TRADEHOLD LIMITED - CATEGORY II ACQUISITION BY A WHOLLY OWNED SUBSIDIARY OF TRADEHOLD

CATEGORY II ACQUISITION BY A WHOLLY OWNED SUBSIDIARY OF TRADEHOLD

Tradehold Limited
(Incorporated in the Republic of South Africa)
(Registration number 1970/009054/06)
JSE code: TDH
ISIN: ZAE000152658
(“TDH”)

CATEGORY II ACQUISITION BY A WHOLLY OWNED SUBSIDIARY OF TRADEHOLD

The shareholders of TDH are advised that Moorgarth Holdings Luxembourg
S.a.r.l. (“Moorgarth”), a wholly-owned member of the TDH group of
companies, acting through its wholly-owned subsidiary, Inception Euston
S.a.r.l. (“the Purchaser”) has concluded agreements (“the Acquisition
Agreements”) to acquire 41 Chalton Street and 43 Chalton Street London,
NW1 1JD (“the Acquisition Properties”) from N J A Limited and Peawalk
Properties Limited ("the Vendors”) respectively, as a single indivisible
transaction (“the Transaction”).

In addition, the Purchaser has an in principle agreement with The
Boutique Workplace Company (“TBWC”), the serviced office space provider
in the TDH group of companies, to rent all of the Acquisition Properties
(“the Rental Agreement”).

Salient features of the Acquisition Agreements:

In terms of the Acquisition Agreements the Purchaser will pay N J A
Limited a cash consideration of £7,155,600 in respect of 41 Chalton
Street and Peawalk Properties Limited a cash consideration of £6,194,400
in respect of 43 Chalton Street. The costs of the Transaction,
including stamp duty, land costs and agent’s commission are expected to
be £907 800.

The Acquisition Properties are acquired subject to occupational leases
currently in place with two tenants occupying 59% of the Acquisition
Properties.   These leases are due to terminate twelve months from the
completion date of the Acquisition Agreements.

Following the closing of the Acquisition Agreements (“Closing”), which
Closing is subject to, amongst others, financing and other conditions
standard to a transaction of this nature, the vacant portions of the
Acquisition Properties (41%) will be refurbished, which should take
approximately 5 months. Thereafter, TBWC will rent the refurbished
portion. Once the current tenants have vacated the Acquisition
Properties, the balance of the properties will be refurbished prior to
TBWC’s occupation, which should take 2 months.

Salient details of the Acquisition Properties:

The Acquisition Properties are both freehold. Their combined net
internal area is 17,070 sq ft (1,586 m2). The passing rent in terms of
the leases currently in place is £263,247 per annum which equates to an
average rent of £166 per m2 per annum. Consequently 7,408 sq ft (688 m2)
is currently vacant. The Acquisition Properties have:

-     Contracted rental   income   of   £263,247   per   annum   from   the   two
      existing tenants.
-     Near contracted rental income with TBWC, which will pay an
      initial rent of £296,320 per annum for the currently vacant part
      of 41 Chalton Street rising to £1,020,000 per annum equating to
      an average rent of £643 per m2 per annum for the whole of 41 and
      43 Chalton Street. TBWC will receive a rental reduction of 50%
      for its first 12 months of occupation.


Rationale for the Transaction:

The Acquisition Properties are in an attractive area of London in the
immediate proximity of Euston station and close to King’s Cross station
with good capital growth potential, and are well suited for occupation
by TBWC.

Financial Forecast:

During the Purchaser’s first year of ownership of the Acquisition
Properties the forecast net operational income from the current tenants
and TBWC is £439k and forecast net profit after tax is £128k.

After the first 12 months of full occupation by TBWC following the
expiry of the rental reduction, the forecast operational net income is
£1,020k p.a. and the forecast net profit after tax £627k p.a.

The above forecast has been prepared by the management of Moorgarth and
has not been reviewed by the latter’s auditors nor by the auditors of
TDH.

Independent Valuation of the Acquisition Properties:

The Acquisition Properties are being independently valued by Strutt and
Parker, Royal Chartered Surveyors in the United Kingdom (“Independent
Valuer”).   Shareholders will be advised of the values placed on the
Acquisition Properties by the Independent Valuers in due course.

The effective date:

The Transaction is anticipated to be effective on Closing.

Categorisation:

As at the date of the conclusion of the Acquisition Agreement, being
19 September 2017, the aggregate purchase price of the Acquisition
Properties represented 5.1% of TDH’s market capitalisation and the
Transaction is therefore deemed to constitute a Category 2 transaction
in terms of section 9 of the Listings Requirements of the JSE.

The Transaction is not considered a related-party transaction in terms
of section 10 of the Listings Requirements of the JSE.

Shareholders will be advised of the value placed on the Acquisition
Properties by the Independent Valuer and achievement of Closing, in due
course.
Cape Town
17 October 2017

Sponsor
Bravura Capital Proprietary Limited

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