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ACCELERATE PROPERTY FUND LIMITED - The Disposal by Accelerate of Wanooka Place

Release Date: 01/03/2019 13:05
Code(s): APF     PDF:  
 
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The Disposal by Accelerate of Wanooka Place

ACCELERATE PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2005/015057/06)
Share code: APF ISIN: ZAE000185815
(“Accelerate”, “APF” or the “Company”)

THE DISPOSAL BY ACCELERATE OF WANOOKA PLACE

1.   INTRODUCTION
     Shareholders are advised that the Company has, through its subsidiary, Wanooka
     Properties Proprietary Limited (the “Seller”), entered into a sale of letting enterprise
     agreement (the “Agreement”) with K2012150042 (South Africa) Proprietary Limited, a
     subsidiary of Old Mutual Real Estate Company (the “Purchaser”), to dispose of, Wanooka
     Place, Erf 888 Parktown Township (“the Wanooka Property”), (“the Transaction”).

2.   THE PROPERTY
     The Wanooka Property forms part of the portfolio of KPMG properties (“the KPMG
     Portfolio”) acquired by Accelerate on or about 14 May 2015. The Wanooka Property is
     being sold for R240 000 000 (two hundred and forty million) at a yield of 8%.

3.   THE CONSIDERATION AND APPLICATION OF THE SALE PROCEEDS
     The consideration for the Transaction is a cash consideration of R240 000 000. APF
     intends to utilise the full sale proceeds towards the reduction of debt.

4.   RATIONALE FOR THE TRANSACTION AND UPDATE ON BALANCE SHEET
     OPTIMISATION STRATEGY
     In anticipation of the Fourways Equalisation, whereby Accelerate will own 50% of the
     completed Fourways Mall Super Regional Centre, the Company has earmarked
     approximately R1,7 billion of non-core properties for sale and set a target loan to value
     ratio (“LTV”) of 35%. It is the intention that the proceeds from the sale of these properties
     will be used to either reduce debt or buy back Accelerate shares.
     Accordingly, the Transaction is consistent with Accelerate’s ongoing balance sheet
     optimisation strategy. Inclusive of this Transaction, over the past 7 months, APF has
     entered in to sale agreements for R679 000 000 of properties.
     KPMG intends consolidating its staff currently located at the Wanooka Property into the
     Parktown Crescent Property.

5.   KEY TRANSACTION TERMS
     The effective date for the Transaction will be the date on which the last of the condition’s
     precedent are fulfilled or waived, as the case may be, which is expected to be during May
     2019.

6.   CONDITIONS PRECEDENT
     The closing of the Transaction is subject to the following conditions precedent:

        •   the Amendment and Assignment of Lease agreement becoming unconditional;
        •   the unconditional approval of the competition authority in terms of the Competition
            Act, No. 89 of 1998; and
        •   other necessary consents and approvals customary for a transaction of this
            nature.
     The Transaction will not become effective until, and unless, all the conditions precedent
     are fulfilled or waived in accordance with the Agreement.

7.   INFORMATION RELATING TO THE PROPERTY
     The details of the Property including location, gross lettable area (“GLA”), net rent,
     remaining lease term and independent valuation are as follows:
                                                                                                           Remaining        Independent    Effective date
Property / Tenant    Location                GLA (m2)                               Disposal Price
                                                            Net rent per m2*                               lease term          valuation           of the
                                                                                                              (years)            (ZAR)**       valuation

                      Erf 888                  6762m 2             R 238/m 2
Wanooka Property     Parktown,                                                       R240 000 000           10.5 years    R 237 400 000 31 March 2017
                     Johannesburg,
                     Gauteng

       *The net rent per m2 is the total net profits attributable to the net assets of the Wanooka Property subject to the sale.

       **As this is a sale of a single property this value represents the value of the net assets subject to sale. The valuation was performed by Mills
       Fitchet (Tvl) (Pty) Ltd, an independent Company and is registered as a professional valuer in terms of the Property Valuers Profession Act. 47
       of 2000.

       This information is based on the interim financial information for the six months ended 30 September 2018, which was 1) unaudited, 2)
       unreviewed and 3) reported on in terms of International Financial Reporting Standards.

8.   WARRANTIES
     The Seller has provided warranties and indemnities to the Purchaser that are standard
     for a transaction of this nature.

9.   VALUATION
     An independent valuation of the Property as at 31 March 2017 was undertaken by Mills
     Fitchet (Tvl) (Pty) Ltd, an independent property valuer registered without restriction as a
     Professional Valuer in terms of the Property Valuers Profession Act, No. 47 of 2000. The
     independent valuation of the Property was determined as R 237 400 000.
     This independent valuation supported the determination by the board of directors of the
     Company (the “Board”) that the Transaction Consideration is the fair market value for the
     Property. The Board is not independent, and its members are not registered as
     professional valuers or as professional associate valuers in terms of the Property Valuers
     Profession Act, No 47 of 2000.

10. CATEGORISATION OF THE TRANSACTION
     In terms of the Listings Requirements of the JSE Limited the Transaction is classified as
     a Category 2 transaction for APF and does not require shareholder approval.

Johannesburg
1 March 2019


Sponsor
The Standard Bank of South Africa Limited

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this announcement may be considered forward-looking. Although APF
believes that the expectations reflected in any such forward-looking statements relating to the
Transaction are reasonable. The information has not been reviewed or reported on by the
reporting accountants and auditors and no assurance can be given by APF that such
expectations will prove to be correct. APF does not undertake any obligation to publicly update
or revise any of the information given in this announcement that may be deemed to be forward-
looking.

DISCLAIMERS
The release, publication or distribution of this announcement in certain jurisdictions may be
restricted by law and therefore persons in such jurisdictions into which this announcement is
released, published or distributed should inform themselves about and observe such
restrictions.

This announcement is not an offer for the sale of securities. The securities discussed herein
have not been and will not be registered under the US Securities Act of 1933 (the “US
Securities Act”), or under any securities laws of any state or other jurisdiction of the United
States and may not be offered, sold, taken up, exercised, resold, renounced, transferred or
delivered, directly or indirectly, within the United States absent an exemption from, or in a
transaction not subject to, the registration requirements of the US Securities Act and in
compliance with any applicable securities laws of any state or other jurisdiction of the United
States. The Company does not intend to register any part of the in the United States.

THIS ANNOUNCEMENT IS NOT TO BE FORWARDED OR DISTRIBUTED TO ANY OTHER
PERSON AND IS NOT TO BE REPRODUCED IN ANY MANNER WHATSOEVER. ANY
FORWARDING, DISTRIBUTION OR REPRODUCTION OF THIS ANNOUNCEMENT IN
WHOLE OR IN PART IS UNAUTHORIZED. FAILURE TO COMPLY WITH THIS DIRECTIVE
MAY RESULT IN A VIOLATION OF THE SECURITIES ACT OR THE APPLICABLE LAWS
OF OTHER JURISDICTIONS. YOU MAY NOT RELY ON THE INFORMATION HEREIN.

No representation or warranty, express or implied, is made by Standard Bank as to the
accuracy, completeness or verification of the information set forth in this Announcement, and
nothing contained in this Announcement is, or shall be relied upon as, a promise or
representation in this respect, whether as to the past or the future. Standard Bank assumes
no responsibility for its accuracy, completeness or verification and, accordingly, disclaim, to
the fullest extent permitted by applicable law, any and all liability which they might otherwise
be found to have in respect of this Announcement or any such statement.

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