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Acquisition of portfolio of letting enterprises, disposal of Van Riebeeck Mall & acquisition of 26 Yaldwyn Road
Lodestone REIT Limited
(previously Lodestone Properties Limited)
(Incorporated in the Republic of South Africa)
(Registration number: 2010/017830/06)
(JSE share code: LDO)
(ISIN: ZAE000197935)
(“Lodestone” or “the company”)
(Approved as a REIT by the JSE)
ACQUISITION OF A PORTFOLIO OF LETTING ENTERPRISES AND PROPERTIES, DISPOSAL OF
VAN RIEBEECK MALL AND ACQUISITION OF 26 YALDWYN ROAD
A. ACQUISITION OF A PORTFOLIO OF LETTING ENTERPRISES
1. Introduction
Shareholders are advised that Lodestone Investments Proprietary Limited (“Lodestone Investments”), being a
wholly owned subsidiary of the company, has, subject to certain conditions precedent, concluded an agreement
(“the purchase agreement”) with Maizey Properties (Selby) Proprietary Limited (“the seller”) for the
acquisition of a 50% undivided share in a portfolio of letting enterprises conducted in respect of and including
warehouses and factories of the seller, further details of which are set out below (collectively, “the property
portfolio”) (“the acquisition”).
2. Rationale
The acquisition is in line with Lodestone’s strategy to acquire yield enhancing assets to grow its portfolio with
long term, sustainable cash flows.
3. Details of the property portfolio
Details of the properties in the property portfolio, including property name, geographical location, sector, gross
lettable area (“GLA”), weighted average rental per square metre, the purchase considerations attributed to the
properties and the estimated net income attributable to the properties comprising the property portfolio, are as
follows:
Estimated
net income
(1 July 2015
to 30 June
2016) (Being
Weighted Lodestone
average rental Purchase Investment’s
Property Geographical 100% per m2 consideration 50% portion
name location Sector GLA (m2) (R/m2) (R) (R)
1. 15 Progress KwaZulu-
Road Natal Industrial 3 922 35.00 9 003 881 823 962
2. 40 Beechfield KwaZulu-
Crescent Natal Industrial 965 39.29 2 486 122 227 510
3. 312 Mitchell
Street Gauteng Industrial 1 741 42.79 4 248 394 446 666
4. 41 Angus
Crescent Gauteng Industrial 1 680 55.51 6 153 021 559 560
216 Winze
5. Road Gauteng Industrial 1 466 29.71 2 485 618 261 332
6. 100 Dekema Gauteng Industrial 7 500 27.16 11 623 961 1 222 115
Road
7. 37 Kindon
Road Gauteng Industrial 3 400 18.86 3 658 807 384 678
8. 44 Neptune
Street Western Cape Industrial 1 785 26.70 3 144 146 285 931
9. 15 Kouga
Street Western Cape Industrial 800 32.03 1 462 138 153 725
10. 19A
Dorsetshire
Street Western Cape Industrial 1 350 45.55 4 056 955 368 942
11. 20 Industrial
Crescent Mpumalanga Industrial 2 680 40.47 6 909 047 650 696
Total 27 289 55 232 090 5 385 117
4. Terms of the acquisition
4.1 The effective date of the acquisition is the date of registration of transfer (“the transfer date”) of each of
the properties comprising the property portfolio into the name of Lodestone Investments (“the effective
date”).
4.2 In terms of the purchase agreement, Lodestone Investments will purchase the property portfolio from the
seller for an aggregate purchase consideration of R55 232 090 (“the purchase consideration”).
4.3 The risk in, and benefit of, the property portfolio will pass to Lodestone Investments on the effective
date, including the entitlement to a 50% undivided share in net rental income in respect of the property
portfolio.
4.4 The seller cedes an undivided 50% of its rights and assigns an undivided 50% share of its obligations in
terms of the current lease agreements entered into between the seller and the tenants in respect of the
properties comprising the property portfolio to the purchaser with effect from the effective date.
4.5 All existing leases have been amended to reflect that they are triple net leases, by substituting the existing
leases with new leases and extending the terms of each lease or providing new leases for a period of not
less than 10 years commencing on the effective date.
4.6 The purchase agreement provides for warranties and indemnities that are normal for an acquisition of this
nature.
5. Conditions precedent
The purchase agreement is subject to the fulfilment or waiver, as the case may be, of the following condition
precedent:
5.1 by no later than 3 June 2016, the seller and Heather Maizey (“Heather”) or her nominee concluding an
agreement in terms of which the seller will purchase back from Heather or her nominee, that portion of
the issued share capital held by her in the seller on terms and conditions to be agreed upon mutually
between them.
6. Valuation
The board of directors of Lodestone is satisfied that the aggregate value attributed to the property portfolio is in
line with the aggregate purchase consideration being paid by the Lodestone. 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.
B. DISPOSAL OF VAN RIEBEECK MALL
1. Introduction
Shareholders are advised that Lodestone Investments Proprietary Limited (“Lodestone Investments”), being a
wholly owned subsidiary of the company, has, subject to certain conditions precedent, concluded an agreement
(“the disposal agreement”) with Aristonas Proprietary Limited (“the purchaser”) for the disposal of the letting
enterprise conducted in respect of and including the property known as Van Riebeeck Mall (“Van Riebeeck
Mall” or “the property”) (“the disposal”).
