PUTPROP LIMITED - Further Investment into Associate

Further Investment into Associate

PUTPROP LIMITED
Incorporated in the Republic of South Africa
(Registration number 1988/001085/06)
Share code: PPR ISIN: ZAE000072310
(“Putprop” or “the Company” or “the Group”)


FURTHER INVESTMENT INTO ASSOCIATE


1. INTRODUCTION

   Shareholders are advised that one of Putprop’s associates, Belle Isle Investments Proprietary Limited
   (“Belle Isle”), has concluded an agreement with three property-owning entities, being Centurion 108
   Beleggings Proprietary Limited (“Centurion 108”), Falsetto Investments (“Falsetto Investments”)
   Proprietary Limited and ERF 49 Menlyn Proprietary Limited (“ERF 49 Menlyn”) for the amalgamation of
   such entities into a single property portfolio company (“the Amalgamated Entity”)
   (“the Amalgamation”).
  
   The board of directors of Putprop (“the Board”) wishes to inform shareholders that the Company has
   invested an additional R20 million into Belle Isle such that its equity holding has decreased from 27.5%
   of Belle Isle to 21% of the Amalgamated Entity (“the Investment”).

2. THE INVESTMENT

  2.1 Details of Belle Isle

      Belle Isle is a property investment company that owns Centurion Gate. Centurion Gate, located at
      138 Akkerboom Street, Centurion, comprises of two buildings and a petrol filling station, located at
      Erf 1958 Zwartkop Ext 20, a hotel located at Erf 1952 Zwartkop Ext 22, and vacant development
      land located at Portion 3 of Erf 1951 Zwartkop Ext 22. The property’s rentable area is 16 195.90
      square metres and the average rental per square metre is currently R88.65.

  2.2 Details of Centurion 108

      Centurion 108 is a property investment company that owns the Highlands Shopping Centre, which is
      located at Erf 527 Die Hoewes Ext 108 and Portion 69 of the Farm Highlands 359 JR, corner of
      Rabie Street and Glover Avenue, Die Hoewes, Centurion. The property’s rentable area is 6 500.40
      square metres and the average rental per square metre is currently R108.23.

  2.3 Details of Falsetto Investments

      Falsetto Investments is a property investment company that owns the Brooklyn Pavilion, which is
      located at Erf 359 Nieuw Muckleneuk, 217 Bronkhorst Street, Brooklyn, Pretoria. The property’s
      rentable area is 3 388.74 square metres and the average rental per square metre is currently
      R150.92.

  2.4 Details of ERF 49 Menlyn

      ERF 49 Menlyn is a property investment company that owns Glen Manor Office Park, which is
      located on the remaining extent of Erf 49, Menlyn Extension 4, Frikkie De Beer Street, Menlyn,
      Pretoria. The property’s rentable area is 7 827.29 square metres and the average rental per square
      metre is currently R74.61.

  2.5 Rationale for the Investment
      The Investment is in line with the Group’s state objective of strategic investments focussed on
      industrial and commercial opportunities, where yields are enhancing in the medium and long term as
      well as ensuring future long term sustainable rentals from tenants.
  
  2.6 Investment Consideration

      The total purchase consideration of R20 million will be settled by internally generated cash.

  2.7 Effective Date

      The effective date of the Investment is 3 February 2017.

  2.8 Conditions Precedent

      The Investment is not subject to any conditions precedent.

3. FINANCIAL INFORMATION

   The value of the net assets of Belle Isle as at 31 August 2016 (prior to the Amalgamation) was
   R61 654 076.

   The profit before interest and tax attributable to the net assets of Belle Isle for the six months ended
   31 August 2016 (prior to the Amalgamation) was R5 552 494.00.

   A valuation of the property portfolio of the Amalgamated Entity was performed on 29 February 2016 by
   Jurgen Karg, representing Jones Lang LaSalle Proprietary Limited, who is independent and is registered
   as a professional valuer in terms of the Property Valuers Profession Act, 2000 (Act 47 of 2000). The
   property portfolio was as follows:

   No.          Property Name                   Type                  Registered Owner            Market Value
   1.           Brooklyn Pavilion               Offices               Falsetto                 R    54 300 000
                                                                      Investments
   2.           Highlands Shopping Centre       Retail                Centurion 108            R    62 400 000
   3.           Glen Manor Office Park          Offices               ERF 49 Menlyn            R    63 100 000
   4.           Centurion Gate                  Building B&C and      Belle Isle               R    133 600 00
                                                PFS
                                                Road Lodge Hotel                               R     5 500 000
                                                Vacant                                         R    10 500 000
                                                Development
                                                Land

4. CLASSIFICATION OF THE ACQUISITION

   The Investment is classified as a Category 2 transaction in terms of the Listings Requirements of the
   JSE Limited.



Johannesburg
2 March 2017

Sponsor
Merchantec Capital

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