CASTLEVIEW PROPERTY FUND LIMITED - Abridged pre-listing statement Listing of Castleview by way of introduction on the Alternative Exchange of the JSE

Release Date: 13/12/2017 15:41
Code(s): CVW
 
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Abridged pre-listing statement – Listing of Castleview by way of introduction on the Alternative Exchange of the JSE

CASTLEVIEW PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2017/290413/06)
JSE share code: CVW
ISIN: ZAE000251633
(“Castleview” or “the company” or “the group”)


ABRIDGED PRE-LISTING STATEMENT – LISTING OF CASTLEVIEW BY WAY OF INTRODUCTION ON THE ALTERNATIVE EXCHANGE OF THE JSE


This abridged pre-listing statement is not an invitation to the public to subscribe for shares, but is issued in compliance
with the Listings Requirements of the JSE, for the purpose of providing information to the public regarding the
business and affairs of the company at the time of listing of all the issued shares in the company by way of
introduction in the “Retail REITs” sector on the Alternative Exchange (“ALTx”) of the JSE (the “listing”).

This announcement contains the salient information in respect of Castleview, which is more fully described in the full
pre-listing statement (“full pre-listing statement”) which will be made available for inspection from today. For a full
appreciation and understanding of Castleview and the listing the full pre-listing statement should be read in its
entirety.

Terms defined in the full pre-listing statement bear the same meaning in this abridged pre-listing statement.

1.   Introduction

     The JSE has granted Castleview a listing of all of its issued ordinary shares in the “Retail REITs” sector on the
     ALTx of the JSE under the abbreviated name: “Castleview”, JSE share code: “CVW” and ISIN: ZAE000251633
     with effect from the commencement of trade on Wednesday, 20 December 2017.

2.   History and nature of business

     Castleview is a newly incorporated company and has been established for the purpose of creating a newly listed
     company which will acquire and/or develop properties either directly or indirectly through subsidiaries with a
     strategy of investing in a diversified portfolio of retail properties in South Africa, providing exposure to
     consumers from a cross-section of income categories, and accordingly does not have a trading history.

     Castleview, through its major subsidiary, FEC Prop, holds the property being Pier 14, which is newly acquired.
     Pier 14 was acquired by Castleview One, a wholly-owned subsidiary of Castleview, through a subscription for
     shares in FEC Prop, which owns the property, such that Castleview One owns 99.99% of the issued shares in
     FEC Prop (its only asset) with effect from 2 October 2017.

3.   Investment and growth strategy

     The Castleview group owns the Pier 14 shopping centre in Port Elizabeth, which was built in 1973 and has
     30 347 m2 of rentable space.

     Castleview will be a retail-focussed fund and intends to invest in a diversified portfolio of retail properties in
     South Africa, providing investors with exposure to consumers from a cross-section of income categories.
     Castleview intends to invest in retail properties which are anchored by high quality national tenants on long
     term, escalating turnover rental leases.

     Castleview intends to grow its asset base by approaching existing retail centre owners who wish to convert their
     existing physical property holdings into tradable shares in a JSE-listed REIT, thereby increasing the size and
     tradability of Castleview shares and also providing greater portfolio diversification.

     Castleview does not intend to engage in new property developments initially but will seek to add value to its
     existing property portfolio through refurbishments and extensions where possible.

     Whilst Castleview is listed as a REIT (and will comply in full with the requirements to maintain REIT status),
     which allows for an efficient flow-through of income, it’s focus will be on net asset value and total return on
     investment, for which a growing NAV and healthy income stream is required. Accordingly, Castleview will
     focus on both income and capital growth as part of its growth strategy.

4.   Prospects

     Historically, the retail property sector has been one of the outperformers in the South African market for a
     number of years, with government grants underpinning consumer spending, notwithstanding tougher economic
     conditions. Castleview (and its subsidiaries) will be a retail-focussed fund and intends to invest in a diversified
     portfolio of retail properties, anchored by high quality national tenants on long term, escalating turnover rental
     leases.

5.   Directors

      Name and age                 James William Andrew Templeton (James) (44)

      Business address             411 The Hills, Buchanan Square, 160 Sir Lowry Road, Woodstock, Cape Town,
                                   7925

      Qualification                B.Comm (Hons) CFA

      Position                     Chief executive officer

      Experience                   James was employed at Barnard Jacobs Mellet, a prominent South African
                                   stockbroker from 1996 to 2003 where he covered various sectors including real
                                   estate. James was the chief executive officer of Emira Property Fund, a JSE
                                   listed REIT, from 2004 to 2015. James was appointed as a director of the
                                   company on 6 July 2017.

      Name and age                 Elana Kruger (36)

      Business address             411 The Hills, Buchanan Square, 160 Sir Lowry Road, Woodstock, Cape Town,
                                   7925

      Qualification                B Compt (Hons) CA (SA)

      Position                     Financial director

      Experience                   Elana started her career as an audit supervisor at Cape Town accounting firm
                                   Nolands in 2006. After spending a year as an audit senior at Haysmacintyre in
                                   London in 2007, she spent seven years at ALTx listed Ububele Holdings, firstly
                                   as group financial manager and later as financial director between 2008 and
                                   2014. She currently provides consulting services to a variety of clients and has
                                   assumed the position of financial director of Castleview.

