SA CORPORATE REAL ESTATE LIMITED - Notification of the payment of the distribution no. 10 for the period 1 July to 31 December 2019 in two tranches

Notification of the payment of the distribution no. 10 for the period 1 July to 31 December 2019 in two tranches

SA CORPORATE REAL ESTATE LIMITED
(Incorporated in the Republic of South Africa)
Share Code: SAC ISIN Code: ZAE000203238
(Registration number 2015/015578/06)
("SA Corporate" or “the Company”)
REIT status approved.

NOTIFICATION OF THE PAYMENT OF THE DISTRIBUTION NO. 10 FOR THE PERIOD 1 JULY TO 31 DECEMBER 2019 IN TWO TRANCHES

Notification

Shareholders are referred to the announcements released on SENS on Tuesday, 10 March 2020 relating
to the declaration of a final gross cash distribution of 17.66 cents per SA Corporate share ("share") in
respect of the income distribution period 1 July 2019 to 31 December 2019 (“final distribution”), and on
Monday, 30 March 2020 relating to the postponement of the payment of the final distribution to Tuesday,
28 April 2020. The final distribution declared to shareholders is an aggregate amount of R444 101 687.98.

Following the declaration of a 21 day lockdown on 23 March 2020, which has been further extended to
30 April 2020, with the possibility of further extensions should the Covid-19 pandemic not be contained,
and indications from a number of the Company's tenants, including certain national tenants, that they
intend to withhold some or all of their rental payments during the period of the lock down, the board of
directors (“the Board”) has had to take steps to ensure that the Company preserves its cash reserves and
liquidity position during this very uncertain economic period in South Africa.

Consequently, shareholders are advised that the Board has applied a further solvency and liquidity test
("solvency and liquidity test") as prescribed by the Companies Act, No 71 of 2008 ("Companies Act"),
and, to ensure the continued liquidity of the Company should certain scenarios eventuate, the Board has
resolved to pay the final distribution to shareholders in two tranches, as follows:

1.    an aggregate of R204 211 585.98 will be payable on Monday, 11 May 2020. This translates into a
      gross cash payment of 8.12061 cents per share (“Tranche 1”); and

2.    payment of the balance in the aggregate amount of R239 890 102.00 (“Tranche 2”) is postponed
      and will be made during September 2020.

The Board will be in a better position to assess the financial situation of the Company in late August 2020,
after the results of the first six months of 2020 have been determined. However, in terms of section 46(3)
of the Companies Act, it will be necessary again to apply the solvency and liquidity test in September 2020
and even though Tranche 2 remains payable, the payment thereof will be subject to the resolutive
condition that if the requirements of the solvency and liquidity test cannot be met at that time, the
payment of Tranche 2 will have to be postponed by such further period as may be required in the
circumstances. The Board will, however, take such steps as are reasonably possible to ensure that Tranche
2 is paid to shareholders as soon as circumstances permit.

The payment of Tranche 1, together with the payment of the interim distribution for the 6 month period
ending 30 June 2019, ensures compliance with the distribution provisions for a REIT as set out in the JSE
Listings Requirements, which requires a REIT to distribute at least 75% of its total distributable profits
within four months of its year end. The JSE has granted a short relaxation of the provisions of section
13.47(a) of the JSE Listings Requirements to enable the Company to pay Tranche 1 in accordance with the
timetable set out below.

Pertinent details relating to Tranche 1

Salient dates and times
The salient dates and times relating to the payment of Tranche 1 as announced on 30 March 2020 remain
applicable and are included below for ease of reference:

Last date to trade cum distribution                          Tuesday, 5 May 2020
Shares will trade ex-distribution                            Wednesday, 6 May 2020
Record date to participate in the distribution               Friday, 8 May 2020
Payment of distribution                                      Monday, 11 May 2020

Share certificates may not be dematerialised or rematerialised between Wednesday, 6 May 2020 and
Friday, 8 May 2020, both days inclusive.

Tax implications of the payment of the final distribution in tranches

As SA Corporate has REIT status, shareholders are advised that the payment of the final distribution in
two tranches, on the basis provided above, will meet the requirements of a "qualifying distribution" for
the purposes of section 25BB of the Income Tax Act.

The distributions in respect of shares will be deemed to be dividends for South African tax purposes, in
terms of the Income Tax Act. The distributions received by or accrued to South African tax resident
shareholders must be included in the gross income of such shareholders and are not exempt from income
tax (in terms of the exclusion to the general dividend exemption, contained in paragraph (aa) of section
10(1)(k)(i) of the Income Tax Act), as they are dividends distributed by a REIT. The effect is that the
distributions are taxable in the hands of South African tax resident shareholders.

These distributions are, however, exempt from dividend withholding tax in the hands of South African tax
resident shareholders, provided that the South African resident shareholders have provided the following
forms to their CSDP or broker, as the case may be, in respect of uncertificated shares, or the Company's
transfer secretaries, in respect of certificated shares:

•     a declaration that the distribution is exempt from dividends tax; and
•     a written undertaking to inform the CSDP, broker or the transfer secretaries, as the case may be,
      should the circumstances affecting the exemption change or the beneficial owner ceases to be the
      beneficial owner, both in the form prescribed by the Commissioner for the South African Revenue
      Service.

SA Corporate shareholders are advised to contact their CSDP, broker or the transfer secretaries, as the
case may be, to arrange for the abovementioned documents to be submitted prior to payment of the
distribution, if such documents have not already been submitted.

Notice to non-resident shareholders

The tranches of the final distribution received by non-resident shareholders will not be taxable as income
and instead will be treated as ordinary dividends which are exempt from income tax in terms of the
general dividend exemption in section 10(1)(k)(i) of the Income Tax Act. However, distributions received
by a non-resident shareholder from a REIT are subject to dividend withholding tax at the rate of 20%,
unless the rate is reduced in terms of any applicable agreement for the avoidance of double taxation
("DTA") between South Africa and the country of residence of the shareholder.

Assuming dividend withholding tax will be withheld at a rate of 20%, the net dividend amount in respect
of Tranche 1 due to non-resident shareholders is 6.49649 cents per share. A reduced dividend withholding
rate, in terms of the applicable DTA, may only be relied on if the non-resident shareholder has provided
the following forms to their CSDP or broker, as the case may be, in respect of uncertificated shares, or the
transfer secretaries, in respect of certificated shares:

•     a declaration that the dividend is subject to a reduced rate as a result of the application of a DTA;
      and
•     a written undertaking to inform the CSDP, broker or the transfer secretaries, as the case may be,
      should the circumstances affecting the reduced rate change or the beneficial owner ceases to be
      the beneficial owner, both in the form prescribed by the Commissioner for the South African
      Revenue Service.

Non-resident shareholders are advised to contact their CSDP, broker or the transfer secretaries, as the
case may be, to arrange for the abovementioned documents to be submitted prior to payment of the
distribution if such documents have not already been submitted, if applicable.

Pertinent details relating to Tranche 2

Full details relating to the payment of Tranche 2 will be announced in due course.

Cape Town
20 April 2020

Sponsor
Nedbank Corporate and Investment Banking

Attorneys and Tax Advisers
Cliffe Dekker Hofmeyr Inc

Date: 20-04-2020 11:42:00
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