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EXEMPLAR REITAIL LIMITED - Abridged prospectus listing of Exemplar by way of introduction on the Main Board of the JSE

Release Date: 30/05/2018 09:00
Code(s): EXP     PDF:  
Wrap Text
Abridged prospectus – listing of Exemplar by way of introduction on the Main Board of the JSE

Exemplar REITail Limited
(formerly McCormick REITail Fund Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2018/022591/06)
Approved as a REIT by the JSE
JSE share code: EXP
ISIN: ZAE000257549
("Exemplar" or "the company" or "the group")


This abridged prospectus is not an invitation to the public to subscribe for shares but is issued in compliance with the
Listings Requirements and the Companies Act, for the purpose of providing information to the public regarding the
business and affairs of the company at the time of the listing of all the issued shares in the company by way of
introduction in the "Retail" REIT's sector on the Main Board of the JSE. This prospectus does not relate to an offer of
shares and no capital is being raised. Consequently, there is no underwriting.

This announcement contains the salient information in respect of Exemplar, which is more fully described in the
prospectus ("the full prospectus") which will be made available for inspection from today and a copy of which was
registered with the CIPC on Friday, 25 May 2018 in terms of the Companies Act. For a full appreciation and
understanding of Exemplar 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.

1.    Retail REIT listing on the Main Board of the JSE

      The JSE has granted Exemplar a listing of 305 871 896 shares in the “Retail” REIT’s sector on the Main Board
      of the JSE under the abbreviated name: "Exemplar", JSE share code: “EXP” and ISIN: ZAE000257549, with
      effect from the commencement of trade on Tuesday, 12 June 2018. Exemplar was incorporated as a public
      company on 17 January 2018.

2.    Background and nature of the business

      Exemplar is a focused retail fund specialising in owning, internally managing and growing a portfolio of
      shopping malls typically in under-serviced, peri-urban townships and rural areas of South Africa. Exemplar
      holds, either directly or indirectly, a portfolio of 20 income generating properties and has secured a further three
      shopping centre development properties scheduled to be completed between April 2019 and October 2019. The
      property portfolio is valued at R5.5 billion, with a GLA of 365 235m² as set out in Annexure 7 of the full
      prospectus. The current property portfolio was acquired in a sequence of transactions prior to the company’s
      listing from, amongst others, the John McCormick Family Trust ("JMFT"). All the properties were developed
      by McCormick Property Development Proprietary Limited ("MPD"), a privately-owned property developer
      with a 35-year history in the sector, during which time a total of 62 such developments have been completed.
      MPD is wholly-owned by the JMFT. The JMFT will be the controlling shareholder of Exemplar on listing.

3.    Investment and growth strategy

      The company intends to grow its property portfolio through the acquisition of high quality assets consistent with
      the metrics of the existing portfolio. MPD has a strong pipeline of secured development opportunities and will
      continue to develop property consistent with the nature of the properties in Exemplar’s portfolio. Should MPD
      decide to dispose of a particular property it develops in the future, it will offer such property to the company on
      a “right of first refusal” basis, in which event the merits of such proposed acquisition will be considered by the
      board. In the interest of transparency and to ensure arms-length transactions, John and Jason McCormick will
      recuse themselves from any meetings regarding related party acquisitions.

      The three new shopping centre development properties, being Katale Square, Mabopane Plaza and Riba Cross
      Mall, further details of which are set out in Annexure 7 of the full prospectus, are in the process of being
      completed by MPD. They are housed in three separate companies. Exemplar has undertaken to acquire the three
      development companies subject to MPD completing the development properties housed therein to an agreed
      specification and furthermore subject to a two-year rental guarantee. The purchase price for each of the Katale
      Square, Mabopane Plaza and Riba Cross Mall developments has been agreed to by the parties and will be
      settled by way of a combination of cash and Exemplar shares on completion of each development, being
      1 April 2019, 1 September 2019 and 1 October 2019, respectively.

4.    Directors

      Name and age          Frank Michael Berkeley (61)

      Business address      3 Avenue Lombardie, Constantia, Cape Town 7806

      Qualification         B Comm. B Acc. CA(SA)

      Position              Chairman, independent non-executive director

      Name and age          Jason McCormick (39)

      Business address      Cnr Lyttelton Road and Leyden Avenue, Clubview, Centurion, 0157

      Qualification         BComm (Economics and Business Management), BComm (Hons) (Business Management)

      Position              CEO

      Name and age          Duncan Alan Church (45)

      Business address      Cnr Lyttelton Road and Leyden Avenue, Clubview, Centurion, 0157

      Qualification         BCompt (Hons), CA(SA)

      Position              CFO

      Name and age          John McCormick (73)

      Business address      Cnr Lyttelton Road and Leyden Avenue, Clubview, Centurion, 0157

      Qualification         BComm (Economics), MBA (Finance)

      Position              Executive director

      Name and age          Gregory Victor Charles Azzopardi (57)

      Business address      1st Floor, 9 Old Main Road, Kloof, Kwa-Zulu Natal, 3610.

