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Voluntary Announcement: Acquisition Of Watergate Centre, Mitchells Plain
SPEAR REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2015/407237/06)
Share Code: SEA
ISIN: ZAE000228995
LEI: 378900F76170CCB33C50
Approved as a REIT by the JSE
("Spear" or "the Company")
VOLUNTARY ANNOUNCEMENT: ACQUISITION OF WATERGATE CENTRE, MITCHELLS PLAIN
1. INTRODUCTION
Shareholders are advised that on 17 April 2026 ("Signature Date"), Spear entered into a sale of rental
enterprise agreement ("Agreement") with MPW Cape Properties (Pty) Ltd ("Seller"), in terms of which
Spear will acquire Erf 62063 Mitchells Plain, in the City of Cape Town ("Property") and the rental
enterprise known as the "Watergate Centre" conducted by the Seller on the Property ("Rental
Enterprise"), as a going concern ("Acquisition"), for a purchase consideration of R442 000 000
("Purchase Consideration").
2. RATIONALE FOR THE ACQUISITION
The Acquisition is aligned with Spear's strategy of acquiring well-located, convenience-led retail assets
within the Western Cape that deliver stable and sustainable income. The Watergate Centre ("Centre") is
a dominant, convenience-oriented shopping centre, which is strategically located on key arterial routes
along the R300, serving Mitchells Plain, and the surrounding catchment areas. The Centre comprises
approximately 19,642 m² of gross lettable area (GLA), anchored by Shoprite and Brights Hardware, and
further supported by a strong national tenant base, including Clicks, Pep, Ackermans, Mr Price, KFC ,
Capitec Bank and Zone Fitness. The value-focused tenant mix underpins the consistent footfall and daily-
needs trading at the Centre.
The Watergate Centre serves a high-density catchment area with strong consumer spending power and
limited competing convenience retail offerings, reinforcing its role as a primary convenience destination.
Income is underpinned by strong grocery and food trading, with national tenants contributing the majority
of gross rental, supporting a stable and resilient income profile. The Centre is fully let and generates
immediate, high-quality growing cash flows.
Watergate Centre represents a scarce opportunity to acquire a cash-generative, defensive retail asset
with durable income characteristics and identifiable asset management upside within a core Western
Cape node.
3. PURCHASE CONSIDERATION
3.1. The Purchase Consideration is an amount of R442 000 000 and is exclusive of value-added tax at a
rate of 0%.
3.2. The Purchase Consideration shall be settled by Spear on the date of registration of transfer of
ownership of the Property into its name ("Transfer Date") and shall be secured by a bank guarantee
prior to the date of lodgement of the transfer of the Property in the deeds office.
3.3. If the Transfer Date is delayed beyond 1 September 2026 ("Escalation Date"), unless such delay is
as a direct result of an act or omission on the part of the Seller, interest shall accrue on the Purchase
Consideration at a rate of 0,50% per month from the Escalation Date to the Transfer Date, which
interest shall be payable by Spear to the Seller prior to the Transfer Date.
4. CONDITIONS PRECEDENT
4.1. The Acquisition is subject to the condition precedent ("Conditions Precedent") that, within 90 days
after the merger filing date, the Acquisition is approved by the applicable competition authorities in
terms of the Competition Act, No. 89 of 1998, either unconditionally, or in the event of a conditional
approval, on terms acceptable to the parties.
4.2. The aforesaid period will automatically be extended by 14 days and the parties may, by written
agreement, further extend the date by when the Condition Precedent is to be fulfilled.
5. EFFECTIVE DATE OF THE ACQUISITION
The effective date of the Acquisition will be the Transfer Date, which date shall be as soon as practically
possible after the date on which the Conditions Precedent are fulfilled, and which is anticipated to be on
or about 1 August 2026.
6. WARRANTIES AND OTHER SIGNIFICANT TERMS OF THE AGREEMENT
The Agreement contains representations and warranties by the Seller, in favour of Spear, which are
standard for a transaction of this nature. Subject to such warranties, the Rental Enterprise and Property
are sold "voetstoots".
