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Acquisition of distribution warehouse based in the United Kingdom
Atlantic Leaf Properties Limited
(Incorporated in the Republic of Mauritius)
(Registration Number: 119492 C1/GBL)
SEM share code: ALPL.N0000
JSE share code: ALP
ISIN: MU0422N00009
www.atlanticleaf.mu
(“Atlantic Leaf” or the “Company”)
ACQUISITION OF DISTRIBUTION WAREHOUSE BASED IN THE UNITED KINGDOM
INTRODUCTION
Shareholders are advised that, on 20 December 2017, Atlantic Leaf, through its wholly-owned
subsidiary, Trido Limited (collectively, “Atlantic Leaf”), concluded agreements and simultaneously
completed the acquisition of a distribution warehouse at Crewe Gates Industrial Estate, Crewe in the
United Kingdom (the “Property”) from JCAM Commercial Real Estate Property XV Limited (the
“Seller”) (the “Transaction”).
RATIONALE FOR THE TRANSACTION
The acquisition of the Property is consistent with Atlantic Leaf’s strategy of investing in real estate
assets that deliver good returns for investors through both predictable income from long term leases and
capital growth.
The Property is located in the established distribution area of Crewe Gates Industrial Estate which
houses up to 100 occupiers over 165 acres of land including tenants such as Bentley Motors and Fujitsu.
The area provides excellent transport connections throughout the North West of England via the M6
motorway.
The Property is fully let to Buffaload Logistics Limited (the “Tenant”), a well-established logistics
company with various distribution centres across the United Kingdom, that specialises in the chilled
distribution sector. A section of the Property is also sub-let to Bakkavor Foods Limited until June 2022
(the “Sub-Tenant”), a wholly-owned subsidiary of Bakkavor Holdings Limited, a leading international
manufacturer of freshly prepared foods, listed on the London Stock Exchange.
The Property has a fully repairing and insuring (FRI) lease expiring in June 2027, providing an
unexpired lease term of 9.5 years. The current passing rent is GBP 850,000 per annum reflecting a low
GBP 4.12 per square foot. The lease provides for an open market rent review in 2022. The current
estimated rental value for the area on new build sheds is between GBP 5.50 and GBP 6.00 per square
foot.
SALIENT TERMS OF THE TRANSACTION
The purchase consideration for the Transaction is GBP 11,380,000 (excluding transaction related costs).
Under the terms of the Transaction agreements, the purchase consideration agreed with the Seller
excludes an adjustment to compensate Atlantic Leaf for a rent-free period agreed with the Tenant,
resulting in a net purchase consideration of approximately GBP 11,130,000 (the “Net Purchase
Consideration”). The Net Purchase Consideration and transaction related costs will be settled through
existing cash reserves of Atlantic Leaf, however it is intended that debt and equity capital will be raised
at the appropriate time in the future to fund this acquisition.
All conditions precedent relating to the Transaction have been completed. The Seller has provided
normal warranties and indemnities for a transaction of this nature.
DETAILS OF THE PROPERTY
Key information regarding the Property is set out below:
Property location Crewe, United Kingdom
Property valuation GBP 11,380,000 (before adjusting for rent compensation)
Sector Industrial
Tenant Buffaload Logistics Limited
Rentable area 204,128 ft2 (18,964 m²) (additional canopy of 4,369 ft2)
Rental (p.a.) GBP 850,000
Rental per square metre GBP 44.82
Rental per square foot GBP 4.12
Weighted lease expiry (years) 9.5
Net initial yield 7.0%
Estimated transaction related costs GBP 790,000
The transaction costs largely comprise of stamp duty land tax payable in the United Kingdom of
approximately GBP 550,000. The value attributed to the Property is considered to be the fair market
value, as determined by the board of directors of Atlantic Leaf (“the Board”). The Board is not
independent and its members are not registered as professional valuers or as professional associate
valuers in terms of the Property Valuers Profession Act, No 47 of 2000.
FINANCIAL INFORMATION
Set out below is the financial forecast of Atlantic Leaf’s acquisition of the Property (the “forecast”) for
the two and a half months ending 28 February 2018 and the year ending 28 February 2019 (the “forecast
period”).
The forecast has been prepared on the basis that the effective date of the Transaction was 20 December
2017 and that it includes forecast results for the duration of the forecast period.
The forecast, including the assumptions on which it is based and the financial information from which
it has been prepared, is the responsibility of the directors of the Company. The forecast has not been
reviewed or reported on by independent reporting accountants or auditors.
The forecast presented in the table below has been prepared in accordance with the Company’s
accounting policies, which are in compliance with International Financial Reporting Standards; and
represent only the forecast income from the Transaction.
Forecast for the Forecast for the
2 ½ months year
ending ending
28-Feb-18 28-Feb-19
Property net rental 169 667 827 552
Other operating expenses (excluding transaction costs) (43 026) (286 223)
Profit before taxation 126 641 541 329
Taxation (6 043) (63 731)
Profit for the period 120 598 477 598
Distributable earnings 120 598 477 598
The forecast incorporates the following material assumptions in respect of revenue and expenses:
1. Property net rental has been calculated by straight lining the rent due from the Tenant over the
remaining period of the lease, and takes into account the rent-free period originally granted by the
Seller.
2. Rental income comprises contracted revenue only, which is based on existing lease agreements
including stipulated increases, all of which are valid and enforceable. It is assumed that there will
be no unforeseen economic factors that will affect the lessee’s ability to meet their commitments
in terms of existing lease agreements.
3. Senior debt will be drawn down in the middle of January 2018 at an amount equal to approximately
55% of the Property value with a cost of debt of approximately 2.47% p.a (Libor plus 1.60% plus
amortised finance costs).
4. Other operating expenses include expenditure which has been forecast by management on a line-
by-line basis based on management’s expectations. This expenditure includes the forecasted debt
financing costs.
5. The Property is recognised at cost being the Purchase Consideration and it is assumed that no
impairment is recognised.
CATEGORISATION OF THE TRANSACTION
The Transaction is classified as a category 2 transaction in terms of paragraph 9.5(a) of the JSE Listings
Requirements and accordingly does not require approval by Atlantic Leaf’s shareholders. The
Transaction constitutes an undertaking in the ordinary course of business of Atlantic Leaf and therefore
does not fall under the scope of Chapter 13 of the Listing Rules of the Stock Exchange of Mauritius Ltd
(“SEM”).
By order of the Board
21 December 2017
For further information please contact:
South African JSE Sponsor
Java Capital +27 11 722 3050
Corporate secretary
Intercontinental Trust Limited +230 403 0800
SEM authorised representative and Sponsor
Perigeum Capital Ltd +230 402 0890
This notice is issued pursuant to the JSE Listings Requirements, SEM Listing Rule 11.3 and the
Mauritian Securities Act 2005. The Board of Atlantic Leaf accepts full responsibility for the accuracy
of the information contained in this announcement.
Date: 21/12/2017 11:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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