TRADEHOLD LIMITED - Acquisition of a property in the UK and a joint venture agreement

Acquisition of a property in the UK and a joint venture agreement

TRADEHOLD LIMITED
(Registration number: 1970/009054/06)
(“Tradehold” or “the Company”)
Incorporated in the Republic of South Africa
JSE Share code: TDH ISIN: ZAE000152658

ACQUISITION OF A PROPERTY IN THE UNITED KINGDOM (“UK”) AND A JOINT VENTURE
AGREEMENT

1     Introduction
      Tradehold shareholders are advised that Moorgarth Holdings (Luxembourg) S.à.r.l
      (“Moorgarth”), a subsidiary of Tradehold, has entered into agreements, including a joint venture
      agreement with, Texton Property Fund Limited (“Texton”), whereby Texton and Moorgarth,
      through a special purpose vehicle, Inception (Reading) S.à.r.l (“Inception”), will each acquire
      50% of a well-located retail shopping centre (“Broad Street Mall”) in Reading, England (“the
      Property”) for approximately £30,564,000 (“the Acquisition”).

2     Effective Date and Consideration
      The effective date of the Acquisition will be on or about 29 May 2015.

      The aggregate purchase consideration for the Acquisition amounts to £30,564,000. Acquisition
      costs of approximately £1,772,500 will also be incurred. The purchase consideration (including
      acquisition costs) will be funded by way of group capital and pound sterling loan facilities.

3     Net Assets Acquired and Profits Attributable to Those Assets
      The value of Tradehold’s interest in the Broad Street Mall investment property is approximately
      £32.5 million, and Tradehold’s share of the third party bank funding liability is approximately
      £19.7 million.

      Tradehold will utilise its own funds for the remaining £12.8 million of its purchase price
      obligation.

      Tradehold’s share of the profit after bank funding interest but before taxation associated with
      these assets is approximately £1.3 million per annum.

4     Description of Business and Rationale for the Acquisition
      This asset will be the third and largest shopping centre acquisition for the Group and underpins
      the Group’s strategy to invest in the South East of England. The description of the asset is
      below, but the centre provides many opportunities to enhance the value further through
      reconfiguration and extension of the existing facilities and broadening of the retail and leisure
      offer on the site.

      The UK strategy has been to invest in regionally dominant towns and shopping centres within
      those towns. Through the joint venture we have secured a partner with a common asset
      management objective but also it gives Tradehold the ability to grow the UK portfolio using not
      only its own financial resources but also combining resources with a financially strong, credible
      and well respected partner.
5     Property information
      Details relating to the Broad Street Mall are as follows:

       Description                  Acquisition of 50% of the issued share capital of
                                    Inception, a company registered in Luxembourg.
                                    Inception’s initial investment will solely be Broad Street
                                    Mall
       Property description:      - Broad Street Mall, Reading, registered at the Land
                                    Registry with freehold under title numbers BK383592
                                    and BK383593
                                  - Retail shopping centre including an office space in 2
                                    office buildings and a car park with over 740 spaces
       Tenants:                     Consists of 75 retail units and 6 kiosks
       Location:                    Reading, England
       GLA:                         35,860.27m2
       Lease expiry                 Weighted average lease length of 5.4 years
       Net annual income:           £4,350,000, being 100% of the net annual income of
                                    which Moorgarth is entitled to 50%
       Weighted average net rental  £10.11 per m2 , being 100% of the weighted average net
       per m2:                      rental
       Purchase price:              £61,128,000 (excluding acquisition costs of
                                    approximately £3,545,000), being 100% of the purchase
                                    price of which Moorgarth will be liable for 50%
       Vendor                       Asset Managers Englander on behalf of an Israeli family
                                    Trust
       Independent gross valuation  £63,000,000.
       (May 2015):

      Broad Street Mall will be a 50% held joint venture of Moorgarth and Texton whose
      memorandums of incorporation will comply with the JSE Limited („JSE“) Listings Requirements.

      Moorgarth, qualified and experienced property managers, will be appointed as the property and
      strategic manager.

      The Property has been valued by HSBC Bank Plc (Broad Street Mall). HSBC Bank Plc are
      independent and RICS (Royal Institution of Chartered Surveyors) registered valuers.

6     Conditions precedent
      There are no conditions precedent to the acquisition.

7     Categorisation
      The Acquisition is a category 2 transaction in terms of the JSE Listings Requirements.


Cape Town
20 May 2015

Sponsor
Bravura Capital Proprietary Limited

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