      Qualification         BA & LLB (UKZN), BBA (Newport USA).

      Position              Independent non-executive director

      Name and age          Peter Joel Katzenellenbogen (72)

      Business address      Transaction Capital House, 230 Jan Smuts Avenue, Dunkeld West, Johannesburg, 2196

      Qualification         BComm (Acc) (Cum Laude), CA (SA)

      Position              Independent non-executive director

      Name and age          Elias Phatudi Maponya (52)

      Business address      Maponya Investment Holdings, No 1 Gateside Avenue, Off Cedar Road, Dainfern

      Qualification         BProc, LLB, H Dip Company Law

      Position              Independent non-executive director

      All of the directors are South African nationals.

5.    Prospects

      Based on the forecast statement of comprehensive income, further details of which are set out in Annexure 14
      of the full prospectus, the Exemplar board is confident that it will deliver a distribution per share of 61.37 cents
      per share for the nine months ending 28 February 2019 and 91.27 cents per share the year ending
      29 February 2020.

      The property and asset management function of the Exemplar group is internalised and the Exemplar group
      have vast experience in their chosen market. In addition, it is of the opinion that there are several redevelopment
      opportunities which could be the subject of future acquisitions. It is intended that MPD will offer to Exemplar
      its current and future development pipeline of retail projects currently in excess of 500 000 m2 of GLA, all
      focused on the undersupplied rural and peri-urban township markets.

6.    Summarised forecast information

      Given the nature of its business, Exemplar uses distribution per share as its key performance measure as it is
      considered a more relevant performance measure than earnings or headline earnings per share.

      Set out below are the summarised forecast statements of comprehensive income ("summarised forecasts") for
      the nine months ending 28 February 2019 and the year ending 29 February 2020 (“forecast periods”).

      The summarised forecasts comprise forecast figures for the duration of the forecast periods.

      The summarised forecasts, including the assumptions on which they are based and the financial information
      from which they are prepared, are the responsibility of the directors of Exemplar.

      The summarised forecasts have been prepared in compliance with IFRS and in accordance with Exemplar’s
      accounting policies.

                                                                                 Forecast for the       Forecast for the
                                                                               nine months ending            year ending
                                                                                 28 February 2019       29 February 2020
      Distributable income (R'000)                                                        196 226                299 835

      Number of shares in issue                                                       319 739 136            328 507 866
      Weighted average number of shares in issue                                      311 897 484            324 473 501

      Basic and diluted earnings per share (cents)                                          61.43                  91.31
      Headline earnings per share (cents)                                                   73.54                 100.64
      Distributable income per share (cents)                                                61.37                  91.27

      The figures set out above are extracted from detailed forecasts for the nine months ending 28 February 2019 and
      the year ending 29 February 2020 and have been reported on by the independent reporting accountant, Grant
      Thornton Johannesburg. The detailed forecasts, the independent reporting accountants’ report on the detailed
      forecast and the assumptions on which the detailed forecasts are based, are set out in the full prospectus.
7.    Salient dates and times


        Abridged prospectus released on SENS on                                                         Wednesday, 30 May

        Abridged prospectus published in the press on                                                    Thursday, 31 May

        Exemplar shares listed on the JSE from the commencement of trade (09:00)
        on                                                                                               Tuesday, 12 June


      (1) 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 published in the press.

8.    Availability of the full prospectus

      Copies of the full prospectus may be obtained between 08:30 and 17:00 on business days from Wednesday,
      30 May 2018 to Tuesday, 12 June 2018 at the following places and on the company’s website:

      Exemplar REITail Limited

      Cnr Lyttelton Road and Leyden Avenue, Clubview, Centurion, 0157

      Java Capital Trustees and Sponsors Proprietary Limited

      6A Sandown Valley Crescent, Sandown, Sandton, 2196

30 May 2018

Corporate advisor and sponsor
Java Capital

Independent reporting accountants and auditors
Grant Thornton

Werksmans Attorneys

Date: 30/05/2018 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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