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Disposal of 3 Simba, 5 Simba and Cape Road properties and cancellation of sale of Fort Drury and Sediba properties
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”)
DISPOSAL OF 3 SIMBA, 5 SIMBA AND CAPE ROAD PROPERTIES AND CANCELLATION OF SALE OF FORT DRURY AND
SEDIBA PROPERTIES
1. DISPOSAL OF 3 SIMBA, 5 SIMBA AND CAPE ROAD PROPERTIES
1.1 Introduction
Delta shareholders are hereby advised that the Company (“Seller”) has entered into separate agreements
(“Agreements”) with Twenty-five 15 Proprietary Limited (“Twenty-five”) and Rivadax Proprietary Limited
(“Rivadax”) (collectively the “Purchasers”), represented by Jeffrey Froom and Janco du Toit respectively, to
dispose of three of its properties (“Disposals”) as detailed below:
1.1.1 the disposal to Twenty-five of the property situated at 3 Simba Road, Sunninghill, Johannesburg,
together with all buildings and improvements thereon, as more commonly known as “3 Simba”;
1.1.2 the disposal to Twenty-five of the property situated at 5 Simba Road, Sunninghill, Johannesburg,
together with all buildings and improvements thereon, as more commonly known as “5 Simba”;
and
1.1.3 the disposal to Rivadax of the property situated at corner of CJ Langenhoven Drive and Cape Road,
Port Elizabeth, together with all buildings and improvements thereon, as more commonly known
as “Cape Road”,
collectively the “Properties” for a total cash consideration of R76.0 million (“Disposal Consideration”).
1.2 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. 3 Simba, 5 Simba and Cape Road are considered as such assets.
The net proceeds of R74,3 million (net of commission) will be utilised by the Company to reduce the Loan
to Value (LTV) by 0,1% from 57,0% to 56,9% and to reduce vacancy levels by 0,3% from 31,3% (28
February 2022) to 31,0%.
1.3 Terms and conditions of the disposal
1.3.1 Sale
The Seller has agreed to sell, and the Purchasers have agreed to purchase the Properties, with effect from,
and inclusive, of the date on which the registration of transfer of the Properties into the name of the
Purchasers is effected, which date the Company anticipates will be approximately 30 September 2022.
1.3.2 Disposal Consideration
The Disposal Consideration payable for the Properties by the Purchasers is R76.0 million exclusive of VAT,
payable in cash.
1.3.3 Conditions precedent
The Disposals are conditional on the fulfilment of the conditions precedent that signed resolutions be
provided by both the Seller’s and Purchasers’ boards and/or Investment committees approving the
Disposals.
1.3.4 Representations and warranties
The Agreements contain representations and warranties by the parties in favour of one another which are
standard for transactions of this nature.
1.4 Financial and property-related information in respect of the Properties
3 Simba 5 Simba Cape Road
Location: 3 Simba Road, 5 Simba Road, Corner of CJ Langenhoven
Sunninghill, Sunninghill, Drive and Cape Road,
Johannesburg, Gauteng Johannesburg, Gauteng Port Elizabeth, Eastern
Cape
Gross lettable area: 3 696m2 5 375m2 5 135m2
Weighted average rental R0/m2 R95,85/m2 R118,83/m2
as at 28 February 2022:
Net operating (R0,8 million) R2,8 million¹ R3,3 million
(loss)/income¹:
Effective date of the On or about 30 On or about 30 On or about 30
Disposal: September 2022, being September 2022, being September 2022, being
the anticipated transfer the anticipated transfer the anticipated transfer
date of the Property into date of the Property into date of the Property into
the name of the the name of the the name of the
Purchaser Purchaser Purchaser
Vacancy rate as at 28 100% 100%¹ 62,30%
February 2022:
Value of the Properties as R14,1 million R20,5 million R37,0 million
at 28 February 2022:
Disposal consideration R15,5 million R22,5 million R38,0 million
(exclusive of VAT):
Premium to market value: 9,8% 9,9% 2,7%
Sector: Office Office Office
Notes:
1. The net operating income in respect of the Properties has been extracted from the Company’s
results for the year ended 28 February 2022, which were prepared in terms of International Financial
Reporting Standards. Due to the tenant vacating 5 Simba on 1 March 2022, the net operating income
of R2,8 million reflects the income for the year ending 28 February 2022.
2. The valuations were performed as at 28 February 2022 by HD Valuations, Jones Lang LaSalle,
Realworx Property Valuations and Real Insight who are independent from the Company and
registered as professional valuers in terms of the Property Valuers Profession Act, No. 47 of 2000.
3. The vacancy rates as of the date of the release of this SENS announcement for 3 Simba and 5 Simba
are 100% and Cape Road is 62.3%.
4. 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.
1.5 Categorisation
The Disposals are classified as Category 2 transactions in terms of the JSE Listings Requirements, which
requires an announcement.
2. CANCELLATION OF SALE OF FORT DRURY AND SEDIBA PROPERTIES
Delta shareholders are referred to the SENS announcement released on 8 November 2021 (“Previous
Announcement”) wherein the Company advised that it had entered into agreements (“Agreements”) with Central
Plaza Investments 199 Proprietary Limited to dispose of its properties situated at:
2.1 corner of Markgraaff and St Andrews Streets, Bloemfontein, together with all buildings and improvements
thereon, as more commonly known as “Fort Drury”, including the rental enterprises conducted thereon;
and
2.2 corner of Markgraaff and Zastron Streets, Bloemfontein, together with all buildings and improvements
thereon, as more commonly known as “Sediba”,
for a cash consideration of R76.5 million.
Shareholders are hereby advised that the Company has decided to cancel the Agreements entered into between
the parties on the basis that the conditions precedent, as described in the Previous Announcement, were not
met.
Shareholders are further advised that portfolio optimization remains a priority, therefore the Company still
intends to dispose of these properties and will update the market accordingly.
Johannesburg
04 July 2022
Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Date: 04-07-2022 04:30:00
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