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Abridged Prospectus relating to the listing of aReit Prop on the Main Board of the JSE
AREIT PROP LIMITED
Approved as a REIT
(Incorporated in the Republic of South Africa)
(Registration number 2021/837953/06)
(“aReit Prop” or “the Company”)
ISIN Code: ZAE000306585 | JSE Code: APO
ABRIDGED PROSPECTUS RELATING TO THE LISTING OF AREIT PROP ON THE MAIN BOARD OF THE JSE
1. BACKGROUND ON THE PROSPECTUS
The board of directors of aReit Prop (“the Directors”) are pleased to announce the issue of a
Prospectus and issued in terms of the JSE Listings Requirements and the Companies Act, 2008 (No. 71
of 2008), as amended (“the Act”), relating to a Sale of Shares by way of a Private Placing of existing
aReit Prop ordinary Shares by way of:
• an offer of up to 30 000 000 existing shares in the Company at an indicative sale price of between
R8.00 and R10.00 per share, with a median target price of R9.00 per share; and
• the subsequent listing of 100 000 000 ordinary no par value shares in aReit Prop on the Main Board
of the JSE.
This abridged prospectus is not an invitation to the general public to subscribe for shares in aReit Prop.
It is issued in compliance with the Listings Requirements and the Companies Act, 2008 for the purpose
of providing information to the public regarding aReit Prop and to provide information to select
investors with regards to the private placement.
Interested investors should contact the Company or AcaciaCap Advisors for a presentation and to
participate in the private placing at:
• abdul@areitprop.co.za
• michelle@acaciacap.co.za
This announcement contains the salient information in respect of aReit Prop, which is more fully
described in the prospectus (“the full prospectus”) which will be made available to invited investors
from today and a copy of which was registered with the CIPC on Friday, 7 January 2022 in terms of
the Companies Act, 2008. For a full appreciation and understanding of aReit Prop, the private
placement and the listing, the full prospectus should be read in its entirety.
Terms defined in the full prospectus bear the same meaning in this abridged prospectus.
2. INTRODUCTION
Subject to the required spread of public shareholders in terms of the JSE Listings Requirements being
achieved pursuant to the Private Placing Offer, the JSE has granted aReit Prop a listing in respect of
100 000 000 ordinary Shares in the “Diversified REIT” sector on the Main Board of the JSE under the
abbreviated name “aReit”, share code “APO” and ISIN ZAE000306585. It is anticipated that the listing
of the Shares on the Main Board will become effective from the commencement of business on
Monday, 14 February 2022.
3. INCORPORATION AND NATURE OF THE BUSINESS
aReit Prop holds a slightly diversified portfolio of two hospitality properties (Cresta Grande Hotel and
Fountains Hotel) and one medical property (Lady Hamilton) at the Last Practicable Date. Rental
income is also derived from lease of a billboard on top of the Cresta Grande Hotel.
The acquisition of the leasehold properties is with effect from 31 December 2021, which acquisition
provides the cession of the existing lease agreements with effect from 1 January 2022 with four
tenants, namely Cresta Hotels, Afrirent, Suncare and Supasite.
The tenants have all signed long-term leases. The tenants and minimum contracted rental of the
three properties are set out below:
Property Nature of Rental Tenant Minimum
income contracted
rental income
per annum
(Note 1)
R
Cresta Grande Hotel Entire hotel Cresta Hotels 18 000 000
Billboard on top of Supasite 960 000
the hotel
Fountains Hotel Entire hotel Afrirent 13 200 000
Lady Hamilton Entire property Suncare 7 800 000
rented as medical
suites
Total 39 960 000
Note 1: Extracted from the profit forecast for the year ending 31 December 2022
The lease agreements with Cresta Hotels and Afrirent comprise a base rental or variable rental of 25%
of turnover, whichever is the higher, providing upside potential for aReit Prop with a secure minimum
contracted rental.
The properties have been acquired on a leasehold basis for 40 years, and the leasehold obligations
have been settled in full through the issue of shares to the vendors, who own 100% of aReit Prop prior
to the sale of a portion of their Vendor Shares in terms of this Prospectus. Accordingly, at the Last
Practicable Date, aReit Prop is ungeared.
The acquisition of the Leasehold Properties gives the right to aReit Prop to receive the rentals from the
existing (or later new) tenants for a minimum period of 40 years.
The properties have been valued at R913 918 000, thus exceeding the minimum of R300m required in
terms of section 25BB of the Tax Act. This, together with the Company meeting the other minimum
requirements in terms of the Tax Act and the JSE Listings Requirements, allows the Company to be
recognised as a REIT.
aReit Prop, through its wholly owned subsidiary aReit Prop Leasehold, holds four long term leases, two
of which lease terms are for 10 years, renewable for 10 years, with large tenants, namely Cresta and
Afrirent. In these two instances, parent guarantees are held for one year’s rental from the tenant for
the duration of the lease, thus giving security to aReit Prop for the majority of the annual rental
income. The leases with Cresta Hotels and Afrirent have a base rental or a variable rental based on
revenue, whichever is the higher. The leases with Suncare and Supasite do not contain turnover
clauses and do not have parent company guarantees.
