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Disposal of Western Cape portfolio
EMIRA PROPERTY FUND LIMITED
Incorporated in the Republic of South Africa
(Registration number 2014/130842/06)
JSE share code: EMI ISIN: ZAE000203063
JSE Bond Company Code: EMII
LEI Number: 3789005E23C6259EAE70
(Approved as a REIT by the JSE)
("Emira" or "the Company")
DISPOSAL OF WESTERN CAPE PORTFOLIO
1. INTRODUCTION AND RATIONALE
Shareholders and noteholders are advised that Emira and its wholly owned subsidiaries
(Lowmer Investments Proprietary Limited, Freestone Property Investments Proprietary Limited,
Monagon Properties Proprietary Limited and Rapidough 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").
Spear is a 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 the Emira group 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. Spear will use the transaction fee at its discretion.
If Emira wishes to incur any capital expenditure on any of the properties in the Portfolio prior
to the Transfer Date, and Spear consents thereto in writing, 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 Purchase price
average rental attributable to
(R/m2)1 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
Notes
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 from the Transaction are approximately R1 120 900 000. The
net operating income (excluding straight-lining rental income adjustments) 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.R49 950 304.
5. CATEGORISATION OF THE TRANSACTION
The Transaction is categorised as a Category 2 transaction for Emira in terms of the JSE Listings
Requirements and as such is not subject to Emira shareholder approval.
Bryanston
2 April 2024
Sponsor
Questco Corporate Advisory Proprietary Limited
Debt sponsor
Rand Merchant Bank (a division of FirstRand Bank Limited)
Date: 02-04-2024 08:30:00
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