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Acquisition by Redefine of Leaf Property Fund Proprietary Limited (“Leaf Property Fund”)
REDEFINE PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1999/018591/06)
JSE share code: RDF ISIN: ZAE000190252
(Approved as a REIT by the JSE)
(“Redefine” or the “company”)
ACQUISITION BY REDEFINE OF LEAF PROPERTY FUND PROPRIETARY LIMITED (“LEAF PROPERTY FUND”)
1. INTRODUCTION
The board of directors of Redefine is pleased to announce that Redefine has concluded an agreement
(the “sale agreement”) with the trustees of the Leaf Property Fund Trust (“Leaf Property Fund
Trust” or “the seller”) to acquire Leaf Property Fund (the “acquisition”).
Leaf Property Fund is a property fund which owns a portfolio of high-quality commercial property
assets in prime locations across South Africa valued at approximately R3.7 billion.
2. RATIONALE
The acquisition is in line with Redefine’s strategy of improving the quality of its core property
portfolio by acquiring high quality assets that offer cash flow comfort and low vacancy levels.
3. TERMS OF THE ACQUISITION
3.1. The effective date of the acquisition is 1 March 2015 (the “effective date”).
3.2. In terms of the sale agreement, Redefine will acquire all the linked units and claims against
Leaf Property Fund for a purchase consideration comprising:
3.2.1. an amount of R3 687 200 000;
3.2.2. less the amount of Leaf Property Fund’s liabilities (including debt funding)
adjusted for the marked-to-market value of all hedges and the net working capital
of the Leaf Property Fund group on the effective date;
3.2.3. plus non-property related fixed assets at the written down book value thereof; and
3.2.4. less the estimated value of certain uncompleted maintenance capital expenditure
(subject to a maximum amount of R 10 803 000) and plus certain capital
expenditure that may be incurred by Leaf Property Fund before the effective date,
(the “purchase consideration”).
3.3. The purchase consideration will be discharged on the later of:
3.3.1. the effective date; and
3.3.2. the fifth business day after the last of the conditions precedent (as set out in
paragraph 4 below) has been fulfilled or waived,
or such other date as may be agreed in the writing between the parties (the “closing date”).
3.4. On the closing date Redefine will settle the purchase consideration (based on a provisional
calculation) as follows:
3.4.1. 80% of the purchase consideration by the issue of Redefine shares, at the clean 30
day volume weighted average price of those shares as at the closing date (the
“consideration shares”); and
3.4.2. the balance in cash.
3.5. The purchase consideration, as paid on the closing date, will be subject to subsequent
verification, and any adjusting payment will be made in cash.
3.6. To the extent that Leaf Property Fund Trust retains the consideration shares, it shall not be
entitled to receive the distribution to be paid by Redefine in respect of the 6 month period
ended 28 February 2015. To the extent that such distribution is actually paid in respect of any
of the consideration shares, Leaf Property Fund Trust shall pay to Redefine an equivalent
amount.
3.7. If the closing date occurs after 1 March 2015 but before 1 May 2015 the cash portion of the
purchase consideration shall incur interest at a nominal annual compounded monthly rate of
8% calculated from 1 March 2015 to the closing date. If the closing date occurs after
1 May 2015 the cash portion of the purchase consideration shall incur interest at a nominal
annual compounded monthly rate of 8% calculated from 1 March 2015 to the closing date and
the portion of the purchase consideration to be settled by the issue of the consideration shares
shall be escalated at a nominal annual compounded monthly rate of 8% calculated from 1 May
2015 to the closing date.
3.8. The sale agreement provides for warranties and indemnities that are normal for an acquisition
of this nature.
4. CONDITIONS PRECEDENT
The sale agreement is subject to inter alia the fulfilment of the following conditions precedent:
4.1. all requisite approvals being obtained from the trustees of Leaf Property Fund Trust, the board
of directors of Leaf Property Fund and the board of directors of Redefine;
4.2. all requisite approvals being obtained from third parties including debt funding counterparties,
hedge counterparties and any other third parties;
4.3. Redefine and Leaf Property Fund Trust concluding an agreement in terms of which Redefine
will acquire from Leaf Property Fund Trust certain land adjacent to the Boulevard precinct,
Cape Town, for a purchase consideration of R12.5 million;
4.4. Redefine, Leaf Property Fund Trust and Leaf Property Fund finalising and agreeing on certain
information to be included in certain annexures to the sale agreement;
4.5. Redefine and Leaf Property Fund Management Proprietary Limited (the “manager”) agreeing
on certain transitional services (comprising mainly asset management services and financial
and reporting services) to be provided by the manager to Leaf Property Fund from the effective
date, and the applicable fee arrangements pertaining thereto; and
4.6. approval of the acquisition by the Competition Authorities in terms of the Competition Act, No
89 of 1998.