The minimum contracted annual rental for the aReit Prop group is approximately R39 960 000 based
on the minimum rental, excluding any upside that may arise in the event that turnover rental exceeds
the minimum rental.
With the tenants being responsible for operating costs and the Vendors being responsible for major
maintenance projects and rates and taxes on the properties, the operating costs of aReit Prop are
relatively low and relate primarily to being a listed company.
4. DIRECTORS
The board is currently made up of six directors of which four are non-executives (three of whom are
independent) and two are executive directors.
Maria Jaspers (47)
Nationality Dutch
Business address 5 Provident South Street, Parow, Cape Town,
Appointment date 9 September 2021
Qualifications Bachelors’ Degree in Business Administration
Occupation Hotelier and property owner/developer
Position in Company Chief Executive Officer
Term of office Executive appointment
Abdul Ismail (36)
Nationality South African
Business address 5 Provident South Street, Parow, Cape Town,
Appointment date 15 October 2021
Qualifications Degree in Financial Information Systems and BCom
Occupation Accountant
Position in Company Financial Director
Term of office Executive appointment
Jacques Osse (68)
Nationality Dutch
Business address 5 Provident South Street, Parow, Cape Town,
Appointment date 9 September 2021
Qualifications Higher National Diploma in Hotel & Catering Administration
Occupation Hotelier and property owner/developer
Position in Company Non-Executive Chairman
Term of office Subject to rotation every three years
Stuart Chase (61)
Nationality British
Business address 5 Provident South Street, Parow, Cape Town,
Appointment date 15 October 2021
Qualifications B.Sc. (Hons) degree in Hotel and Catering Administration
Occupation Hotelier
Position in Company Independent Non-Executive Director
Term of office Subject to rotation every three years
Theo Nel (62)
Nationality South African
Business address 5 Provident South Street, Parow, Cape Town,
Appointment date 3 November 2021
Qualifications BA, LLB, LLM, LLM
Occupation Advocate
Position in Company Lead Independent Non-Executive Director
Term of office Subject to rotation every three years
Fatima Noordien (38)
Nationality South African
Business address 5 Provident South Street, Parow, Cape Town,
Appointment date 5 November 2021
Qualifications BCom and AGA (SA)
Occupation Accountant
Position in Company Independent Non-Executive Director
Term of office Subject to rotation every three years
5. PROSPECTS
aReit Prop’s business strategy is to invest in yield-enhancing assets and areas that offer consistent,
long-term rental growth. The asset and property management function are carried out internally by
aReit Prop’s experienced management team with a view to extracting maximum value from each
property. Whilst the current properties are leasehold properties and are ungeared, the Company
does envisage acquiring freehold properties and gearing same, at appropriate levels, within the
requirements for a REIT. There is no intention to gear the existing leasehold properties.
The board of aReit Prop is confident that it will deliver good growth to investors off a solid and secure
base. It intends distributing dividends at least every 6 months to its investors. However, the Board will
consider the payment of dividends on a quarterly basis and a distribution of up to 100% of
distributable income for the foreseeable future. The Company has not determined any fixed dates on
which dividends or entitlement to dividends arises.
With a secure rental income, strong balance sheet and no gearing, aReit Prop has a solid base that
will provide the ability to invest in various real estate sectors both locally and internationally through
further leasehold and freehold property acquisitions, utilising both debt and equity associated with
such acquisitions. The group expects that it will be able to add significantly to its property portfolio on
a yield-enhancing basis for its investors over time.
6. ASSET AND PROPERTY MANAGEMENT
No external asset or property managers have been appointed and these functions will be managed by
the board of directors.
7. FORECAST INFORMATION
The profit forecasts of aReit Prop Limited for the years ending 31 December 2022 and 31 December
2023, the preparation of which is the responsibility of the directors of aReit Prop, are set out below.
The accounting policies applied in arriving at the forecast incomes are consistent in all respects with
IFRS and with those accounting policies to be applied by aReit Prop.
The profit forecasts have been prepared for illustrative purposes only, to provide information on what
the directors believe will be the results of aReit Prop Limited for the years ending 31 December 2022
and 31 December 2023.
