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Acquisition of Eerste Rivier Mall
Exemplar REITail Limited
(Incorporated in the Republic of South Africa)
(Registration number 2018/022591/06)
Approved as a REIT by the JSE
JSE share code: EXP ISIN: ZAE000257549
LEI: 3789000558287E37F130
("Exemplar" or "the Company")
ACQUISITION OF EERSTE RIVIER MALL
1. INTRODUCTION AND RATIONALE
Shareholders are advised that Exemplar has concluded an agreement (the "Agreement") to acquire Erf 2001,
Eerste Rivier Township, City of Cape Town, Division of Stellenbosch, Province of the Western Cape and the
remaining extent of Erf 1824, Eerste Rivier Township, City of Cape Town, Division of Stellenbosch, Province of
the Western Cape (together, the "Property") as well as the assets and liabilities attached to the Property
(collectively, the "Enterprise") from Erf 1824 Eerste Rivier Proprietary Limited (the "Seller") (the
"Acquisition"). The Seller is wholly owned by Klein Welmoed Trust, whose beneficiaries are Acorn Trust and
The Kiplingcotes Trust. The beneficiaries of Acorn Trust and The Kiplingcotes Trust are all individuals, none of
whom are a related party to Exemplar. The Acquisition is subject to the fulfilment of the conditions precedent
detailed in paragraph 2 below.
The shopping centre known as Eerste Rivier Mall is constructed on the Property. Further information on the
Property is included in paragraph 3 below.
The Acquisition marks Exemplar's first steps into the Western Cape. With its sound governance and infrastructure
development plans, the Western Cape makes a compelling investment case, and the Acquisition is in line with
the Company's strategy to expand its presence in the province.
2. TERMS OF THE ACQUISITION
2.1. Purchase consideration
The consideration payable for the Property is R282 000 000 (the "Purchase Price"), which shall be paid
to the Seller in cash on the date of registration of transfer of the Property in the name of the Company (the
"Transfer Date").
If the Transfer Date occurs after 15 October 2024, the Purchase Price shall be adjusted upwards by 0.5%
of the Purchase Price per month with effect from 1 September 2024.
2.2. Effective date
The effective date of the Acquisition (the "Effective Date") is the first day of the month following:
- the date of fulfilment of the last of the conditions precedent detailed in paragraph 2.3 below (the
"Unconditional Date"); and
- the delivery by Exemplar to the Seller of an irrevocable bank guarantee equal to the Purchase Price,
which must be delivered by no later than 5 business days following the Unconditional Date.
2.3. Conditions precedent
The Acquisition is subject to the fulfilment of the following conditions precedent:
On or before 30 June 2024:
- The board of directors of the Seller has passed a resolution approving the entry of the Seller into the
Agreement;
- The shareholders of the Seller have passed a special resolution approving the disposal of the
Enterprise in terms of section 112(2) of the Companies Act, No 71 of 2008;
- The board of directors of Exemplar has passed a resolution approving the entry of the Company into
the Agreement; and
- Exemplar gives the Seller written notice that it is satisfied with the outcome of its due diligence
investigation into the affairs of the Enterprise.
On or before 31 August 2024:
- The receipt of the unconditional approval of the Competition Authorities, or if the approval is
conditional, such conditions being acceptable to Exemplar and the Seller;
- Each tenant to the existing leases of the Enterprise consents to the assignment by the Seller of all its
rights and obligations in and to those leases to Exemplar;
- Each tenant to the tenant lease securities (being all deposits, guarantees, suretyships and other
documents providing any security for the tenants' obligations under the existing leases of the
Enterprise) consents to the assignment by the Seller of all its rights and obligations in and to the
tenant lease securities to Exemplar;
- Each tenant to the existing leases of the Enterprise waives any pre-emptive right which it may have
against the Seller under an existing lease to purchase the Property, and consents in writing to the
Acquisition; and
- The existing bond holder over the Property gives its written consent to the Acquisition.
The conditions precedent may not be waived, but the date for fulfilment thereof may be extended by way
of agreement between Exemplar and the Seller.
