REBOSIS PROPERTY FUND LIMITED - Proposed disposal of properties

Release Date: 15/05/2018 14:59
Code(s): REB REA
 
Wrap Text
Proposed disposal of properties

REBOSIS PROPERTY FUND LIMITED 
(Incorporated in the Republic of South Africa) 
(Registration number: 2010/003468/06) 
JSE share codes: 
REA ISIN: ZAE000240552 
REB ISIN: ZAE000201687 
(Approved as a REIT by the JSE) 
(“Rebosis” or ”the Company”) 
                                                       
 
PROPOSED DISPOSAL OF PROPERTIES 
 
 
1. INTRODUCTION 
 
       Shareholders are hereby advised that the Company, through its wholly-owned subsidiary, 
       Ascension Properties Limited ("the Seller"), concluded a sale agreement ("the Agreement") 
       with Boxwood Property Investment Fund ("the Purchaser"), on 10 May 2018. In terms of the 
       Agreement, the Purchaser will acquire the property letting enterprises in respect of the 
       properties known as 14 Long Street, 45 on Castle, Bergstan Building, Matrix Building, Nedbank 
       Building and Rebosis House (the “Properties”) for an aggregate consideration of R888 000 000 
       (inclusive of VAT at zero percent) (the “Disposal”).  
      
2. THE DISPOSAL 
 
2.1.   Rationale 
      
       The disposal of office buildings forms part of the Company’s strategy to be a retail focused 
       fund and to reduce the Company’s gearing in line with the road-map outlined in the interim 
       results announcement released on the Stock Exchange News Service on 8 May 2018.  The 
       proceeds of the Disposal will be used to reduce the existing debt of the Company.   
      
2.2.   The Disposal consideration 

          In terms of the Agreement, the aggregate Disposal consideration for the Properties is 
          R888 000 000, which amount is inclusive of VAT at the rate of 0% (“Aggregate Disposal 
          Consideration”). 
           
          Each property to be disposed of has been allocated a purchase consideration (the “Individual 
          Disposal Consideration”). The payment of the Individual Disposal Consideration in respect of 
          each property to be disposed of shall be paid by the Purchaser to the Seller against registration 
          of transfer of ownership of the applicable property into the name of the Purchaser (“Transfer 
          Date”). 

          If any of the properties are not transferred into the name of the Purchaser by 30 September 
          2018, the Individual Disposal Consideration in respect of the property/properties in question 
          will escalate at a rate of 8% per annum, calculated and expressed as an effectively daily rate, 
          until the Transfer Date.  
           
          In respect of the Individual Disposal Consideration, the Purchaser shall furnish the Seller with 
          acceptable guarantees. 
       
       
2.3.       Effective date 
            
           The Disposal will become effective on the Transfer Date. 

2.4.       Warranties and other terms 
        
           The Agreement contains representations and warranties by the Seller in favour of the 
           Purchaser which are standard for a transaction of this nature. 
            
           Subject to such warranties, the Properties are to be disposed of “voetstoots". 
            
           The Properties are to be disposed of subject to all conditions of title, restrictions and servitudes 
           registered against the title deeds of the Properties. 

2.5.       The Properties and their related financial information 

           Details of the Properties are as follows: 

            Property name and address                            45 on Castle, 45 Castle Street, Cape Town
            Sector                                               Office 
            Geographical location                                Western Cape 
            Rentable area (m2)                                   9,537m² 
            Weighted average rental per m2                       R137,06/m² 
            Value attributable to the property                   R153 000 000  
            Property name and address                            Bergstan House, cnr Castle and Loop 
                                                                 Streets, Cape Town 
            Sector                                               Office 
            Geographical location                                Western Cape 
            Rentable Area (m2)                                   2,838m2 
            Weighted average rental per m2                       R107,88m2 
            Value attributable to the property                   R28 000 000 
            Property name and address                            Matrix House, cnr Strand and Bree 
                                                                 Streets, Cape Town 
            Sector                                               Office 
            Geographical location                                Western Cape
            Rentable Area (m2)                                   9,001m2 
            Weighted average rental per m2                       R84,36/m2 
            Value attributable to the property                   R81 000 000  
            Property name and address                            Nedbank Centre, cnr Strand and Loop 
                                                                 Streets, Cape Town 
            Sector                                               Office
            Geographical location                                Western Cape 
            Rentable Area (m2)                                   5,905m2 
            Weighted average rental per m2                       R105,24/m2 
            Value attributable to the property                   R68 000 000  
            Property name and address                            Rebosis House, 9 Riebeek Street, Cape 
                                                                 Town  
            Sector                                               Office
            Geographical location                                Western Cape 
            Rentable Area (m2)                                   26,245m² 
            Weighted average rental per m2                       R93,53/m² 
            Value attributable to the property                   R444 000 000  
            Property name and address                            14 Long Street, 14 Long Street, Cape 
                                                                 Town  
            Sector                                               Office 
            Geographical location                                Western Cape 
            Rentable Area (m2)                                   9,975m²
            Weighted average rental per m2                       R102,41/m² 
            Value attributable to the property                   R124 000 000  
        Notes 
        The valuations are for a 12 months forward income from 1 September 2017 to 31 August 2018 
        performed by LDM Valuers on 31 August 2017.  

        The Properties are to be disposed of at a yield of 8,07%, which is accretive to the Company. 
        The proceeds of the Disposal will be utilized to settle debt at 9,50%.  

 
3. CONDITIONS PRECEDENT 
 
      The implementation of the Disposal is subject to the fulfillment or, where applicable, waiver, 
      as the case may be, of the following outstanding conditions precedent: 
       
      - the Purchaser being satisfied with the outcome of its due diligence investigation in respect 
        of the Properties within 15 business days of signature of the Agreement; 
      - the Purchaser obtaining debt finance for the acquisition of 45 on Castle and Rebosis House 
        within 45 days of signature the Agreement. The other properties are not subject to debt 
        finance;  
      - the waiver of a right of first refusal by one tenant in respect of two buildings which it 
        currently occupies within 65 days of the signature of the Agreement; and  
      - within 70 days of signature of the Agreement, the Disposal being approved unconditionally 
        by the competition authorities in terms of the Competition Act, No. 89 of 1998 or, in the 
        event of a conditional approval, on terms acceptable to the parties to the Disposal. 

4. Categorisation  
 
   The Disposal constitutes a Category 2 transaction in terms of the JSE Limited Listings Requirements. 
 
Johannesburg 
15 May 2018 
 
Sponsor 
RAND MERCHANT BANK (A division of FirstRand Bank Limited) 
 

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