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The disposal by Accelerate of Kyalami Downs
ACCELERATE PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2005/015057/06)
Share code: APF ISIN: ZAE000185815
(“Accelerate”, “APF” or the “Company”)
THE DISPOSAL BY ACCELERATE OF KYALAMI DOWNS
1. INTRODUCTION
Shareholders are advised that the Accelerate (the “Seller”) has, entered into a sale
of letting enterprise agreement (the “Agreement”) with HJA Prinia Proprietary Limited
(a subsidiary company of Prinia Asset Management) (the “Purchaser”), to dispose of
Kyalami Downs, Erf 8 & Ptn 1 of Erf 172, Kyalami Park, Gauteng (“Kyalami Downs” or the
“Property”) (“the Transaction”).
2. THE PROPERTY
Kyalami Downs is a convenience shopping centre located in Kyalami, Midrand, Northern
Johannesburg. Kyalami Downs forms part of Accelerate’s retail portfolio acquired by
Accelerate on or about 12 December 2013.
As at 30 September 2019 Kyalami Downs was valued at R 108 727 997and is being sold
for R99 500 000 (ninety-nine million and five hundred thousand Rand) at a yield of 10.5%.
3. THE CONSIDERATION AND APPLICATION OF THE SALE PROCEEDS
The consideration for the Transaction is a total consideration of R99 500 000 split between
R88 000 000 cash and R11 500 000 vendor loan (the “Consideration”). The vendor loan
is payable within 6 months and will earn interest at the prime rate until maturity. APF
intends to utilise the full sale proceeds towards the reduction of debt.
4. RATIONALE FOR THE TRANSACTION AND UPDATE ON BALANCE SHEET
OPTIMISATION STRATEGY
In anticipation of the Fourways Equalisation, whereby Accelerate will own 50% of the
completed Fourways Mall Super Regional Centre, the Company has earmarked
approximately R2,5 billion of non-core properties for sale and set a target loan to value
ratio (“LTV”) of 35%. It is the intention that the proceeds from the sale of these properties
will be used to either reduce debt or buy back Accelerate shares.
Since 31 March 2019, properties to the value of approximately R500 million have been sold
and further sales of approximately R365 million are well advanced, including Kyalami
Downs. Accordingly, the Transaction is consistent with Accelerate’s ongoing balance sheet
optimisation strategy.
While the centre has performed adequately over the years it now requires defensive
capital spend to not only maintain value but also to compete with new centres in the area.
The centre is thus considered non-core and fits in the Fund’s portfolio optimisation
strategy.
5. KEY TRANSACTION TERMS
The effective date for the Transaction will be the date on which the last of the conditions
precedent are fulfilled or waived, as the case may be, which is expected to be during
October 2019.
6. CONDITIONS PRECEDENT
The closing of the Transaction is subject to the following conditions precedent:
• Guarantees to be issued within 30 business days after acceptance of the
Due Diligence investigation; and
• Other necessary consents and approvals customary for a transaction of this
nature.
7. INFORMATION RELATING TO THE PROPERTY
The details of the Property including location, gross lettable area (“GLA”), net rent,
remaining lease term and independent valuation are as follows:
Net
Remaining Last Effective
Property / GLA rent Disposal
Location lease term valuation date of the
Tenant (m2) per m2 Price
(years) (ZAR) ** valuation
*
Erf 8 & Ptn 1 of
Kyalami R
Erf 172, 13,649 R 99 500 R 108 727 30 September
Downs 63.79 / 4.45 years
Kyalami Park, m2 000 997 2019
m2
Gauteng
* The weighted average net rent per m2 (also the profit attributable to the net assets of Kyalami Downs), billed to
tenants as at the date of signature of the sales agreements, .
** Directors valuation as at 30 September 2019 (which the Company is satisfied with) based on cash flows and
forward net income achieved by the property at valuation date.
8. WARRANTIES
The Seller has provided warranties and indemnities to the Purchaser that are standard for
a transaction of this nature.
9. CATEGORISATION OF THE TRANSACTION
In terms of the Listings Requirements of the JSE Limited the Transaction is classified as
a Category 2 transaction for APF and does not require shareholder approval.
Johannesburg
25 October 2019
Sponsor
The Standard Bank of South Africa Limited
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this announcement may be considered forward-looking. Although APF
believes that the expectations reflected in any such forward-looking statements relating to the
Transaction are reasonable. The information has not been reviewed or reported on by the
reporting accountants and auditors and no assurance can be given by APF that such
expectations will prove to be correct. APF does not undertake any obligation to publicly update
or revise any of the information given in this announcement that may be deemed to be forward-
looking.
Date: 25/10/2019 08:45:00
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