2. Rationale for the disposal and application of the disposal proceeds
The proceeds from the disposal will be used by Lodestone to settle its interest bearing debt and to take advantage
of properties with development potential.
3. Details of Van Riebeeck Mall
Details of the property, including property name, geographical location, sector, gross lettable area (“GLA”),
weighted average rental per square metre, the purchase consideration, valuation and the estimated net income
attributable to Van Riebeeck Mall, are as follows:
Estimated
Weighted net income
average Valuation (1 July
rental per Purchase at 31 2015 to 30
Property Geographical GLA m2 consideration March 2015 June 2016)
name location Sector (m2) (R/m2) (R) (R) (R)
1. Van
Riebeeck
Mall Gauteng Retail 10 634 75.86 78 000 000 77 400 000 7 448 576
4. Terms of the disposal
4.1 The effective date of the disposal is the date on which the disposal agreement becomes unconditional by
virtue of the fulfilment or waiver, as the case may be, of the suspensive conditions set out below.
4.2 The purchase consideration payable by the purchaser to Lodestone Investments for the property is
R78 000 000 (“the purchase consideration”).
4.3 The purchase consideration has been determined by Lodestone Investments on the basis that the
registration of a cession and assignment of the notarial lease between Ekurhuleni Metropolitan
Municipality and Lodestone Investments in respect of the property into the name of the purchaser and the
simultaneous cancellation of all existing mortgage bonds over the property (“transfer”) will be effected
on or before 1 August 2015.
4.4 If for any reason transfer takes place after 1 August 2015, the purchase consideration will be
automatically increased by an amount equal to 0,75% thereof calculated at a compounded interest rate for
every month until the transfer date (defined below).
4.5 The purchase consideration is payable by the purchaser to Lodestone Investments against transfer.
4.6 Possession of the property will be given to and taken by the purchaser on the date of transfer (“the
transfer date”), from which date the purchaser will be entitled to every benefit and all income arising
from the property and from which date the property will be held by the purchaser at its risk and expense.
4.7 Occupation of the property will, subject to the rights of tenants in terms of leases between Lodestone
Investments and the tenants in respect of the property, be given and taken by the purchaser on the transfer
date.
4.8 Lodestone Investments will continue to manage the business of the property as a going concern up to the
transfer date.
4.9 The agreement provides for warranties and indemnities that are normal for a disposal of this nature.
5. Suspensive conditions
The disposal agreement is subject to the fulfilment or waiver, as the case may be, of the following conditions:
5.1 within 30 business days from 15 May 2015, the purchaser completing a due diligence investigation; and
5.2 within 5 business days from successful completion of the aforementioned due diligence investigation, the
board of directors of Lodestone Investments resolving to approve the sale of the property.
6. Valuation
The property was valued at 31 March 2015 by Peter Parfitt of Quadrant Properties Proprietary Limited who is an
independent registered professional valuer in terms of the Property Valuers Profession Act, No 47 of 2000.
7. Categorisation
The disposal is a category 2 transaction in terms of the JSE Listings Requirements and accordingly does not
require approval by shareholders.
C. ACQUISITION OF 26 YALDWYN ROAD
1. Introduction
Shareholders are advised that Lodestone has, through its wholly owned subsidiary Lodestone Investments,
subject to certain conditions precedent, concluded an agreement (“the agreement”) with Silcprop Proprietary
Limited (“the seller”) for the acquisition of a letting enterprise conducted by the seller in respect of and including
the property known as 26 Yaldwyn Road, further details of which are set out below (“the property”) (“the
acquisition”).
2. Rationale
The acquisition is in line with Lodestone’s strategy to acquire yield enhancing assets with long term, sustainable
cash flows to grow its portfolio.
3. Details of the property
Details of the property, including property name, geographical location, sector, gross lettable area (“GLA”),
weighted average rental per square metre, the purchase consideration attributed to the property and the estimated
net income attributable to the property, are as follows:
Estimated
net income
Weighted (1 July 2015
average rental Purchase to 30 June
Property Geographical per m2 consideration 2016)
name location Sector GLA (m2) (R/m2) (R) (R)
1. 26 Yaldwyn
Road Gauteng Industrial 10 200 45.00 60 000 000 5 508 000
4. Terms of the acquisition
4.1 The effective date of the acquisition is the date on which the agreement becomes unconditional by virtue of
fulfilment or waiver, as the case may be, of the conditions precedent set out below (“the effective date”).
4.2 In terms of the agreement, Lodestone Investments will purchase the property from the seller for a purchase
consideration of R60 000 000 (“the purchase consideration”).
4.3 The purchase consideration is payable to the seller against transfer of the property into the name of Lodestone
Investments.
4.4 The agreement provides for warranties and indemnities that are normal for an acquisition of this nature.
5. Conditions precedent
The agreement is subject to the fulfilment or waiver, as the case may be, of the following conditions precedent:
5.1 Lodestone Investments completing a due diligence investigation within 20 days from receipt of all the
information required for the due diligence investigation; and
5.2 Within 5 business days from the successful completion of the due diligence investigation, the board of
directors of Lodestone Investments passing a resolution approving the acquisition in terms of the agreement
and any addendum thereto.
6. Valuation
The board of directors of Lodestone is satisfied that the aggregate value attributed to the property is in line with
the aggregate purchase consideration being paid by the Lodestone. 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.
26 May 2015
Designated advisor
Java Capital
Date: 26/05/2015 12:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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