Acquisition Of Radnor Road Distribution Centre, Tygerberg Property
SPEAR REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2015/407237/06)
Share code: SEA
(Approved as a REIT by the JSE)
(“Spear” or “the Company”)
ACQUISITION OF RADNOR ROAD DISTRIBUTION CENTRE, TYGERBERG PROPERTY
Shareholders are advised that on 12 April 2019, the Company entered into a sale of letting
business agreement (“Agreement”) with Capital Propfund Proprietary Limited (“Seller”),
in terms of which the Company will acquire erf 24264 Parow in the City of Cape Town,
Cape Division, Province of the Western Cape, situated at 20 Radnor Road, Tygerberg,
measuring 2,0151 hectares (“Property”) and the rental enterprise conducted by the Seller
on the Property (“Rental Enterprise”), as a going concern, for a purchase consideration
of R112 000 000 (“Purchase Consideration”) (“Acquisition”).
2. RATIONALE FOR THE ACQUISITION
The Acquisition is in line with Spear’s strategy to invest into high quality assets within the
Western Cape and to furthermore increase its exposure to modern industrial assets in
3. PURCHASE CONSIDERATION
The Purchase Consideration shall be payable by the Company, in cash, on the date of
registration of transfer of the ownership of the Property into the name of the Company
(“Transfer Date”). The Company may, at any time prior to the Transfer Date undertake
an equity capital raise in the form of a vendor consideration placing, issue of shares for
cash, a rights offer and/or any other share issue or placing, in order to fund or refinance
up to 100% of the Purchase Consideration.
If the Transfer Date occurs after 31 July 2019, interest will accrue on the Purchase
4. CONDITION PRECEDENT
The Acquisition is subject to the fulfilment of the outstanding condition precedent
(“Condition Precedent”) that the Seller resolves to approve the conclusion and
implementation of the Acquisition by no later than Thursday, 18 April 2019.
The parties to the Agreement may extend the date for fulfilment of the Condition
Precedent to such further date/s as they may agree to in writing.
5. EFFECTIVE DATE OF THE ACQUISITION
The effective date of the Acquisition will be the Transfer Date.
6. WARRANTIES AND OTHER SIGNIFICANT TERMS OF THE AGREEMENT
The Seller has warranted to the Company that it will be able to grant transfer of ownership
of the Property to the Company on the Transfer Date.
Save for the aforementioned warranty, the Rental Enterprise and the Property are sold
The Seller shall provide the Company with a maximum amount of R300 000 (excluding
value added tax) as consideration towards future rental in respect of the Property.
7. THE PROPERTY
Details of the Property are as follows:
Property Geographical Sector Gross Weighted
Name and Location Lettable Area Average
Address (m2) Gross Rental /
Erf 24264 Parow, Cape Industrial 12 880 R66
Parow in the Town
City of Cape
Province of the
situated at 20
Additional details regarding the Property are set out below:
Purchase Yield Weighted Average Weighted Average Vacancy % by
Attributable to Escalation Lease Duration Gross Lettable
Shareholders (years) Area
9.1% 7% 3 0%
a) In addition to the Purchase Consideration, the costs associated with the Acquisition
are estimated at R2 000 000. No agents’ commission is payable in respect of the
b) 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 the Company. The directors of the Company 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 financial periods
ending 29 February 2020 and 28 February 2021 are set out below. The forecast financial
information has not been reviewed or reported on by a reporting accountant in terms of
section 8 of the JSE Limited Listings Requirements and is the responsibility of the
Forecast for the 9- Forecast for the 12-
month period ending month period ending
29 February 2020 28 February 2021
Revenue 9 213 547 12 729 750
Straight-line rental accrual (382 631) (49 704)
Gross revenue 8 830 916 12 680 046
Property expenses (1 596 871) (2 247 249)
Net property income 7 234 045 10 432 797
Administrative expenses - -
Operating profit 7 234 045 10 432 797
Finance cost (7 561 936) (10 082 582)
Profit before taxation (327 891) 350 215
Taxation - -
Net profit after taxation (327 891) 350 215
Straight-line rental accrual 382 631 49 704
Distributable profit 54 740 399 919
a) Property expenses include all utility and council charges applicable to the Property.
b) The forecast information for the 9-month period ended 29 February 2020 has been
calculated from the anticipated Transfer Date, being on or about 1 June 2019.
c) Contractual rental revenue constitutes 100% of the revenue for the 9-month period
ended 29 February 2020 and 100% of the revenue for the 12-month period ended 28
d) There is no uncontracted revenue.
e) There is no near-contracted revenue.
9. CLASSIFICATION OF THE ACQUISITION
The Acquisition constitutes a category 2 transaction in terms of the JSE Limited Listings
15 April 2019
Sponsor and Corporate Advisor
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