Proposed disposal of three retail properties for an aggregate consideration of circa R1.8 billion
REBOSIS PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2010/003468/06)
JSE share codes:
REA ISIN: ZAE000240552
REB ISIN: ZAE000201687
Alpha code: REBI
(Approved as a REIT by the JSE)
(“Rebosis” or the “Company”)
PROPOSED DISPOSAL OF THREE RETAIL PROPERTIES FOR AN AGGREGATE CONSIDERATION OF CIRCA R1.8 BILLION
Rebosis shareholders are hereby advised that the Company has entered into a sale of rental
enterprise agreement with Vukile Property Fund Limited (“Vukile” or the “Purchaser”), dated
12 May 2019 (“Signature Date”) (“Sale Agreement”), to dispose of three retail properties
comprising Mdantsane City Shopping Centre, Sunnypark Shopping Centre and Bloedstreet Mall
(the “Properties”) together with the rental enterprises conducted thereon by Rebosis (the “Rental
Enterprise”) for an aggregate consideration anticipated to be R1 777 777 778 (“Disposal
Consideration”) (the “Disposal/s”), which excludes the Agterskot (as defined in paragraph 3.2
below) and the consideration payable in respect of the Mdantsane Bulk (as detailed in paragraph
The proceeds of the Disposals will be used to reduce the existing debt of the Company. The
Disposals will become effective on the date of registration of transfer of ownership of the
Properties into the name of the Purchaser (“Transfer Date”) which is anticipated to be 31 August
2019 (“Anticipated Transfer Date”).
The Disposals are in line with the Company’s intention to reduce its loan to value (“LTV”) ratio as
outlined in the road-map included in the results announcement released by the Company on SENS on
12 November 2018 and the pre-close presentation presented to Rebosis shareholders on 27 February 2019.
The Company has experienced delays in the planned disposals of its office portfolio, as funding the
acquisition of office properties rely on tenants’ long term leases which have been taking longer
than anticipated to renew. The Company is of the view that it is important to expedite the
reduction of its LTV ratio in order to achieve a lower cost of funding, an improved credit rating and
a stronger balance sheet, all of which are expected to return market confidence in Rebosis.
3. Salient Terms
3.1 Disposal Consideration
The amount payable for the Rental Enterprise including the Properties shall be the Disposal
Consideration including additional amounts which may be payable in respect of the Agterskot and
the Mdantsane Bulk. The Disposal Consideration shall be payable by the Purchaser in cash on the
Transfer Date. If the transfer of the Properties takes place after the Anticipated Transfer Date, the
Disposal Consideration will escalate by 6% per annum, calculated and expressed as an effective
daily rate, from 31 August 2019 until the Transfer Date.
The Disposal Consideration is calculated on the basis of a forecast net property income (“NOI”) in
relation to the Rental Enterprise for the 12 month period commencing on the Anticipated Transfer
Date, which excludes the vacant office accommodation comprising approximately 2 300m2
situated in the office and retail components of the Sunnypark Shopping Centre (“Sunnypark
If during the due diligence investigation to be carried out by the Purchaser, it is established that
the forecast NOI is less than R160 million but equal to or more than R155 million (as determined
by way of agreement between Vukile and Rebosis or, failing agreement, as determined by an
independent expert), the purchase price payable by the Purchaser shall be determined by applying
a forward yield of 9% to the forecast NOI as agreed or as so independently determined. However,
if the agreed or determined forecast NOI is greater than R160 million, the Disposal Consideration
shall remain unchanged. If it is established that the NOI is less than R155 million, the Purchaser
may elect to either purchase the Properties and the Rental Enterprise for a consideration of
R1 722 222 222, or not to proceed with the Disposals.
An additional amount may be payable by Vukile in respect to the letting of the Sunnypark Vacancy,
which amount shall not exceed R55 555 555 (“Agterskot”). Rebosis shall be entitled, but not
obliged, to procure a tenant/s for the Sunnypark Vacancy, for a period terminating 12 months after
the Transfer Date, subject to the Purchaser approving the tenant/s and the provisions of the
respective lease/s. The Agterskot payment shall be determined by applying a forward yield of 9%
to the NOI of the first year of the relevant lease/s. If post the Transfer Date and prior to the first
anniversary of the Transfer Date the Purchaser leases out all or portion of the Sunnypark Vacancy,
the Purchaser will pay to Rebosis 35% of the relevant Agterskot payment.