5. DETAILS OF THE PROPERTY PORTFOLIO
Details of the properties in the Leaf Property Fund property portfolio, including property name,
address, geographical location, sector, gross lettable area (“GLA”), weighted average rental per square
metre, the valuations attributed to the properties and net operating income, are as follows:
Net
Weighted operating
average income(Mar
rental per 2015 – Feb
Name Address Location Sector GLA m2 m2 Valuation 2016)
1 Black River Park* Fir Street, Observatory, Cape
Town, 7925 Western Cape Office 49 900 R112.49 R993 000 000 R72 931 255
2 Wembley Square (1) Solan Street, Gardens, Cape Town, Western Office/ 10 777 R130.01 R229 915 205 R17 327 149
8001 Province Retail
3 Wembley Square (2) Solan Street, Gardens, Cape Town, Western Office 17 097 R124.33 R378 275 132 R28 508 030
8001 Province
4 Wembley Square (3) Solan Street, Gardens, Cape Town, Western Office 4 765 R119.47 R80 809 663 R6 090 076
8001 Province
5 The Boulevard Office Searle Street, Woodstock, Cape Western Office 6 725 R155.87 R117 021 622 R13 852 418
Park (A) Town, 7923 Province
6 The Boulevard Office Searle Street, Woodstock, Cape Western Office 7 822 R104.01 R147 935 273 R11 576 333
Park (B&C) Town, 7923 Province
7 The Boulevard Office Searle Street, Woodstock, Cape Western Office 16 251 R132.85 R364 043 105 R28 487 352
Park (F&G) Town, 7923 Province
8 Silver Stream Business Muswell Road, Bryanston South, Gauteng Office 21 132 R134.56 R411 200 000 R33 375 368
Park 2021
9 Silver Point Office Park Ealing Crescent, Bryanston, 2021 Gauteng Office 4 134 R135.43 R75 000 000 R6 000 000
10 Clearwater Office Park Cnr Christian de Wet &Millenium Gauteng Office 18 825 R91.99 R250 000 000 R20 004 383
Roads, Roodepoort, 1709
11 Crawford House Muswell Road, Bryanston South, Gauteng Office 1 876 R120.86 R29 000 000 R2 581 200
2021
12 Hampton Park Georgian Crescent, Bryanston Gauteng Office 21 210 R113.56 R332 000 000 R27 687 646
13 Centurion Gate Akkerboom Street, Centurion, Gauteng Office 11 538 R125.55 R219 000 000 R18 800 000
0157
Net
Weighted operating
average income(Mar
rental per 2015 – Feb
Name Address Location Sector GLA m2 m2 Valuation 2016)
Total 192 052 R3 687 200 000 R287 221 210
* Leaf Property Fund has a 70% interest.
After taking into account liabilities the value of Leaf Property Fund’s net assets is approximately
R2 billion.
6. VALUATION
The board of directors of Redefine is satisfied that the aggregate value attributed to the Leaf Property
Fund property portfolio, and the individual values attributed to each of the properties forming part of
the portfolio, for purposes of the determination of the purchase consideration payable in terms of the
transaction, as summarised above, are in line with the directors own assessment of the aggregate value
of the portfolio and the individual values of each of the properties forming part of the portfolio. The
directors of the company are not independent and are not registered as professional valuers or as
professional associate valuers in terms of the Property Valuers Profession Act, No 47 of 2000.
7. CATEGORISATION
The acquisition is a category 2 transaction in terms of the JSE Listings Requirements and accordingly
does not require approval by shareholders.
28 January 2015
Corporate advisor and sponsor to Redefine
Java Capital
Legal advisor toRedefine
Cliffe Dekker Hofmeyr
Corporate advisor to Leaf Property Fund
Leaf Capital
Legal advisor to Leaf Property Fund
Shepstone & Wylie Attorneys
Date: 28/01/2015 02:55:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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