Wrap Text
Disposal of Makhaza Shopping Centre to a related party
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 OF MAKHAZA SHOPPING CENTRE TO A RELATED PARTY
1. Introduction and rationale
Shareholders are advised that Castleview has, through its wholly-owned subsidiary Interurban Willowbridge (RF)
Proprietary Limited (the "Seller"), concluded a sale and purchase agreement to dispose of Erf 59034 Khayelitsha,
Situate in the City of Cape Town Cape Division, Province of the Western Cape (the "Property"), as well as the
assets and liabilities attached to the Property (collectively, the "Business") to Mirlem IP Proprietary Limited
("Mirlem" or the "Purchaser") (the "Disposal"). The ultimate beneficial owners of Mirlem are Wilhelmus
Loubser and Paul Munday.
The Disposal is subject to the fulfilment of the conditions precedent detailed in paragraph 2 below and shall
become effective on the date of registration of transfer of the Property into the name of the Purchaser (the "Date
of Transfer").
The shopping centre known as Makhaza Shopping Centre is constructed on the Property and is an 8 794m2 retail
centre located in Khayelitsha, Cape Town.
Castleview believes that the proceeds of the disposal of the Property can be used to generate returns greater than
the Company will receive by continuing to hold the Property, and therefore intends to sell the Property on the
terms indicated in this announcement.
2. Terms of the Disposal
2.1. Purchase consideration
The consideration payable for the Business is R140 000 000 (the "Purchase Price"), which shall be paid
to the Seller in cash on the Date of Transfer.
2.2. Conditions precedent
The Disposal is subject to the fulfilment of the following conditions precedent:
- the Seller obtaining board, shareholder (if required) and bank resolutions approving the Disposal
within 3 months of the date of signature of the sale and purchase agreement;
- the Purchaser obtaining a board resolution approving the purchase of the Business within 4 weeks
of date of signature of the sale and purchase agreement; and
- receipt of approval from the Competition Commission to the extent applicable.
The Seller and the Purchaser may, in writing, extend the dates of fulfilment of any of the conditions
precedent to such further date/s as they may agree, in writing.
2.3. Other material terms
The agreement in respect of the Disposal contains warranties which are normal for a transaction of this
nature.
The Seller shall prepare an adjustment account in respect the Business, including the Property, as at the
Date of Transfer (the "Adjustment Account") and deliver the Adjustment Account to the Purchaser.
The Adjustment Account shall take into account the following in respect of the Business and the Property:
- all rentals and other income due and payable prior to the Date of Transfer and collected after the
Date of Transfer;
- all amounts of municipal service fees, surcharges on fees, property rates, municipal tax and other
municipal charges for any period before the Date of Transfer or pre-paid for any period after the
Date of Transfer;
- the amounts of any levies, including special levies not paid for any period before the Date of Transfer
or pre-paid for any period after the Date of Transfer;
- any tenant's deposit, excluding interest and the value of arrear indebtedness of the tenant to the
Seller, arising prior to the Date of Transfer;
- all rentals and other income pre-paid to the Seller for the period after the Date of Transfer; and
- any other expenses reasonably incurred during the periods before and after the Date of Transfer.
Payment of any amounts due to either the Seller or the Purchaser in terms of the Adjustment Account shall
not constitute part of the Purchase Price and shall be effected separately from the payment of the Purchase
Price.
3. Property specific information
Weighted
average Purchase Value attributed to
basic rental consideration the Property as at
Property Geographical GLA per m2 for the 31 March 2023
name location Sector (m2) (R/m2) Business (R) (R)
Makhaza Khayelitsha, Retail 8 794 152.03 140 000 000 136 050 000
Shopping Western Cape
Centre
The valuation of the Property has been carried out by Spectrum Valuations and Asset Solutions Proprietary
Limited ("Spectrum") as at 31 March 2023. Spectrum is an external valuer as defined in section 13 of the JSE
Listings Requirements.
The purchase price payable for the Business (including the Property) is considered to be its fair market value, as
determined by the directors of the Company. The directors of the Company are not independent and are not
registered as professional valuers or as professional associate valuers in terms of the Property Valuers Profession
Act, No.47 of 2000.
The net profit after tax attributable to the Business in Castleview's consolidated statement of comprehensive
income for the 13 month financial year ended 31 March 2023 was R12.63 million.
4. Related party transaction
Paul Munday and Wilhelmus Loubser, who are the ultimate beneficial owners of Mirlem, also form part of the
ultimate beneficial ownership of I Group Investments Proprietary Limited, a material shareholder of Castleview.
The Disposal therefore constitutes a transaction with related parties, but due to its size in relation to Castleview's
market capitalisation, only requires announcing and is not subject to shareholder approval.
26 June 2023
Designated advisor
Java Capital
Date: 26-06-2023 12:00:00
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