The nature of the profit forecasts may not fairly present aReit Prop’s financial position, changes in
equity, and results of operations or cash flow information after the Private Placing. The forecast
financial information has been prepared in accordance with paragraph 8.35 to 8.43 of the JSE Listings
Requirements and the reporting accountants’ reports has been included in Annexure 8 of the
Prospectus
Figures in Rand 31 December 2022 31 December 2023
Revenue
Rental Income 39 960 000 41 958 000
Revenue straight-line adjustment 25 493 085 23 495 085
65 453 085 65 453 085
Other operating expenses (2 552 000) (2 649 600)
Operating expenses (2 552 000) (2 649 600)
Operating profit 62 901 085 62 803 485
Finance costs (-) (-)
Profit for the year 62 901 085 62 803 485
Dividend distribution (minimum) (28 056 000) (29 481 300)
Transfer to retained income for the year 34 845 085 33 322 185
A reconciliation of the profit for the year to expected attributable earnings is set out below:
Figures in Rand 28 December 2022 28 December 2023
Profit for the year 62 901 085 62 803 485
Revenue straight-line adjustment (25 493 085) (23 495 085)
Distributable Profit 37 408 000 39 308 400
Percentage distribution (minimum) 75% 75%
Expected minimum dividend distribution 28 056 000 29 481 300
The distributable profit above is based on contracted revenue only.
The per share information is set out below:
Figures in Rand 31 December 2022 31 December 2023
Earnings per share (cents) 62.9 62.8
Headline earnings per share (cents) 62.9 62.8
Distribution per share (minimum) (cents) 28.0 29.5
Net asset value per share (cents) 913.9 913.9
Number of shares in issue 100 000 000 100 000 000
8. SALIENT DATES AND TIMES
2022
Abridged prospectus released on SENS on Monday, 10 January
Opening date of the Private Placing on (09:00) Monday, 10 January
Closing date of the Private Placing on (12:00) Monday, 31 January
Results of the Private Placing released on SENS on Tuesday, 1 February
Notification of allotments to successful invited investors on or from Wednesday, 2 February
Accounts at CSDP or broker updated and debited in respect of
dematerialised shareholders on Monday, 14 February
aReit Prop shares listed on the JSE from the commencement of Monday, 14 February
trade on (09:00)
Notes:
All references to dates and times are to local dates and times in South Africa. These dates and times
are subject to amendment. Any such amendment will be released on SENS and in the press.
Invited investors must advise their CSDP or broker of their acceptance of the Private Placing shares in
the manner and cut-off time stipulated by their CSDP or broker.
CSDPs effect payment on a delivery-versus-payment basis.
9. PURPOSE OF THE PRIVATE PLACEMENT AND THE LISTING
The main purposes of the private placement and the listing are to:
- provide investors, both institutional and private, with an opportunity to participate over the
long term in the income streams and future capital growth of the company;
- enhance the liquidity and tradability of the shares;
- provide the company with a platform to raise equity funding to pursue growth and
investment opportunities in the future; and
- enhance the public profile and general public awareness of aReit Prop.
10. DETAILS OF THE PRIVATE PLACEMENT
The Private Placing will be constituted by the placement of existing Vendor Shares of up to 30 million
ordinary shares at an indicative placing price of between R8.00 and R10.00 per Share, with a target
placing price of R9.00 per ordinary share.
The listing is conditional on the company achieving a spread of public shareholders acceptable to the
JSE at the point of listing on the Main Board being public shareholders holding not less than 20% of the
issued share capital of the company to ensure reasonable liquidity, by no later than 48 hours prior to
the listing.
There are no convertibility or redemption provisions relating to the Private Placing shares being offered
in terms of the Private Placing. Private Placing shares will be in dematerialised form only.
No fractions of Private Placing shares will be sold pursuant to the Private Placing. The listing is
conditional on placing a minimum of 20 000 000 Vendor Shares to the general public in order to meet
the minimum 20% shareholder spread requirement in terms of the JSE Listings Requirements.
11. CONDITION TO WHICH THE PRIVATE PLACEMENT AND THE LISITNG ARE SUBJECT
There is a minimum requirement for the sale of 20% of the existing issued share capital by way of the
Private Placing, being at least 20 000 000 shares, in order to ensure that the minimum public
shareholder spread requirements for companies listing on the Main Board of the JSE, in terms of the
JSE Listings Requirements. In the event that the minimum shareholder spread is not achieved, the
listing will not proceed and all application monies will be refunded to applicants. The Company itself
is not issuing shares and there is no minimum subscription required as the Company has sufficient
working capital.
12. AVAILABILITY OF THE FULL PROSPECTUS AND THE INVESTOR PRESENTATION
Copies of the prospectus may be obtained between 08:30 and 17:00 on business days from Monday,
10 January 2022 to Monday, 14 February 2021 at the following addresses and on the company’s
website at http://www.areitprop.co.za/Investor-Documents
aReit Prop Limited
5 Provident South Street, Parow, Cape Town, Western Cape, 7500
AcaciaCap Advisors Proprietary Limited
20 Stirrup Lane, Woodmead Office Park, Woodmead, 2191
Computershare Investor Services Proprietary Limited
(Registration number 2004/003647/07)
15 Biermann Avenue
Rosebank, 2196, 2001;
(Private Bag X9000, Saxonwold, 2132
BY ORDER OF THE BOARD
Johannesburg
10 January 2022
Sponsor Attorney Reporting Accountant
AcaciaCap Advisors (Pty) Ltd Jordaan & Ferreira Incorporated Mazaars
Date: 10-01-2022 01:07:00
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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,
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