Sharenet Sites 
Sharenet Sites
Update on the disposal of properties by wholly owned subsidiaries of Freedom
FREEDOM PROPERTY FUND LIMITED
Incorporated in the Republic of South Africa
Registration number: 2012/129186/06
Share code: FDP
ISIN: ZAE000185260
(“Freedom” or “the Company” or “the Group”)
UPDATE ON THE DISPOSAL OF PROPERTIES BY WHOLLY OWNED SUBSIDIARIES OF FREEDOM
1. INTRODUCTION
1.1 Shareholders are referred to the following announcements issued by the Company:
1.1.1 SENS announcement dated 29 May 2019 – in which the board of directors of Freedom
(“Board”) announced that Freedom had, through its wholly owned subsidiaries,
Zambesa Investments Proprietary Limited (“Zambesa”) and Tubatse Estate Proprietary
Limited (“Tubatse Estate”), concluded sales of property agreements (“Agreements”)
with Cecilo Investments CC (“Cecilo”) relating to:
1.1.1.1 the disposal by Zambesa of 8 residential units plus 33 serviced stands in the
sectional scheme known as Tubatse Homes SS 758/2017 to Cecilo (“Tubatse
Homes Transaction”); and
1.1.1.2 the disposal by Tubatse Estate of the remaining extent of the Burgersfort
Extension 40 Township situated at Portion 6 of the farm Witgatboom 316
(“Tubatse Estate Transaction”),
(collectively “the Disposals” or “the Properties”); and
1.1.2 SENS announcement dated 10 July 2019 – in which the Board advised that certain
conditions precedent to the Disposals had not been fulfilled within the specified
timeline and that the Disposals would not proceed at that point in time but may be
revived at some future date.
1.2 Shareholders are advised that the Company and Cecilo signed Addenda to the Agreements on
30 August 2019 in terms of which the consideration and conditions precedent in respect of
the Disposals were amended as detailed in paragraphs 3 and 4.
Freedom is a capital growth fund with a diversified portfolio of properties in the commercial, industrial
and residential sectors. Cecilo is a property developer.
2. RATIONALE FOR THE DISPOSALS
The Disposals are in line with Freedom’s strategy of divesting of its non-core assets as communicated
to shareholders on 15 March 2016.
The proceeds from the Disposals will be utilised to reduce debt in the Group.
3. PURCHASE CONSIDERATION
3.1 Tubatse Homes Transaction
The disposal by Zambesa is now in respect of 7 residential units (and not 8 as originally
announced) plus 33 serviced stands in the sectional scheme known as Tubatse Homes SS
758/2017.
The total purchase consideration is R11.5 million (exclusive of Value Added Tax), settled in
cash as follows:
- a non-refundable cash deposit of R126 000, which amount has already been paid; and
- the balance of R11.374 million to be paid as follows:
- R5.750 million on or before 5 September 2019; and
- the balance of R5.624 million on registration of transfer of the property into Zambesa’s
name, subject to Cecilo furnishing the duly appointed Conveyancers (“Conveyancers”)
on or before 30 September 2019 with a bank guarantee in respect of this amount.
3.2 Tubatse Estate Transaction
The total purchase consideration is now R49 million (exclusive of Value Added Tax), settled in
cash as follows:
- R7 million which is to be held in an interest-bearing account held by the Tubatse Estate
attorneys until such time as Cecilo has complied with the relevant notice in terms of section
11(7) of the Restitution of Land Act 22 of 1994 to the Land Claims Commission, Nelspruit;
- the balance of R42 million on registration of transfer of the property into Tubatse Estate’s
name subject to Cecilo furnishing the Conveyancers on or before 18 October 2019 with a
bank guarantee in respect of this amount.
3.3 The Disposals have been concluded “voetstoots”, save for warranties that are standard in
respect of transactions of this nature.
4. CONDITIONS PRECEDENT
The Disposals are conditional, inter alia, upon
- the completion of a due diligence investigation by Cecilo in respect of the Properties;
- Cecilo providing the bank guarantees as detailed in paragraphs 3.1 and 3.2; and
- approval being granted for the Disposals by Freedom shareholders in a general meeting.
5. INFORMATION RELATING TO THE PROPERTIES
The specifics of the Properties are as follows:
5.1 Tubatse Homes Transaction
Location: Erf 597, Burgersfort Extension 40 Township, Limpopo
Province
Rentable area: Unit 1 – 182 square metres
Unit 4 – 184 square metres
Unit 6 – 183 square metres
Unit 7 – 174 square metres
Unit 8 – 175 square metres
Unit 9 – 174 square metres
Unit 10 – 177 square metres
Valuation: (Note 1) R14 350 000
Weighted average rental per Nil – no rental activity is currently undertaken
square metre for the rentable
area: (Note 2)
Original purchase price: R8 688 525
Date initially acquired: 20 March 2014
5.2 Tubatse Estate Transaction
Location: The remaining extent of Burgersfort Extension 40
Township situated at Portion 6 of the farm Witgatboom
316, Registration Division KT, Limpopo Province
Rentable area: None
Valuation: (Note 1) R19 700 000
Weighted average rental per None
square metre for the rentable
area: (Note 3)
Original purchase price: R18 400 000
Date initially acquired: 20 March 2014
Note 1 – An independent external valuation was obtained from Real Insights Proprietary
Limited in respect of the Properties (“Independent Valuation”), which valuation was
undertaken by TLJ Behrens and HN Hartman (Professional Associated Valuer and Professional
Valuer, respectively), registered without restriction in terms of the Property Valuers Profession
Act, No. 47 of 2000. The values attributed at 28 February 2018 have been derived from the
comparable sales method of valuation.
Note 2 – The property is no longer being rented out and accordingly no weighted average
rental per square metre for the rentable area is applicable.
Note 3 – No rental income applies to this property.
6. EFFECTIVE DATE
The effective date of the Disposals will be the date of fulfilment of all the conditions precedent.
7. FINANCIAL INFORMATION ATTRIBUTABLE TO THE PROPERTIES
7.1 The total value of the Properties is R34 050 000; R14 350 000 in respect of the Tubatse Homes
Transaction and R19 700 000 in respect of the Tubatse Estate Transaction in terms of the
Independent Valuation.
7.2 There is no rental income applicable to the Properties in respect of the financial year ended
28 February 2019, based on the unaudited management accounts of Freedom, reported in
accordance with the International Financial Reporting Standards. Freedom is satisfied with the
quality of the management accounts.
8. CATEGORISATION
In terms of the JSE Limited Listings Requirements (“Listings Requirements”), the Disposals are subject
to shareholders’ approval in terms of the aggregation requirements set out in the Listings
Requirements and accordingly a circular to shareholders of Freedom will be distributed in due course.
Paarl
3 September 2019
Sponsor and Corporate Advisor
Questco Corporate Advisory Proprietary Limited
Date: 03/09/2019 05:30:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
