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INGENUITY PROPERTY INVESTMENTS LIMITED - Announcement regarding the acquisition of a property

Release Date: 28/02/2017 14:50
Code(s): ING     PDF:  
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Announcement regarding the acquisition of a property

INGENUITY PROPERTY INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2000/018084/06)
ISIN: ZAE000127411 JSE share code: ING
(“Ingenuity” or “the Company”)

ANNOUNCEMENT REGARDING THE ACQUISITION OF A PROPERTY

1.    Introduction

      Ingenuity shareholders are advised that Wespin 42 Proprietary Limited (“Wespin”), a wholly-owned
      subsidiary of Ingenuity, has entered into an offer to purchase with Netcare Property Holdings
      Proprietary Limited, in terms of which Wespin will acquire Erven 9644, 2142 and Remaining Extent of Erf
      2143 situated in Bree and Longmarket Streets, Cape Town and known as the former Netcare Christiaan
      Barnard Hospital (“the Property”) (“the Acquisition”).

      The Acquisition will become effective on transfer of the Property, which is expected to be on fulfilment
      of the condition precedent outlined in 4 below, on or about 1 August 2017 (“the Effective Date”).

      A formal agreement for the Acquisition will be entered into in due course.

2.    Rationale for the Acquisition

      The Property has been acquired in line with the Company’s strategy to invest in value-add opportunities
      in the Western Cape.

      There are currently two buildings on the Property. The main building consists of 19 floors which are
      made up of a basement, ground floor, a mezzanine floor, 7 parking levels (989 bays) and 9 floors of
      offices. The second building is a 7 storey annex building linked by a bridge to the main building.

      Total gross building area (including parking) is 59 536m2.

      The two buildings represent a significant redevelopment opportunity in an area of Cape Town that is
      undergoing substantial change offering vibrant retail, offices and residential opportunities.

      It is further envisaged that Ingenuity will enter into a joint arrangement to co-develop and market the
      Property. Discussions in this regard have commenced.

3.    Consideration for the Acquisition

      The total consideration for the Acquisition is R300 000 000 (“the Purchase Consideration”).

      The Purchase Consideration will be settled by Ingenuity via a bank guarantee for the full purchase price,
      within 20 business days of a formal sale agreement being concluded.

      A portion of the Purchase Consideration may be settled by way of issue of shares via a vendor
      consideration placement.

4.    Conditions precedent

      The Acquisition is subject to Competition Commission approval, to the extent required.

5.         Information relating to the Property

Property             Location       Sector          Land          Gross        Single or      Weighted          Purchase    Value of
                                                  extent       lettable          multi-        average     Consideration         the
                                                   (m2 )           area         tenanted    net rental             (R’m)    Property
                                                                   (m2)                         per m2                         (R’m)
                                                                                                   (R)                      (Note 1)
                                                                                              (Note 2)
Erven 9644       Bree Street,      Offices         3 989         30 040            Multi          N/A
and 2143,          Cape Town
Cape Town                              989                                                     R1 500
                                   Parking                                                        per
                                      Bays                                                    parking
                                                                                                  bay
Erf 2142          Longmarket       Offices           283          2 293            Multi          N/A
Cape Town             Street

RE Erf 2143       Longmarket          Land             6            N/A             N/A           N/A
Cape Town             Street

                                                   4 278         32 333                           N/A               300         300



           Note 1:      No independent valuation has been performed on the Property. The value attributed to the Property has been
                        derived by the directors of Ingenuity using the capitalisation of rental method.
           Note 2:      No rental is currently being received. The Property has been acquired for re-development.


6.         Value of net assets and profits attributable to the net assets of the Acquisition

           The value of the net assets that are the subject of the Acquisition is R300 million and there are currently
           no profits attributable to the net assets that are the subject of the Acquisition as the Property is mostly
           vacant other than parking bays and certain office components which are let. The net income component
           attributable to this is considered not to be significant.

           Ingenuity anticipates that other existing components of the Property will generate income in the near
           future.

7.         Categorisation of the Acquisition

           The Acquisition is a Category 2 transaction in terms of JSE Limited Listings Requirements.

28 February 2017

Cape Town

Investment Bank, Corporate Advisor and Sponsor
Nedbank Corporate and Investment Banking

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