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Disposal by Emira of its Western Cape portfolio
CASTLEVIEW PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2017/290413/06)
JSE share code: CVW
ISIN: ZAE000251633
(Approved as a REIT by the JSE)
("Castleview" or the "Company")
DISPOSAL BY EMIRA OF ITS WESTERN CAPE PORTFOLIO
1. Introduction and rationale
Shareholders are advised that Emira Property Fund Limited ("Emira"), a 59.3%-owned subsidiary of Castleview,
and Emira's wholly owned subsidiaries (Lowmer Investments Proprietary Limited, Freestone Property
Investments Proprietary Limited, Monagon Properties Properietary Limited and Radidough Prop 509 Proprietary
Limited) have agreed to dispose of 13 predominantly industrial and office properties situated in the Western Cape
(the "Properties") to Spear REIT Limited ("Spear") for an aggregate consideration of R1 146 000 000 (inclusive
of VAT at a rate of 0%) (the "Purchase Consideration") (the "Transaction").
Emira is a diversified REIT listed on the Main Board of the JSE with a portfolio of local and offshore assets.
Spear is a JSE-listed REIT, which invests in high-quality income generating real estate across the Western Cape.
The Transaction forms part of Emira's strategy to recycle capital. The net proceeds of the Transaction will
initially be used to reduce Emira's debt and subsequently to fund new acquisitions in accordance with Emira's
investment policy.
2. Terms of the Transaction
The Properties comprise 12 freehold properties, in respect of which Emira has concluded a sale of rental
enterprises agreement, and one leasehold property, known as Freeway Business Park, in respect of which Emira
has concluded a separate sale of rental enterprises agreement (the "Freeway Business Park Sale Agreement").
The effective date of the Transaction in respect of each Property will be the date of registration of transfer of the
Property into Spear's name, and in the case of Freeway Business Park, the date on which the deed of assignment
of the notarial lease in respect of Freeway Business Park is registered (the "Transfer Date").
The Purchase Consideration will be paid in cash against registration of transfer of each Property (and registration
of the aforesaid deed of assignment in the case of Freeway Business Park). Emira and Spear will use their
respective commercial endeavours to ensure that transfer of each of the Properties is registered on the same day,
but the Transaction is not conditional upon such simultaneous registration.
In the event that transfer of any Property occurs after 1 October 2024, other than as a result of any delays caused
by Emira or any cause not within the reasonable control of Spear and Emira, the purchase consideration in respect
of such Property will increase by 0.5% per month (not compounded and reduced pro rata for any period of less
than a month).
Emira has agreed to pay a transaction fee of R22 500 000 to Spear, which will be paid by Emira on the Transfer
Date.
If Emira wishes to incur any capital expenditure on any of the Properties prior to the Transfer Date, it will obtain
the prior written approval of Spear. Spear will refund Emira such capital expenditure up to a maximum amount
of R15 000 000.
The lease in respect of 1 468m2 of the property known as 9 Long Street is set to expire on 31 October 2024. Emira
has provided Spear with a rental guarantee to the extent that the premises become vacant during a 24-month
period commencing on the Transfer Date. The rental guarantee will cover an agreed gross rental, as well as any
shortfall between such agreed gross rental and the rentals contracted for by Spear.
The Transaction remains subject to the fulfilment, or waiver (as the case may be) of the following conditions
precedent:
- PRASA, as the owner of Freeway Business Park, consents to the transfer of the notarial lease in respect of
the Freeway Business Park from Emira to Spear;
- Spear receives final approval of the funding of not less than 50% of the Purchase Consideration. In principle
approval was granted prior to the signature of the agreements in respect of the Transaction;
- Spear has complied with all JSE Listings Requirements in respect of the Transaction and obtains
shareholder approval for the Transaction, as required by the JSE Listings Requirements; and
- Approval by the Competition Authorities.
The agreements contain undertakings, warranties and indemnities which are normal for a transaction of this
nature.
3. Property specific information
Property name Sector GLA (m2) Weighted average rental Purchase price
(R/m2)(1) attributable to
each Property
(R)
14-16 Boston Circle Industrial 7 899 71.18 57 000 000
9 Long Street Office 9 528 140.51 133 150 000
Boundary Terraces Office 8 020 230.58 210 500 000
Chiappini House Office 1 024 187.72 20 000 000
Freeway Park Industrial 7 753 102.56 69 000 000
Hamilton House Office 3 247 165.53 60 750 000
Newlands Terraces Office 4 531 140.74 73 600 000
Northpoint Industrial Park Industrial 16 415 81.44 141 000 000
Parklands Health Centre Urban Retail 2 487 205.65 49 500 000
Steelpark Industrial Park Industrial 9 362 54.34 54 000 000
The Studios Atlas Gardens Industrial 9 301 72.16 64 500 000
The View - Tygervalley Office 6 448 203.93 122 500 000
Waterside Place Offices 4 840 152.34 90 500 000
Note:
1. Weighted average rental per m2 for March 2024, excluding storage, patio, balcony and parking rental and recoveries.
The purchase price of the Properties is considered to be fair market value, as determined by the directors of Emira.
The directors of Emira are not registered as professional advisors or as professional associate advisors in terms
of the Property Valuers Profession Act, No 47 of 2000.
4. Financial information
The net expected cash proceeds payable to Emira from the Transaction are approximately R1 120 900 000. The
net operating income of the Properties, based on the unaudited financial statements of Emira (prepared in terms
of IFRS) for the six months ended 31 September 2023, is c.R50 040 459.
5. Categorisation
The Transaction constitutes a category 2 disposal for Castleview in terms of the JSE Listings Requirements and
is therefore not subject to shareholder approval.
2 April 2024
Designated advisor
Java Capital
Date: 02-04-2024 08:30:00
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