SPEAR REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2015/407237/06)
Share Code: SEA
ISIN: ZAE000228995
LEI: 378900F76170CCB33C50
Approved as a REIT by the JSE
(“Spear”)


UPDATE ON THE IMPLEMENTATION OF THE DISPOSAL OF 15 ON ORANGE


1.     IMPLEMENTATION OF THE DISPOSAL AND RECEIPT OF THE DISPOSAL
       CONSIDERATION

1.1.     Shareholders are referred to the announcement released by Spear on SENS on
         24 October 2022 (“Announcement”), in which Spear advised shareholders of the
         conclusion of a sale of shares agreement (“Agreement”) with Erf 18 Zimbali Coastal
         Resort Proprietary Limited (“Purchaser”) for the disposal of 100% of the issued shares
         in Spear’s wholly-owned subsidiary Blend Property 15 Proprietary Limited, which owns
         the immovable property known as 15 on Orange (“Property”), to the Purchaser for a
         disposal consideration of R246 000 000 (“Disposal Consideration”), as adjusted in
         terms of the Agreement (“Disposal”).

1.2.     As detailed in the Announcement, the Disposal was subject to certain conditions
         precedent (“Conditions Precedent”), including the approval of the Disposal by the
         applicable competition authorities in terms of the Competition Act, No. 89 of 1998
         (“Competition Authorities”).

1.3.     Shareholders were subsequently advised by Spear, in the announcement released on
         SENS on 8 December 2022, that the Competition Authorities unconditionally approved
         the Disposal on 7 December 2022 and that all the Conditions Precedent had
         accordingly been fulfilled.

1.4.     The implementation of the Disposal was finalised on 2 February 2023, on which date
         Spear received the final adjusted Disposal Consideration of R246 000 000. As noted
         in the Announcement, the full Disposal Consideration was received by Spear, since
         the Property was not financed, and no related debt needed to be settled as a result of
         the Disposal.

1.5.     The disposal of the Property has resulted in Spear no longer having any direct real
         estate exposure to the hospitality sub-sector and is a culmination of its divestment
         strategy, as advised to the market.

2.     APPLICATION OF THE DISPOSAL CONSIDERATION

2.1.     As advised in the Announcement, the Disposal Consideration will be utilised to grow
         Spear’s portfolio in a strategy-aligned manner, following a value investment approach.
         However, whilst such strategic investment and growth opportunities are being pursued
         and finalised, the Disposal Consideration was applied as follows:

2.1.1.     certain existing loan facilities of the Spear group, amounting, in aggregate, to
           R161 000 000, were permanently settled; and
2.1.2.     the remaining portion of the Disposal Consideration, in the amount of R85 000 000,
           was paid into (and will be held in) certain of Spear's remaining debt facilities.

2.2.     The aforementioned application of the Disposal Consideration has reduced the Spear
         group loan to value ratio (“LTV”) by 335 bps to 36.8%. Management’s strategic
         objective remains to maintain the group’s normalised LTV within the target range of
         between 38% and 43%, however, given the accretive nature of the debt settlement
         from the Disposal Consideration, rising interest rates and prudent debt portfolio
         management, the group LTV will be kept below the strategic objective range until such
         time as market opportunities, which are aligned with Spear’s value investment
         approach, present themselves within the convenience retail and industrial sectors in
         the Western Cape.


Cape Town
3 February 2023

Sponsor                                              Legal Advisor
PSG Capital                                          Cliffe Dekker Hofmeyr