2.4. Other material terms
The Agreement contains undertakings and warranties which are normal for a transaction of this nature.
Exemplar shall prepare an adjustment account in respect of the Enterprise as at the Effective Date and
deliver the adjustment account to the Seller no later than 45 days after the Transfer Date.
The adjustment account shall reflect the following as credits to the Seller:
- all rentals and other income payable under the existing leases prior to the Effective Date and collected
after the effective date by Exemplar; and
- all deposits paid by the Seller and held with any service provider of the Enterprise.
The adjustment account shall reflect the following as debits to the Seller:
- all amounts of municipal fees, surcharges on fees, Property rates, municipal taxes and other
municipal charges for any period before the Effective Date not paid as at that date and subsequently
paid by Exemplar;
- all rentals and other income paid to the Seller for the periods on or after the Effective Date; and
- any other expenses incurred for periods prior to the Effective Date and subsequently paid by
Exemplar.
Payment of any amounts due to either Exemplar or the Seller in terms of the adjustment account shall not
constitute part of the Purchase Price and shall be effected separately from the payment of the Purchase
Price.
3. PROPERTY SPECIFIC INFORMATION
Weighted
average Value attributed to
basic rental Purchase the Property as at
Property Geographical GLA per m2 Price for the 1 September 2024
name location Sector (m2) (R/m2) Property (R) (R)
Eerste Stellenbosch, Retail 16 599 R163.35 R282 000 000 R282 000 000
Rivier Western Cape
Mall
The Purchase Price is considered to be the Property's fair market value, as determined by the directors of the
Company. The directors of the Company are not independent and are not registered as professional valuers or as
professional associate valuers in terms of the Property Valuers Profession Act, No.47 of 2000.
4. FINANCIAL INFORMATION
Set out below are the forecast revenue, operational net income, net profit after tax and earnings available for
distribution relating to the Enterprise (the "Forecast") for the 6 months ending 28 February 2025 and the
12 months ending 28 February 2026 (the "Forecast Period").
The Forecast has been prepared on the assumption that the Effective Date is 1 September 2024 and on the basis
that the forecast includes forecast results for the duration of the Forecast Period.
The Forecast, including the assumptions on which it is based and the financial information from which it has been
prepared, is the responsibility of the directors of the Company. The Forecast has not been reviewed or reported
on by independent reporting accountants.
The Forecast presented in the table below has been prepared in accordance with the Company's accounting
policies, which are in compliance with International Financial Reporting Standards.
Rand Forecast for the 6 months Forecast for the 12 months
ending 28 February 2025 ending 28 February 2026
Rental and recovery income 22 732 517 48 204 341
Contracted 18 045 209 32 203 530
Uncontracted 4 687 308 16 000 811
Net property income 13 181 773 27 600 763
Net after tax profit 13 181 773 27 600 763
Total comprehensive (loss)/profit for the period (316 988) 1 071 613
Profit available for distribution (cps) (0.10) 0.32
The forecast incorporates the following material assumptions in respect of revenue and expenses:
1. The forecast is based on information derived from the management accounts, budgets, and rental contracts
provided by the Seller's property manager.
2. Contracted revenue is based on existing lease agreements including stipulated increases, all of which are
valid and enforceable.
3. Where leases expire during the forecast period, it is assumed that the lease is renewed on the same terms
and conditions as the existing lease.
4. Net property income excludes the effects of straight lining rental income.
5. Total comprehensive (loss) / profit for the period includes the effects of finance costs.
6. Property operating expenditure has been forecast by the property manager on a line-by-line basis based on
a review of historical expenditure.
7. No fair value adjustment is recognised.
8. There will be no unforeseen economic factors that will affect the lessees' abilities to meet their
commitments in terms of existing lease agreements.
5. CATEGORISATION
The Acquisition is a category 2 transaction for Exemplar in terms of the JSE Listings Requirements and
accordingly does not require the approval of Exemplar shareholders.
10 June 2024
Sponsor
Java Capital
Date: 10-06-2024 05:30:00
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