Proposed acquisitions of letting enterprises and properties
Introduction
Linked unitholders are advised that Rebosis has concluded agreements for the acquisition of letting enterprises and properties (“the property portfolio”) from the following vendors:
- Square Peg Properties (Proprietary) Limited and Rymer Trading CC (the “Capital Towers acquisition”);
- Ziningi Properties (Proprietary) Limited (the “Revenue Building acquisition”);
- Swish Property Four (Proprietary) Limited (the “First Avenue acquisition”);
- Dream World Investments 374 (Proprietary) Limited (the “Harrison Street acquisition”); and
- Trifecta Prop 11 (Proprietary) Limited (the “SASSA Campus acquisition”);
- (each “a transaction” or “an acquisition” and together the “transactions”).
Rationale for the transactions
The acquisitions are consistent with Rebosis’ strategy of acquiring large quality properties with a strong sovereign or blue chip underpin. The property portfolio is dominated by national government with an element of blue chip corporate with Standard Bank as a major tenant in one of the buildings. These strategic acquisitions will improve the geographic spread of the company’s government tenanted properties resulting in less concentration in, and exposure to, Pretoria.
Terms of the transactions and conditions precedent
The total purchase consideration payable by Rebosis for the property portfolio is R734 000 000. Payment of the purchase consideration for each of the acquisitions will be secured by separate finance guarantees for 50% of the purchase consideration payable per acquisition. The balance of the purchase consideration will be settled through a vendor consideration placement.
The transactions are, inter alia, subject to the following suspensive conditions:
- providing each of the vendors separate finance guarantees for 50% of the purchase consideration payable per property within 15 days of procuring the approval of finance;
- completion of a due diligence in respect of each of the acquisitions;
- approval of each of the acquisitions by the board of Rebosis (the “board”);
- successful capital raising through the allotment and issue of the consideration units for the remaining 50% of the purchase consideration; and
- approval by the Competition Authorities to the extent required.
The Capital Towers acquisition
The purchase consideration payable by Rebosis for the acquisition of the building known as Capital Towers in Pietermaritzburg is R115 000 000. Capital Towers is held under a leasehold granted by the Msunduzi Municipality and accordingly the purchase consideration shall be paid against registration of cession of the leases.
The purchase consideration shall be allocated between Rymer Trading CC and Square Peg Properties (Proprietary) Limited as they shall in their discretion determine.
The Capital Towers acquisition is conditional upon Msunduzi Municipality furnishing written consent to the cession of the lease held by Rymer Trading CC to Rebosis.
The Revenue Building acquisition
The purchase consideration payable by Rebosis for the acquisition of the 270 Jabu Ndlovu Street and the Revenue Building in Pietermaritzburg is R106 000 000 and R75 000 000 respectively. The purchase consideration shall be paid against registration of transfer of the properties into the name of Rebosis.
The First Avenue acquisition
The purchase consideration payable by Rebosis for the acquisition of Portion 1, 2 and 3 of Erf 1752 and Erf 368, including the building thereon and known as the First Avenue Building in Durban is R100 000 000. The purchase consideration shall be paid against registration of transfer of the properties into the name of Rebosis.
Swish Property Four (Proprietary) Limited has provided a rental income warranty in respect of the vacant space of the property for a period of 24 months from the date of transfer.
The Harrison street acquisition
The purchase consideration payable by Rebosis for the acquisition of 28 Harrison Street, 88 Fox Street and Drummond Garage in Johannesburg is R211 000 000. The purchase consideration shall be paid against registration of transfer of the properties into the name of Rebosis.
Dream World Investments 374 (Proprietary) Limited has provided a rental income warranty in respect of the property for a period of 24 months from the date of transfer.
SASSA Campus acquisition
The purchase consideration payable by Rebosis for the acquisition of the SASSA Campus in Mafikeng is R127 000 000. The purchase consideration shall be paid against registration of transfer of the property into the name of Rebosis.
The SASSA Campus acquisition is further conditional upon Rebosis concluding lease agreement(s) or renewing lease agreement(s), as the case may be, in respect of the property.
The Property portfolio
Details of the property portfolio, including property name and address, geographical location, rentable area, sector, weighted average rental per square meter, effective date of acquisition, purchase price and the valuations attributed to the properties as at 6 December 2011 by the board, are as follows –
| Property name and address | Geographical location | Rentable area(m2) | Sector |
|---|---|---|---|
| Capital Towers 121 Chief Albert Luthuli Street |
Pietermaritzburg | 13 485 | Office |
| 270 Jabu Ndlovu Street | Pietermaritzburg | 7 314 | Office |
| Revenue Building 205 Pietermaritzburg Street |
Pietermaritzburg | 10 874 | Office |
| Portion 1, 2 and 3 of Erf 1752, Erf 368, First Avenue building 96 First Avenue | Durban | 14 931 | Office |
| 28 Harrison Street, 88 Fox Street, Drummond Garage on the corner of Albert and Loveday | Johannesburg | 20 842 | Office and retail |
| SASSA Campus 2460 University Drive |
Mafikeng | 11 665 | Office |
| Total | 79 111 |
| Property name and address | Weighted average rental per m2(R) |
Effective date of acquisition | Purchase price and valuation as at 6 December 2011(R’000) |
|---|---|---|---|
| Capital Towers 121 Chief Albert Luthuli Street |
75.8 | On registration of cession of the lease | 115 000 |
| 270 Jabu Ndlovu Street | 80.8 | On transfer | 106 000 |
| Revenue Building 205 Pietermaritzburg Street |
92.7 | On transfer | 75 000 |
| Portion 1, 2 and 3 of Erf 1752, Erf 368, First Avenue building 96 First Avenue |
61.4 | On transfer | 100 000 |
| 28 Harrison Street, 88 Fox Street, Drummond Garage on the corner of Albert and Loveday | 83.0 | On transfer | 211 000 |
| 28 Harrison Street, 88 Fox Street, Drummond Garage on the corner of Albert and Loveday | 83.0 | On transfer | 211 000 |
| SASSA Campus 2460 University Drive |
93.7 | On transfer | 127 000 |
| Total | 79.9 | 734 000 |
Categorisation of the transaction
In terms of the JSE Listings Requirements, none of the transactions are subject to approval by Rebosis’ linked unitholders.
Cautionary announcement
Unitholders of Rebosis are advised to exercise caution when dealing in their linked units until the financial effects of the transaction are announced.