7. THE PROPERTY
Details of the Property are as follows:
Property name and address Watergate Centre, situated at Watergate
Boulevard, Mitchells Plain, Cape Town
Geographical location Mitchells Plain, Cape Town
Existing use Convenience Retail Shopping Centre
Sector Retail
Gross Lettable Area (m2) 19,642
Weighted Average Gross Rental / m2 R188.19
Further details regarding the Property, as at the expected Transfer Date, are set out below:
Purchase Yield Attributable to Shareholders 8.37%
Weighted Average Escalation 6.70%
Weighted Average Lease Duration (years) 1.86 *
Vacancy % by Gross Lettable Area 0.31%
* The relatively short weighted average lease duration profile is largely a function of the Centre's initial
lease cycle following its development approximately 9 years ago, with a significant portion of leases
reaching their natural renewal phase. Importantly, the tenant base is anchored by strong national
retailers with established trading performance at the Centre, supporting a high likelihood of lease
renewals. This lease profile provides Spear with a near-term asset management opportunity to actively
engage with tenants, secure renewals, and rebase rentals where appropriate, thereby enhancing
income quality over time. The Centre's strong trading densities, high occupancy levels and
convenience-driven tenant mix underpin its defensive characteristics and support leasing continuity
through the renewal cycle.
Notes:
a) In addition to the Purchase Consideration, Spear's transaction costs associated with the Acquisition
are estimated at R750,000.
b) No Agents' commission is payable in respect of the Acquisition.
c) The Purchase Consideration payable in respect of the Rental Enterprise (which includes the
Property) is considered to be its fair market value, as determined by the directors of Spear. The
directors of Spear 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.
8. FORECAST FINANCIAL INFORMATION OF THE ACQUISITION
The forecast financial information relating to the Acquisition for the 7-month period ending
28 February 2027 and the 12-month period ending 28 February 2028 are set out below. The forecast
financial information has not been reviewed or reported on by a reporting accountant in terms of the JSE
Listings Requirements and is the responsibility of Spear's directors.
Forecast for the 7-month Forecast for the 12-month
period commencing period ending
1 August 2026 and ending 28 February 2028 (R)
28 February 2027 (R)
Rental income 37,524,632 67,099,741
Straight-line rental accrual 801,498 (29,786)
Gross income 38,326,130 67,069,955
Property expenses (14,984,080) (27,184,787)
Net property income 23,342,050 39,885,168
Administrative expenses (1,125,739) (2,012,992)
Operating profit 22,216,311 37,872,176
Finance cost (20,581,200) (35,282,058)
Profit before taxation 1,635,111 2,590,118
Taxation - -
Profit after taxation 1,635,111 2,590,118
Adjusted For:
Straight-line rental accrual (801,498) 29,786
Distributable profit 833,613 2,619,904
Contracted rental income % 93.06% 28.41%
Near Contracted rental income % 6.94% 71.59%
Uncontracted rental income % 0% 0%
Notes:
a) Rental Income includes gross rentals and other recoveries but excludes any adjustment applicable
to the straight-line rental income accrual of leases.
b) Property expenses include all utility and council charges applicable to the Property.
c) The forecast information for the 7-month period ended 28 February 2027 has been calculated from
the anticipated Transfer Date, being on or about 1 August 2026.
d) The Acquisition will be debt funded on a 50% loan to value (LTV) ratio and the remaining portion of
the Purchase Consideration will be funded from available cash resources.
9. CLASSIFICATION OF THE ACQUISITION
The Purchase Consideration represents less than 10% of Spear's market capitalisation as at the
Signature Date and accordingly the Acquisition is uncategorised in terms of the JSE Listings
Requirements. The information contained in this announcement has been voluntarily disclosed by Spear.
Cape Town
17 April 2026
Sponsor and Transaction Advisor Legal Advisor
PSG Capital ENSafrica
Date: 17-04-2026 12:30:00
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