Wrap Text
Proposed disposal of Delta House property
DELTA PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2002/005129/06)
JSE share code: DLT
ISIN: ZAE000194049
(Approved as a REIT by the JSE)
("Delta" or the “Company”)
PROPOSED DISPOSAL OF DELTA HOUSE PROPERTY
1. Introduction
Delta shareholders are hereby advised that the Company (“Seller”) has entered into an agreement
(“Agreement”) with The Independent Institute of Education Proprietary Limited T/A Property Division
(“Purchaser”), represented by Jean Didier Raico Oesch and/or Vongani Pilate Mbhokota, to dispose of its
property situated at Corner of Pretorius and Thabu Sehume (Andries) Streets, Pretoria, together with all
buildings and improvements thereon, as more commonly known as “Delta House”, including the rental
enterprise conducted thereon (the “Property”) for a cash consideration of R74.0 million (“Disposal
Consideration”) (“Disposal”).
2. Rationale and use of proceeds
Recently the board confirmed the strategy for the Company, as still being underpinned by the Sovereign, with a
more refined approach to the definition of Sovereign. As part of the strategy, and the optimisation of the
portfolio, it was agreed that the disposal of assets which were no longer strategic to the Company would be
undertaken. Delta House is considered one such asset.
The net proceeds of R72.5 million (net of commission) will be utilised by the Company to reduce the Loan to
Value (LTV) from 56.5% (as at 28 February 2021) to 55.3% and to reduce vacancy levels by 0.6% from 23.6% (28
February 2021) to 22.9%.
3. Terms and conditions of the Disposal
3.1 Sale
The Seller has agreed to sell, and the Purchaser has agreed to purchase the Property as a going concern
and an income-earning activity, with effect from, and inclusive, of the date on which the registration of
transfer of the Property into the name of the Purchaser is affected, which date the Company anticipates
will be approximately 28 February 2022.
3.2 Disposal Consideration
The Disposal Consideration payable for the Property by the Purchaser is R74.0 million exclusive of VAT,
payable in cash.
3.3 Conditions precedent
The Disposal is conditional on the fulfilment of the following conditions precedent:
a) signed resolutions by both the Seller’s and Purchaser’s boards and/or Investment Committees
within 10 days of the signature date of the Agreement, approving the Disposal; and
b) within 30 days, notice to be provided to an existing tenant to vacate the Property. It is worth
noting that the lease with the tenant currently occupying the property has already expired and is
currently on a month-to-month basis.
3.4 Representations and warranties
The Agreement contains representations and warranties by the parties in favour of one another which
are standard for a transaction of this nature.
4. Financial and property-related information in respect of the Property
Location: Corner of Pretorius and Thabu Sehume Streets, Pretoria
Gross lettable area: 11,439m2
Weighted average rental as at 31 August 2021: R136.47/m2
Net operating income¹: R0,7 million
Effective date of the Disposal: On or about 28 February 2022, being the anticipated
transfer date of the Property into the name of the
Purchaser
Value of the Property as at 28 February 20212: R82,1 million
Discount to market value: 9.87%
Sector: Office
Notes:
1. The net operating income in respect of the Property has been extracted from the Company’s results for
the year ended 28 February 2021, which were prepared in terms of International Financial Reporting
Standards. The net operating income achieved for the period from 1 March 2020 to 28 February 2021
was R0.7 million. The Property had a vacancy of 73.1% which has remained unchanged to date.
2. The valuation was performed as at 28 February 2021 by DNA Property Valuations, who is independent
from the Company and registered as a professional valuer in terms of the Property Valuers Profession
Act, No. 47 of 2000.
3. The financial information in this announcement is the responsibility of the board and has not been
reported on or reviewed by Delta’s auditors or a reporting accountant.
5. Categorisation
The Disposal is classified as a Category 2 transaction in terms of the JSE Listings Requirements, which merely
requires an announcement.
Johannesburg
26 October 2021
Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Date: 26-10-2021 08:25:00
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