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Further acquisition of a property in the United Kingdom 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 two prime industrial premises which are exclusively let to
Caterpillar UK Limited (“Caterpillar UK”) (“the Caterpillar UK Buildings”) located on the North West
Industrial Estate, Peterlee, UK for a gross purchase price of £7,150,000 at an acquisition yield of
7.54% (the “Caterpillar UK Building Acquisition”).
Caterpillar UK which is part of Caterpillar Inc. has signed a 15 year lease which has 14 years and
4 months remaining. Caterpillar Inc. is a global manufacturer of construction and mining
equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric
locomotives. Caterpillar UK is one of Caterpillar Inc.’s largest operations outside of the United
States of America and employs more than 10,000 people across 20 major facilities.
Property information and other details pertaining to the Caterpillar UK Building Acquisition are
set out in section 3 below.
2. RATIONALE FOR THE CATERPILLAR UK BUILDING ACQUISITION
The Caterpillar UK Building Acquisition strongly compliments the quality of Texton’s existing
underlying property portfolio providing, inter alia:
- prime industrial property located in a well-established industrial and manufacturing node
in the UK;
- the Caterpillar UK Buildings form part of the established North West Industrial Estate,
one of the two main industrial and manufacturing locations in Peterlee, and is situated
immediately adjacent to Caterpillar UK’s manufacturing facility. The Caterpillar UK
Buildings are within close proximity of the A19 north to south arterial route, which
connects the town of Peterlee with Sunderland and Middlesbrough, in addition to the
other smaller centres of Seaham and Billingham;
- an underpin of a high quality blue chip tenant on a long 15 year lease of which 14 years
and 4 months are remaining;
- further sectoral and geographic diversification to Texton’s portfolio;
- additional scale, quality and diversity 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 to achieve geographic diversification beyond South African
borders into the UK; and
- an earnings accretive transaction for the Company.
3. INFORMATION RELATING TO THE CATERPILLAR UK BUILDING ACQUISITION
Details relating to the Caterpillar UK Buildings are as follows:
Description: Acquisition of the Caterpillar UK Buildings from Parabola
Capital LLP through the acquisition of 100% of the issued
share capital of Onslow Investment Holdings Limited, a
new company registered in the British Virgin Islands, which
in turn will own the Caterpillar UK Buildings
Property description: Two standalone prime industrial premises of steel portal
frame construction, with profile metal clad elevations and
brick clad integral office elements
Location: Peterlee, UK
GLA: 108,897 sq ft
Tenure: 150 year long leasehold interest which commenced on 6
February 2001 with an option to acquire the freehold
Lease expiry: 14.33 years
Net annual income: £539,040 subject to an escalation of 1.75% every five years
per annum compounded (R12,877,666 converted at the
spot exchange rate as at 18 January 2016 of £1:R23.89)
Net rental per sq ft: Industrial: £4.95 per sq ft (R118.26 per sq ft converted at
the spot exchange rate as at 18 January 2016 of £1:R23.89)
Gross purchase price: £7,150,000 (R170,813,500) converted at the spot exchange rate
as at 18 January 2016 of £1:R23.89)
Vendor: Parabola Capital LLP
Acquisition yield: 7.54%
Onslow Investment Holdings Limited 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 Caterpillar
UK Buildings 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 aggregate purchase consideration for the Caterpillar UK Building Acquisition including all
purchasing costs amounts to £7,564,000 (R180,703,960 converted at the spot exchange rate as
at 18 January 2016 of £1:R23.89). The purchase consideration of £7,564,000 will be funded
through existing cash resources, via a currency swap, and initially no external borrowings will
be required to effect the Caterpillar UK Building Acquisition.
5. EFFECTIVE DATE
The effective date of the Caterpillar UK Building Acquisition will be the date of transfer of the
Caterpillar UK Buildings into the name of Onslow Investment Holdings Limited, which is expected
to be on or about Friday, 22 January 2016.
6. CLASSIFICATION OF THE CATERPILLAR UK BUILDING ACQUISITION
The Caterpillar UK Building Acquisition constitutes a category 2 transaction, in terms of the
Listings Requirements and accordingly does not require Shareholders’ approval.
Dunkeld West
21 January 2016
Investment Bank and Sponsor
Investec Bank Limited
Date: 21/01/2016 05:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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