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Proposed Disposal of Beaconhill 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 BEACONHILL PROPERTY
1. Introduction
Delta shareholders are hereby advised that the Company ("Seller") has entered into a sale of property agreement (the "Sale
Agreement") with Chipcor Developers Proprietary Limited (the "Purchaser") to dispose of its property situated at Corner
Hargreaves and Hockley Close, Buffalo Industrial Area, King Williams Town made up of the Erf 10791, King Williams Town
including immovable assets thereon known as the "Beacon Hill" building (the "Property "), for a cash consideration of R13.00
million (the "Disposal Consideration") (the "Disposal");
2. Rationale and use of proceeds
As part of the Company's business and portfolio strategy of optimisation, it was agreed to dispose of assets which are no
longer strategic to the Company. In keeping with this strategy, the Company has taken a decision to exit non- core properties
within its portfolio. The Property falls into the classification of "non- core properties" and was disposed of via auction. This
auction sale method was elected primarily for the purpose of achieving an efficient disposal outcome on properties which
collectively comprise a sub-set of the Company's portfolio which is significantly underperforming and diluting the overall
portfolio performance. This underperformance is due to a prolonged and high vacancy rate with limited prospect of
significant improvement in the short to medium term on account of prevailing market conditions.
The proceeds from the Disposal will be utilised by the Company to reduce debt and to reduce vacancy levels by 1.1% from
33.4% (as of 29 February 2024) to 32.3% (implying that 13 648m2 of vacant space will be disposed of).
The Company further expects to reduce and minimise annual operating costs as a result of the Disposal, thereby directly
enhancing the Company's return on investment.
3. Terms and conditions of the Disposal
3.1 Purchaser
The ultimate beneficial shareholder of the Purchaser is Siviwe Mpengesi. The Purchaser is not a 'related party' in terms of
the JSE Limited ("JSE") Listings Requirements.
3.2 Effective Date of Disposal
Delta has agreed to sell and the Purchaser has agreed to purchase the Property with effect from the date on which the
registration of transfer of the Property into the name of the Purchaser is effected, which the Company anticipates will be
approximately 21 February 2025.
3.3 Disposal consideration
The Disposal Consideration payable for the Property by the Purchaser is R13.00 million exclusive of Value Added Tax,
payable as follows:
• R1.3 million non-refundable deposit payable within 24 hours of joint signature of the Agreement (which
has already been received) and;
• R11.7 million secured by way of guarantees, acceptable to the Seller, which guarantees shall be expressed
as payable on the registration of the transfer of the Property to the Purchaser, anticipated to be on or
about 21 February 2025. The guarantees are to be delivered within sixty days from the date of signature of
the Sale Agreement.
3.4 Conditions precedent
The Disposal is subject to fulfilment (or waiver, as the case may be) of the following conditions precedent:
3.4.1 within 10 business days of signature of the applicable Sale Agreement, the Purchaser shall have provided
Delta with a copy of the resolution of the board of directors of the Purchaser authorising the Purchaser to
conclude the Disposal on the terms and conditions of the Sale Agreement;
3.4.2 within 120 calendar days after the signature date, the Seller has complied with the JSE Listings
Requirements (insofar as this may be applicable), and obtained such consents and approvals as may be
required; and
3.4.3 within 120 calendar days after the signature date, to the extent necessary, any prior written approval
required from the Competition Authorities has been obtained in terms of the Competition Act, No 89 of
1998.
4. Financial and property-related information in respect of the Property
Gross lettable area: 13 648m2
Weighted average rental1: R0/m2
Net operating (loss)/income¹: (R6.67 million)
1
Vacancy rate : 100%
Effective date of the Disposal: On or about 21 February 2025, being the anticipated transfer
date of the Property into the name of the Purchaser.
Sector: Office – Government
Valuation2 R39 000 000.00
Notes:
1. The weighted average rental, net operating (loss)/income and vacancy rate in respect of the Property have been
extracted from the Company's annual financial statements for the period ended 29 February 2024, which were
prepared in terms of International Financial Reporting Standards.
2. The valuation of the Property (as at 28 February 2024) was undertaken by Theuns Behrens (Real Insight) who is
independent from the Company and registered as a professional valuer in terms of the Property Valuers Profession
Act, No. 47 of 2000.
The financial information contained in this announcement is the responsibility of the Board of Directors of Delta and has
not been reviewed or reported on by Delta's auditors or a reporting accountant.
5. Categorisation
The Disposal is classified as Category 2 transaction in terms of the JSE Listings Requirements. Accordingly, this Disposal is not
subject to shareholder approval.
Johannesburg
19 November 2024
Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Date: 19-11-2024 02:06:00
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