OCTODEC INVESTMENTS LIMITED - Renewal of asset and property management agreement

Renewal of asset and property management agreement

OCTODEC INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1956/002868/06)
JSE share code: OCT ISIN: ZAE000192258
(Approved as a REIT by the JSE)
(“Octodec” or the “Company”)


RENEWAL OF ASSET AND PROPERTY MANAGEMENT AGREEMENT

INTRODUCTION
Shareholders are advised that Octodec entered into a new asset and property management agreement with City Property
Administration Proprietary Limited (“CPA” or the “Manager”), effective from 1 July 2018 (the “new APMA”), which
agreement replaces the existing asset and property management agreement between the parties approved by shareholders
on 12 January 2011 and which will terminate on 30 June 2018 ("the old APMA").

SALIENT FEATURES OF THE NEW APMA
In terms of the new APMA, which will terminate on 30 June 2023, CPA will provide the following services to the
Company:

-         asset management services, including services relating to general management, administering property
          acquisitions and sales (including identifying potential transactions), financial management, JSE reporting
          requirements, strategic management, compliance and regulatory management, risk management, internal audit
          and occupational health and safety compliance; and

-         property management services, including services relating to leasing and lease administration, facilities
          management, marketing, parking management, events management, tenant installations, maintenance, utilities,
          projects, renovations, insurance and staffing.

CPA will be obliged to compile a set of Key Performance Indicators (“KPIs”) annually. The KPIs as well as sanctions
imposed for failure to meet these KPIs, will be agreed between CPA and the Company each financial year.

The Manager will be entitled to charge an asset management fee equating to 0.42% per annum of the enterprise value,
calculated monthly, together with, inter alia, fees relating to valuation objections, property acquisitions, maintenance
and repairs, staff supervision, letting commission and collections. Although the revised fixed percentage portion of the
asset management fee is lower compared to the current asset management fee of 0.50%, the additional variable fees will
result in the overall combined asset and property management fee approximating the fees payable in terms of the old
APMA.

In terms of the new APMA, the Company shall be entitled to appoint a full time financial director. Should the Company
choose to make such an appointment, an appropriate adjustment to the fees payable to the Manager shall be made
resulting from a reduction in the services which the Manager is required to perform in terms of the new APMA.

RELATED PARTY TRANSACTION
The conclusion of the new APMA is a related party transaction due to the fact that Sharon Wapnick (Chairman of the
Company) and Jeffrey Wapnick (Managing Director of the Company) are shareholders in both Octodec and CPA.
Furthermore, Sharon Wapnick and Jeffrey Wapnick are directors of both Octodec and CPA, and CPA is a shareholder
in Octodec. Accordingly, the implementation of the new APMA is subject to Octodec obtaining both a fairness opinion
prepared by an independent expert with regard to the new APMA and shareholder approval in terms of the JSE Listings
Requirements. A circular to shareholders of Octodec containing, inter alia, the salient features of the new APMA,
together with a copy of the requisite fairness opinion, as well as a notice of general meeting, will be sent to shareholders
in due course.


20 April 2018


Sponsor
Java Capital

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