Effective Date;
c. the Property Development being completed in accordance with the development
plan, by no later than 1 August 2014, or such longer period as is reasonable in the
circumstances (which period will not exceed a further 90 days) provided that the
delay in completing the Property Development is for reasons outside of the control
of the Seller;
d. approval by the JSE Limited (“the JSE”) and Competition Commission, to the extent
required; and
e. Delta providing written confirmation of a letter of finance on such terms and
conditions as are acceptable to the Seller
6. Specific information on the Property Development
Details of the Property Development, including inter alia, the location, sector, weighted
average rental per square meter, the Purchase Consideration as well as the valuation
attributed to the Property Development, is set out below.
Vendor Property development Sector Gross Single Weighted Annuali Purchase Value(3) (4)
description/ location lettable or average sed price R
R
area multi gross propert
m2 tenant rental per y
ed m²(1) yield(2)
R %
Realty Dynamix Tembisa Megamart, Retail 14096 Multi 156 9.1 240 000 000 240 000 000
107 (Pty) Ltd Erven
3914,5140,5141,3381,30
71,3072,3878 and 3877
Tswelapele Extension 6
Township
TOTAL 14 096 Multi 156 9,10 240 000 000 240 000 000
Notes:
1. Based on the net rental income, excluding parking, storage and/or recoveries, for the 12 month
period from the anticipated date of transfer, assuming the Property Development is fully let.
2. Annualised cap rate is based on property income and variable property expenses (which include
property management fees but exclude asset management fees and finance charges) over the
purchase price.
3. No independent valuation has been performed on the Acquisition. The value attributed to the
Acquisition of R240 000 000 (two hundred and forty million Rand) (“the Value”) was derived at by
Delta’s asset management company, MPI Property Asset Management Proprietary Limited.
4. The Value was derived after taking into account costs related to the Acquisition in the amount of
R2 700 000 (Two million seven hundred thousand Rand) which has been capitalised to the
Acquisition.
7. Categorisation of the Acquisition
The transaction constitutes a Category 2 transaction in terms of the JSE Listings
Requirements and accordingly does not require the approval of Delta Linked Unitholders.
8. Financial effects
The financial effects of the Acquisition, as required in terms of the JSE Listings Requirements,
are in the process of being finalised and will be announced in due course.
9. Cautionary
Delta Linked Unitholders are advised to exercise caution in dealing in their linked units until
the financial effects of the Acquisition are announced.
26 March 2014
Johannesburg
Investment bank and sponsor
Nedbank Capital
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