MAS REAL ESTATE INC - Disposal of UK investment property and development land, update on disposals of other Western European properties

Disposal of UK investment property and development land, update on disposals of other Western European properties

MAS Real Estate Inc.
Registered in the British Virgin Islands
Registration number 1750199
JSE share code: MSP
ISIN: VGG5884M1041
LEI code: 213800T1TZPGQ7HS4Q13
(“MAS” or “the Company”)


DISPOSAL OF UK INVESTMENT PROPERTY (NEW UBERIOR HOUSE) AND DEVELOPMENT LAND (NORTH STREET QUARTER) AND AN UPDATE ON THE COMPLETION OF DISPOSALS 
OF OTHER WESTERN EUROPEAN PROPERTIES


DISPOSAL OF NEW UBERIOR HOUSE OFFICE PROPERTY IN THE UNITED KINGDOM

Introduction

Shareholders are advised that MAS, through its wholly-owned subsidiary, MAS (IOM) Holdings Limited, has entered into an agreement (“the sale
agreement”) for the disposal of its investment in its wholly-owned subsidiary New Uberior House Limited (“the transaction”). New Uberior House
Limited owns the New Uberior House Princess Exchange office property (“the property”) located in Edinburgh, Scotland. The investment was
sold to a leading Germany-based asset and investment management group, Union Investment Institutional Property GmbH, acting in its own name
and for the account of UII EuropeanM, a German real estate investment fund (“the purchaser”).

Rationale for the Transaction

Shareholders are referred to previous announcements in relation to the change in investment strategy involving the disposal of Western European
investment property of the Company and a redeployment of capital to more attractive investments in Central and Eastern Europe. The transaction
is a result, and is consistent with the objectives, of this strategy. The proceeds from the transaction after taxes and mandatory settlements of
senior debt facilities, will be redeployed in line with the above strategy.

Salient Terms of the Transaction

The gross purchase consideration under the sale agreement is GBP78.6 million (EUR91.0 million), subject to adjustments for movements in the
net working capital of New Uberior House Limited between the date of execution and the date on which closing occurs. The expected net proceeds
of the transaction, after the settlement of amounts outstanding under a senior loan facility (GBP38.38 million (EUR42.7 million) on 31 December
2020), transaction costs, taxes, and other costs, are approximately GBP39.1 million (EUR45.2 million). The directors of the Company (“the
Directors”) are satisfied that the agreed purchase consideration and the property valuation on which this is based are consistent with the value
of the property, as determined by the Directors. The Directors are not independent or registered as professional valuers or professional associate
valuers in terms of the South African property Valuers Profession Act 2000 or otherwise.

On 31 December 2020, the weighted average monthly rental per square metre in respect of the property was GBP26.21 (EUR30.36) and the
gross lettable area was 14,725 sqm. The annualised net income in respect of the property, based on the reviewed consolidated interim results of
the MAS group for the six months ended 31 December 2020 (prepared in terms of International Financial Reporting Standards), was GBP4.0
million (EUR4.7 million).

The closing and completion of the transaction is subject to conditionality predicated on a final in-person inspection of the property by selected
German resident executives of the purchaser as soon as reasonably possible. The executive property inspection, which could not be carried out
to date due to coronavirus-related UK travel restrictions, is an internal compliance requirement of the purchaser for the purpose of validating the
results of four separate successful site inspections which were conducted by or on behalf of the purchaser before the date of the sale agreement.
These are a virtual site inspection by executives of the purchaser, as well as three in-person inspections by external technical advisors,
environmental advisors and valuation advisors to the purchaser. The Company is confident that the final executive property inspection, once
completed, will affirm the results of the four inspections completed before the date of the sale agreement. The closing and completion of the
transaction is expected to occur prior to end August 2021.

Categorisation of the Disposal

The disposal is categorised as a Category 2 transaction in terms of the JSE Listings Requirements and as such is not subject to shareholder
approval.

DISPOSAL OF LEWES DEVELOPMENT LAND IN THE UNITED KINGDOM

Shareholders are advised that MAS, through its wholly-owned subsidiary, North Street Quarter Limited, has entered into an agreement for the
disposal of development land known as the “North Street Quarter” development site in Lewes, East Sussex, the United Kingdom for a gross
purchase consideration of GBP18.0 million (EUR20.8 million), payable in two instalments. This disposal was completed during April 2021 and the
first instalment of GBP10.0 million (EUR11.59 million) was received. The remaining instalment is due no later than end April 2023 and is secured
via a first priority registered security over the land.

UPDATE ON COMPLETION AND SETTLEMENT OF WESTERN EUROPEAN DISPOSALS PREVIOUSLY DISCLOSED

MAS has previously disclosed (see reviewed condensed consolidated interim financial statements for the six-month period ended 31 December
2020) having contracted for, but not yet completed, the disposal of the following the Western European investment properties (all figures in EUR
million):

Location               Sector                    Gross Sales Price       Debt outstanding         Estimated transaction          Estimated net
                                                                           on 31 December      costs, taxes, early debt               proceeds
                                                                                     2020      repayment penalties, and
                                                                                                            other costs
Edeka portfolio        Retail                                 95.0                   44.7                           5.8                   44.5
Retail portfolio       Retail                                 25.8                   16.4                           1.8                    7.6
DIY portfolio          DIY                                    19.3                    9.9                           4.8                    4.6
Bruchsal               Retail                                 24.8                   11.2                           2.4                   11.2
Munich                 Industrial & Logistics                 23.4                    9.2                           3.3                   10.9
Nordhausen             DIY                                     6.9                    3.4                           1.2                    2.3
Total                                                        195.2                   94.8                          19.3                   81.1

With the exception of the Nordhausen sale, for which closing is expected to occur in June 2021, the transactions above have been completed.

REMAINING PROPERTIES IN WESTERN EUROPE

Following the completion of the New Uberior House office property and Nordhausen transactions above, MAS will hold for sale Flensburg Galerie,
Adagio Hotel and Arches, Gotha, Malling Brooks and Langley Park with a combined EUR126.9 million book value and EUR67.5 million outstanding
secured bank debt on 31 December 2020.

The European Central Bank GBP:EUR exchange rate at 18:00 CET on 26 May 2021 was used to estimate the EUR equivalent of uncollected
GBP figures in relation to disposals of New Uberior House office property and Lewes development land.

27 May 2021

For further information please contact:

Leon Allison, MAS Real Estate Inc.                      +27 82 307 3667
Dan Petrisor, MAS Real Estate Inc.                      +40 741 184 921
Java Capital, JSE Sponsor                               +27 11 722 3050

Date: 27-05-2021 05:00:00
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