Delta Property Fund Limited (JSE:DLT) News - Proposed disposal 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”)

PROPOSED DISPOSAL OF FORT DRURY AND SEDIBA PROPERTIES

1.    Introduction
      Delta shareholders are hereby advised that the Company (“Seller”) has entered into agreements (“Agreements”)
      with Central Plaza Investments 199 Proprietary Limited (“Purchaser”), represented by Sellby Hiliza, to dispose of
      its properties (“Disposal”) situated at:

      1.1    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
      1.2    corner of Markgraaff and Zastron Streets, Bloemfontein, together with all buildings and improvements
             thereon, as more commonly known as “Sediba”,

      collectively the “Properties” for a cash consideration of R76.5 million (“Disposal Consideration”).

2.    Rationale and use of proceeds
      Recently the board confirmed the strategy for the Company, as still being underpinned by the 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 continue. Fort Drury and Sediba are considered such assets due to its
      age, location and grade.

      The net proceeds of R74.2 million (net of commission) will be utilised by the Company to reduce the Loan to
      Value (LTV) and vacancy by 0.2%.

3.    Terms and conditions of the Disposal
      
      3.1 Sale
            The Seller has agreed to sell, and the Purchaser has 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
            Purchaser is affected, which date the Company anticipates will be approximately 28 February 2022.

      3.2    Disposal Consideration
             The Disposal Consideration payable for the Properties by the Purchaser is R76.5 million exclusive of VAT,
             payable as follows:

             3.2.1      R60.0 million for Fort Drury; and
             3.2.2      R16.5 million for Sediba,

             payable in cash.

             A refundable deposit of 10% of the Disposal Consideration is payable on signature date of the
             Agreements, with the remaining 90% of the Disposal Consideration payable within 60 days of the
             fulfilment of the condition precedent set out in paragraph 3.3 below.
     3.3   Conditions precedent
           The Disposal is conditional on the fulfilment of the condition precedent that signed resolutions be
           provided by both the Seller’s and Purchaser’s boards and/or Investment Committees within 10 days of
           the signature date of the Agreements, approving the Disposal.

     3.4   Representations and warranties
           The Agreement contains representations and warranties by the parties in favour of one another which
           are standard for a transaction of this nature.

4.   Financial and property-related information in respect of the Properties
                                                   Fort Drury                        Sediba

      Location:                                    Corner of Markgraaf & St          Corner of Markgraaf &
                                                   Andrews Streets,                  Zastron Streets, Bloemfontein
                                                   Bloemfontein


      Gross lettable area:                         10 476m2                          2 743m2
      Weighted average rental as at 31 August      R113/m2                           R0/m2 (currently unoccupied)
      2021:
      Net operating income/(loss)¹:                R19.8 million                     (R0.6 million)
      Effective date of the Disposal:              On or about 28 February           On or about 28 February
                                                   2022, being the anticipated       2022, being the anticipated
                                                   transfer date of the Properties   transfer date of the Properties
                                                   into the name of the              into the name of the
                                                   Purchaser                         Purchaser
      Vacancy rate as at 28 February 20213:        4.5%                              100%
      Value of the Properties as at 28 February    R68 million                       R8.6 million
      20212:
      (Discount)/Premium to market value:          (11.7%)                           91.8%
      Sector:                                      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 2021, which were prepared in terms of International Financial Reporting
            Standards.

     2.    The valuations were performed at 28 February 2021 by Realworx Property Valuations and Real Insight who
           are independent from the Company and registered as a 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 Fort Drury and Sediba
           were 18.4% and 100% respectively.

     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.

5.   Categorisation
     The Disposal is classified as a Category 2 transaction in terms of the JSE Listings Requirements, which merely
     requires an announcement.

Johannesburg
8 November 2021

Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited

Date: 08-11-2021 07:15:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.