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Further acquisition of a property in the UK and expansion of Texton's UK property portfolio
TEXTON PROPERTY FUND LIMITED
Granted REIT status by the JSE
(Incorporated in the Republic of South Africa)
(Registration number 2005/019302/06)
JSE code: TEX
ISIN: ZAE000190542
(“Texton” or “the Company”)
FURTHER ACQUISITION OF A PROPERTY IN THE UNITED KINGDOM (“UK”) AND EXPANSION OF TEXTON’S
UK PROPERTY PORTFOLIO
1. INTRODUCTION
Texton is pleased to advise the shareholders of the Company (“Shareholders”) that it has
concluded an agreement to acquire a distribution warehouse (“Bawtry Building”) located in
Doncaster in the UK (the “Bawtry Building Acquisition”) for £17,000,000 at an acquisition yield of
6.45%.
The Bawtry Building is a high quality A Grade distribution warehouse which is exclusively
tenanted by DHL Supply Chain Limited (“DHL”), a company which is part the world’s leading
postal and logistics company Deutsche Post DHL Group. DHL has 15 years remaining on the lease.
Conclusion of the Bawtry Building Acquisition further enhances Texton’s UK portfolio which is in
line with Texton’s stated strategy to achieve geographic diversification beyond South African
borders into the UK where management of Texton’s asset management company, Texton
Property Investments Proprietary Limited, has knowledge and experience, and where property
acquisition opportunities are attractive.
Property information and other details pertaining to the Bawtry Building Acquisition are set out
in section 3 below.
2. RATIONALE FOR THE BAWTRY BUILDING ACQUISITION
The Bawtry Building Acquisition presents an opportunity for Texton to:
- Acquire a high quality A Grade property with a long-term lease underpinned by a single
international anchor tenant;
- Increase its portfolio weighting within the industrial sector and achieve geographic
diversification into the UK in line with Texton’s stated investment strategy; and
- Add scale to Texton’s existing UK portfolio through the acquisition of a portfolio enhancing
property in a manner consistent with the Company’s stated investment strategy.
3. INFORMATION RELATING TO THE BAWTRY BUILDING ACQUISITION AND THE BAWTRY BUILDING
Details relating to the Bawtry Building are as follows:
Description: Acquisition of the Bawtry Building from DHL through the
acquisition of 100% of the issued share capital of
Cheltondale Investment Holdings Limited (“Cheltondale”),
a new company registered in the British Virgin Islands,
which in turn will own the Bawtry Building. Pursuant to the
conclusion of the Bawtry Building Acquisition, and in terms
of the sale and purchase agreement, Texton will lease back
the Bawtry Build to DHL on the lease terms set out below
Property description: A high quality A Grade distribution warehouse which
provides 272,260m2 of flexible and spacious warehouse
space
Tenure: Freehold
Tenants: DHL
Location: Doncaster, UK
GLA: 272,260m2
Lease expiry: 15 years, no breaks
Net annual income: £1,097,000 (R23,761,020 converted at the spot exchange
rate as at 7 December 2015 of £1:R21.66)
Net rental per m2: Industrial: £4.03 per m2 (R87.29 per m2 converted at the
spot exchange rate as at 7 December 2015 of £1:R21.66)
Purchase price: £18,700,000 (including Value Added Tax (“VAT”) of
approximately £1,700,000) (R405,042,000 converted at
the spot exchange rate as at 7 December 2015 of
£1:R21.66)
Vendor DHL
Acquisition yield 6.45%
Cheltondale will be a wholly owned subsidiary of Texton and its memorandum of incorporation
will comply with the Listings Requirements of the JSE Limited (“Listings Requirements”).
The board of directors of Texton (“Board”) is satisfied that the property value of the Bawtry
Building is in line with the purchase price being paid by Texton. The Board is not registered as
professional valuers or as professional associate valuers in terms of the Property Valuers
Profession Act, No 47 of 2000.
4. PURCHASE CONSIDERATION
The purchase consideration for the Bawtry Building Acquisition amounts to £17,000,000
(R368,220,000 converted at the spot exchange rate as at 7 December 2015 of £1:R21.66). The
Bawtry Building Acquisition is subject to VAT of approximately £1,700,000 (R36,822,000
converted at the spot exchange rate as at 7 December 2015 of £1:R21.66) which will be
recoverable by Texton. The aggregate purchase consideration of £18,700,000 (including the VAT
amount payable) will be funded through existing cash resources and no external borrowings will
be required to affect the Bawtry Building Acquisition.
5. EFFECTIVE DATE
The effective date of the Bawtry Building Acquisition will be the date of transfer of the Bawtry
Building into the name of Cheltondale, which is expected to be on or about 23 December 2015.
6. CLASSIFICATION OF THE BAWTRY BUILDING ACQUISITION
The Bawtry Building Acquisition constitutes a category 2 transaction, in terms of the Listings
Requirements and accordingly a circular will not be posted to Shareholders.
Dunkeld West
9 December 2015
Investment Bank and Sponsor
Investec Bank Limited
Date: 10/12/2015 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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