HOSPITALITY PROPERTY FUND LIMITED - Acquisition of various additional sections, exclusive use areas and a real right of extension in the Sandton Eye

Acquisition of various additional sections, exclusive use areas and a real right of extension in the Sandton Eye

HOSPITALITY PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2005/014211/06)
JSE share code: HPB
ISIN: ZAE000214656
(Approved as a REIT by the JSE)
(“Hospitality” or “the company”)



ACQUISITION OF VARIOUS ADDITIONAL SECTIONS, EXCLUSIVE USE AREAS AND A REAL RIGHT
OF EXTENSION IN THE SANDTON EYE SECTIONAL TITLE SCHEME


1. Introduction

     Shareholders are advised that HPF Properties Proprietary Limited (“HPF”), a wholly owned subsidiary of
     Hospitality has, subject to certain conditions precedent, concluded:

     1.1 An agreement (“the scheme purchase agreement”) with Savana Property Proprietary Limited (“Savana”) to
         acquire various sections and exclusive use areas of the Sandton Eye sectional title scheme (“the scheme”)
         (“the scheme acquisition”); and
     1.2 An agreement (“the real right purchase agreement”) with Sandton Isle Investments Proprietary Limited to
         acquire an existing Real Right of Extension in the scheme (“the real right acquisition”).

2. Rationale

     Hospitality’s Radisson Blu Gautrain Hotel (“RBGH”) is part of and comprises the majority of the scheme. The
     RBGH is an upscale hotel comprising of 220 rooms, 8 conference facilities, the Central One Restaurant and Bar, an
     outdoor swimming pool and sun deck, as well as a fitness centre.

     The scheme acquisition, which comprises of retail areas, 146 additional parking bays, roof areas, lift shafts, store
     room areas, office areas, conference and entertainment areas as well as advertising and signage rights, complements
     the existing hotel operations and also results in Hospitality’s participation quota in the scheme increasing from
     58.13% to 81.54%.

     The real right acquisition cedes to HPF the right to extend the scheme by an additional 7 floors, up until
     February 2031.

3.   Funding

     The aggregate purchase consideration of R301 550 000 (“purchase consideration”), will be settled as follows:

     -   R271 395 000 in cash on the transfer date, being the date of registration of the scheme and the real right
         acquisitions to HPF; and
     -   R30 155 000 by way of the issue of Hospitality shares, at the 30 day volume-weighted average price on
         22 June 2017 (“consideration shares”).

4. Conditions precedent

     The scheme acquisition and real right acquisition are subject to the fulfilment or waiver, as the case may be, of the
     following conditions precedent:

     -   HPF providing the conveyancer with a guarantee for the purchase consideration by no later than 31 May 2017;
     -   Competition Commission approval being received by no later than 15 June 2017. This condition precedent
         being extendable up to 31 July 2017;
     -   the real right purchase agreement becoming unconditional by no later than 31 July 2017;
     -   the scheme purchase agreement becoming unconditional by no later than 31 July 2017;
     -   Hospitality obtaining JSE approval for the listing of the consideration shares by no later than 31 July 2017; and
     -     the conveyancer lodging the transfer/registrations of the scheme acquisition and real right acquisition by no
           later than 1 August 2017.

5.   Details of the scheme acquisition

                                                                                            Net operating       Purchase
                                                                                                  income    consideration
         Property name        Address                                         Sector                  (R)             (R)
         Radisson Blu         Corner of Rivonia Road and West Street,
         Gautrain Hotel       Sandton 2196 Johannesburg, Gauteng              Hospitality    19 600 000*     301 550 000
     *Forecast for an indicative 12 month period from the date of transfer.

6.   Value attributed to the scheme acquisition and real right acquisition

     The board of directors of Hospitality is satisfied that the aggregate value attributed to the scheme acquisition and
     real right acquisition is in line with the purchase consideration paid. The directors of the company are not an
     independent valuer and are not registered as professional valuers in terms of the Property Valuers Professional Act
     47 of 2000.

7.   Categorisation

     The scheme acquisition and real right acquisition is, on an aggregated basis, classified as a category 2 transaction
     in terms of the JSE Listings Requirements and accordingly will not require the approval of Hospitality shareholders.

8.   Cautionary announcement

     Shareholders are referred to the further cautionary announcement released on SENS on Wednesday, 29 March 2017
     and are advised to continue to exercise caution when dealing in the company’s securities until a further
     announcement in relation to the proposed transaction is made.

11 April 2017


Sponsor


Java Capital

Date: 11/04/2017 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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