3.3 Mdantsane Bulk
If the Purchaser, within 24 months of the Transfer Date, commences construction with an
extension in respect of the undeveloped bulk at Mdantsane Shopping Centre, then subject to the
development delivering at least a 10.5% development yield in the first year to the Purchaser, the
Purchaser will pay to Rebosis an amount attributable to the undeveloped Mdantsane bulk used in
the extension. Such amount is to be determined by Norval Wenzel Steinberg (“NWS”) from a
development feasibility to be prepared by NWS. If the development yield is determined by NWS
as being lower than 10.5% in the first year, then the cost attributable to the undeveloped bulk to
be used in the extension will be reduced by such an amount in order for the Purchaser to achieve
a development yield of 10.5%. The payment of any amount payable in terms of this paragraph shall
be paid to Rebosis, within 30 days of the practical completion of the development.
4. The Properties and related financial information
The financial information provided below has been extracted from the Company’s audited results
for the year ended 31 August 2018, which were prepared in terms of International Financial
Reporting Standards. The financial information in this announcement is the responsibility of the
directors of Rebosis and has not been reported on or reviewed by a reporting accountant.
Property Location Sector Gross Single or Weighted Net Value of
lettable multi- average operating the
area tenanted rental per income Properties*
(m2) (R) (R’m) (R’m)
Mdantsane East Retail 34 935 Multi-
City Shopping London tenanted 116.20 40.2 635
Sunnypark Gauteng Retail 27 507 Multi-
Centre 157.00 55.1 770
Office 1 423 Multi-
Bloedstreet Pretoria Retail 26 400 Multi-
Mall tenanted 155.20 48.7 695
Total 90 265 144 2 100
*The valuations were performed by Mills Fitchet Magnus Penny & Wolffs (Pty) Ltd, who is
independent from the Company and registered as a professional valuer in terms of the Property
Valuers Profession Act, No. 47 of 2000.
5. Conditions precedent
The Disposals are subject to the fulfilment of the following outstanding conditions precedent, the last
of which is required to be fulfilled by not later than 150 days of the Signature Date:
5.1 the Purchaser confirms in writing to Rebosis that it is satisfied with the outcome of the due
diligence investigation to be carried out by the Purchaser, in its sole and absolute discretion;
5.2 Rebosis securing any necessary consents, approvals and/or waivers of any third party pre-emptive
rights in order for Rebosis to effect transfer of the Properties and/or the assignment of the Bloed
Street Mall notarial leases to the Purchaser;
5.3 the shareholders of Rebosis have passed such resolutions as may be required in terms of the JSE
Listings Requirements in respect of a Category 1 transaction, and, if applicable, the Companies Act
No 71 of 2008;
5.4 the Purchaser secures approval from its shareholders for the Disposals and for the Purchaser to
undertake a vendor consideration placement to fund at least 75% of the Disposal Consideration
5.5 the Disposal is approved by the relevant competition authority/ies in terms of the Competition
Act, No 89 of 1998, either unconditionally or conditional on terms acceptable to the parties; and
5.6 the Purchaser successfully concludes the Vendor Placement to raise at least 75% of the Disposal
Consideration by way of vendor placement at a placement price and on terms acceptable to the
6.1 The Sale Agreement provides for undertakings, warranties and indemnities which are normal
for transactions of this nature.
6.2 Employees of Rebosis directly involved in the management and operation of the shopping
centres will transfer together with the Rental Enterprise.
6.3 The Disposals were not directly or indirectly introduced by or concluded through the agency
of any third party and no finder's fee, brokerage, commission or similar compensation is
payable in respect of the Disposals or any part thereof.
In terms of the JSE Listings Requirements, the Disposals are classified as a Category 1 transaction for
Rebosis, which accordingly requires approval by Rebosis shareholders. Details of the Disposals,
together with inter alia, pro forma financial effects of the Disposals and a valuation report on the
Properties will be included in a circular to Rebosis shareholders (“Circular”). The salient dates and
times pertaining to the Disposals will be released on SENS and published in the press at the time of
posting of the Circular.
13 May 2019
Investment Bank, Corporate Advisor, and Equity and Debt Sponsor:
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Cliffe Dekker Hofmeyr Inc.
Date: 13/05/2019 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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