      Name and age                 Richard Gordon Volks (Richard) (76)

      Business address             8th Floor, 5 St George's Mall, Cape Town

      Qualification                B.A. LLB

      Position                     Chairman, independent non-executive director

      Experience                   Richard was lead property finance attorney for Syfrets Bank and Syfrets Trust
                                   between 1984 and 2000 and was also the chairperson of Board for admission of
                                   attorneys. He is currently employed as a partner at Smith Tabata Buchanan
                                   Boyes specialising in a variety of matters including: Estate planning and Trusts,
                                   Conveyancing, commercial, corporate and property law.

      Name and age                 Avesh Padayachee (36)

      Business address             1 Oyster Catcher, 6 Cambridge Road, Bryanston, Johannesburg, 2196

      Qualification                BComm, LLB, MBA

      Position                     Independent non-executive director

      Experience                   Avesh was a corporate attorney at Webber Wentzel (Linklaters) in Johannesburg
                                   between 2005 and 2010. From 2010 to 2012 he completed his MBA at
                                   University of Pittsburgh, before founding Fibon Energy, a renewable energy
                                   company, in 2012, where he is currently chief executive officer and a director.

      Name and age                 David James Green (David) (55)

      Business address             18 Carlow Road, Parkveiw, Johannesburg 2093

      Qualification                BA LLB

      Position                     Independent non-executive director

      Experience                   David is currently the CEO of ProAfrica Property Services and Chairman of
                                   listed, Acsion Property Fund. He has been involved in the listed Property arena
                                   since 2001 as fund manager for Capital and Centre City property funds which
                                   now largely form part of Hyprop. David is an admitted Advocate.

      Name and age                 Gregory Clifford Bayly (Gregory) (47)

      Business address             Pinotage House, Vineyards Office Estate, 99 Jip de Jager Road, Bellville, 7530

      Qualification                BAcc, BComm (Hons), LLB ACMA, CGMA

      Position                     Independent non-executive director

      Experience                   Gregory is currently the chief investment officer at Southchester Investment
                                   Managers. He was previously the portfolio manager at Gryphon Asset
                                   Management from 1991 to 2007 where he managed and advised on a variety of
                                   properties. Gregory has also worked as an outsourced portfolio manager for
                                   various asset management companies from 2009 to 2011.

     All of the directors are South African nationals


6.   Property management

     The property management function of the company is undertaken internally.

7.   Asset management

     The asset manager, being Castleview Asset Managers, has been appointed to manage the property portfolio.

     The asset manager will manage the property portfolio for an initial period of 10 years after which the asset
     management agreement shall be renewable for a further period of five years from the expiry date and thereafter
     for further consecutive periods of five years. Any such renewal of the asset management agreement must be
     approved by an ordinary resolution of disinterested Castleview shareholders at a general meeting of
     shareholders.

     The asset manager will be entitled to:

       -     a fee equal to 0.5% of the enterprise value, payable monthly; and

       -     a transaction fee equal to 1% of the value of any new assets acquired by the company.

8.   Summarised forecast information

     Given the nature of its business, Castleview uses distribution per share as its key performance measure as it is
     considered a more relevant performance measure than earnings or headline earnings per share.

     Set out below are the summarised forecast statements of comprehensive income (“summarised forecasts”) for
     the period ending 28 February 2018 and the year ending 28 February 2019 (“forecast periods”). The
     summarised forecasts include forecast figures for the duration of the forecast periods.

     The summarised forecasts, including the assumptions on which they are based and the financial information
     from which they are prepared, are the responsibility of the directors of Castleview.

     The summarised forecasts have been prepared in compliance with IFRS and in accordance with Castleview’s
     accounting policies.

                                                                                       Period from
                                                                                  incorporation to             Year ending
      R                                                                           28 February 2018        28 February 2019

      Distributable Income                                                               4 032 987              13 933 869

      Shares in issue at period end                                                     33 000 000              33 000 000
      Weighted average shares in issue                                                  33 000 000              33 000 000

      Earnings and diluted earnings per share                                                 0,08                    0,48
      Headline earnings and diluted headline earnings                                         0,08                    0,48
      per share
      Distribution per share                                                                  0,12                    0,42
      Indicative share price                                                                                          5,00

      The figures set out above are extracted from the detailed forecasts for the period ending 28 February 2018 and
      the year ending 28 February 2019 and have been reported on by the independent reporting accountant, Nolands
      Inc. The detailed forecasts, the independent reporting accountants’ report on the detailed forecasts and the
      assumptions on which the detailed forecasts are based, are set out in the full pre-listing statement.

9.   Salient dates and times

                                                                                                                     2017

      Abridged pre-listing statement released on SENS on                                           Wednesday, 13 December
      Abridged pre-listing statement published in the press                                         Thursday, 14 December

      Listing of shares and the commencement of trading on the JSE                                 Wednesday, 20 December
      (09:00) on

      Notes
      1.    All references to dates and times are to local dates and times in South Africa. These dates and times are subject to
            amendment. Any such amendment will be released on SENS.

10.  Availability of the full pre-listing statement

     Copies of the pre-listing statement may be obtained on the company’s website at www.castleview.co.za from
     Wednesday, 13 December 2017.

13 December 2017


Corporate advisor and sponsor            Legal advisors                 Independent reporting accountants and auditors
Java Capital                             Cliffe Dekker Hofmeyr          Nolands

Date: 13/12/2017 03:41:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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