MAS REAL ESTATE INC - Acquisition of investment property in Romania

Acquisition of investment property in Romania

MAS Real Estate Inc.
Registered in the British Virgin Islands
Registration number 1750199
SEDOL (EMTF): B96VLJ5
SEDOL (JSE): B96TSD2
JSE share code: MSP
ISIN: VGG5884M1041
LEI code: 213800T1TZPGQ7HS4Q13        
(“MAS” or “the Company”)

ACQUISITION OF INVESTMENT PROPERTY IN ROMANIA

INTRODUCTION

In line with the group’s strategy of investing across the broader European market, shareholders are advised that 
MAS has, through a subsidiary of PKM Investments S.á.r.l., entered into a sale and purchase agreement (the “SPA”) 
to acquire from MD CE Holdings Limited and Atrium Turkey Samsun B.V., being two wholly-owned subsidiaries of Atrium
European Real Estate Limited, the entire issued share capital of a special purpose vehicle that owns the retail 
centre known as Militari Shopping Centre (“Militari”), located in Bucharest, Romania (“the acquisition”).

SALIENT TERMS OF THE ACQUISITION

The purchase price for the acquisition is EUR 95.0 million (“purchase price”) to be settled in cash and payable upon
fulfilment of certain conditions precedent to the SPA.

Militari is located west of Bucharest’s city centre. Bucharest is the capital city of Romania and has a population 
of 2.1 million. Militari has benefitted from extensive residential densification in its immediate surroundings since 
its opening in 2009 and benefits from an aggregate catchment of approximately 294,000 people within a 45 minute drive.
Current residential schemes under development will add a further 4,000 apartments in the immediate vicinity, with
scope for significant continued development in the area. This is expected to lead to strong growth in footfall.

Militari has 53 tenants spread across 56,416 square metres of gross lettable area, of which 53,666 square metres
relates to retail and 2,750 square metres to office space, in addition to 2,500 parking spaces. The annual net
operating income of Militari is EUR7.1 million at a weighted average rental of EUR10.6 per square metre per month.
Militari was opened in 2009 and is anchored by Auchan (hypermarket), Praktiker (DIY), Decathlon (sports goods) and
various international fashion brands such as H&M, C&A, Reserved, New Yorker, LC Waikiki, Pepco, Deichmann,
Hervis, Humanic, Koton, Takko and many others. The current tenant mix has a weighted average lease term of
5 years from April 2018 and the site is fully occupied. Food and grocery tenants contribute 26%, while fashion and
lifestyle tenants contribute 49% of passing rent.

The asset provides stable underlying income over the medium term with good prospects for future growth that will
drive MAS’ direct investment return. It is expected that lease extensions and some capital expenditure will enhance
income levels. The prospect of new competition is low with nearby residential developments contributing to drive
growth in footfall. There is capacity to significantly extend and/or re-develop the centre as demand grows in the
medium term and beyond.

The purchase price of the shares reflects the fair value attributed to Militari as determined by the directors of MAS.
The directors of MAS are not independent or registered as professional valuers or professional associate valuers in
terms of the South African Property Valuers Profession Act 2000 or otherwise. The net operating income detailed
above approximates the net profits attributable to the acquisition.

CONDITIONS PRECEDENT

The acquisition is subject to conditions precedent that are standard for a transaction of this nature, as well as the
obtaining of certain permits from the relevant local authorities in Bucharest.

Completion of the acquisition is expected to take place within the next three months.

CO-INVESTMENT AGREEMENT WITH PRIME KAPITAL

The acquisition has been undertaken in terms of a long-term co-investment agreement that MAS has entered into with
Prime Kapital Limited. MAS' effective economic interest in the acquisition is the equivalent of an 80% direct
participation in the performance of Militari and a 20% participation at the weighted average cost of external funding
achieved by the joint venture with Prime Kapital, in line with the previously announced co-investment agreement.
Prime Kapital has sourced and will manage this acquisition under the co-investment agreement.
PIPELINE

A number of further investment opportunities are presently being actively pursued and the market will be further
updated as those discussions are concluded.

CATEGORISATION OF THE ACQUISITION

The acquisition is categorised as a Category 2 transaction in terms of the JSE Listings Requirements and as such is
not subject to shareholder approval.

MAS is listed on the Main Board of the JSE and is listed and admitted to trading on the Euro MTF market of the
Luxembourg Stock Exchange.

30 April 2018

For further information please contact:
Helen Cullen, Company Secretary, MAS Real Estate Inc.                          +44 1624 625000
Java Capital, JSE Sponsor                                                      +27 11 722 3050
Charl Brand, M Partners, Luxembourg Stock Exchange Listing Agent               +352 263 868 602
Investor Relations, Lizelle du Toit, Instinctif Partners                       +27 82 465 1244

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