1. religion and spirituality
2. christianity
3. catholicism

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
The definitions and interpretations commencing on page 5 of this circular have, where appropriate, been used on this cover page.
If you are in any doubt as to the action you should take, please consult your broker, CSDP, banker, legal advisor, accountant or other professional
advisor immediately.
Action required
If you have disposed of all your linked units, then this circular, together with the attached form of proxy, should be handed to the purchaser of such linked
units or to the broker, CSDP, banker or other agent through whom the disposal was effected.
Beneficial linked unitholders who hold dematerialised linked units through a CSDP or broker who wish to attend the general meeting must request their
CSDP or broker to provide them with the necessary letter of representation to attend the general meeting or must instruct their CSDP or broker to vote on
their behalf in terms of their respective agreements with their CSDP or broker.
Linked unitholders are referred to page 3 of this circular, which sets out the detailed action required of them in respect of the proposed transactions set out in
this circular.
Rebosis does not accept responsibility and will not be held liable for any failure on the part of the CSDP or broker of any holder of dematerialised linked units
to notify such linked unitholder of the action required of them in respect of the proposed transactions set out in this circular.
Rebosis Property Fund Limited
(Registration number 2010/003468/06)
JSE share code: REB
ISIN code: ZAE000156147
(Approved as a REIT by the JSE)
(“Rebosis” or “the company”)
CIRCULAR TO REBOSIS LINKED UNITHOLDERS
relating to:
• the offer by Rebosis to acquire the entire issued A linked unit capital of Ascension that Rebosis does not already own,
by way of a scheme of arrangement, in exchange for the Rebosis A ordinary consideration shares, which scheme of
arrangement constitutes a comparable offer by Rebosis to the Ascension A linked unitholders in terms of section
125(2)(b) of the Companies Act pursuant to the proposal of the B scheme;
• the offer by Rebosis to acquire the entire issued B linked unit capital of Ascension that Rebosis does not already own,
by way of a scheme of arrangement, in exchange for Rebosis ordinary consideration shares;
• authorisation for the Rebosis board to allot and issue and procure the listing of the authorised but unissued
–– Rebosis A ordinary consideration shares required to settle the consideration for the A linked units of Ascension
that Rebosis does not already own; and
–– Rebosis ordinary consideration shares required to settle the consideration for the B linked units of Ascension
that Rebosis does not already own;
• the amendment of the Billion asset management agreement;
and enclosing:
• a notice of general meeting of Rebosis shareholders;
• a form of proxy to vote at the general meeting of Rebosis shareholders for use by certificated linked unitholders and
dematerialised linked unitholders who have elected “own-name” registration only.
Corporate advisor, sponsor and
trustee for debenture holders
Independent reporting accountants
Independent property valuer
Legal advisors
Date of issue: 22 April 2015
This circular is available in English only. Copies of this circular may be obtained from the registered office of the company and the transfer secretaries, at the
addresses set out in the Corporate Information section of this circular during normal office hours from Tuesday, 22 April 2015 to Friday, 22 May 2015, both
days inclusive. This circular will also be available on Rebosis’ website (www.rebosis.co.za) from Tuesday, 22 April 2015.
CORPORATE INFORMATION
Registered office of Rebosis
Rebosis Property Fund Limited
(Registration number 2010/003468/06)
3rd Floor, Palazzo Towers West
Montecasino Boulevard
Fourways, 2191
(PO Box 2972, Northriding, 2162)
Registered office of Ascension
Ascension Properties Limited
(Registration number 2006/026141/06)
25th Floor, 9 Riebeeck Street
Cape Town
8001
(PO Box 6686, Roggebaai, 8012)
Date and place of incorporation of Rebosis
Incorporated on 22 February 2010 in the Republic
of South Africa
Date and place of incorporation of Ascension
Incorporated on 23 August 2006 in the Republic
of South Africa
Independent reporting accountants
SizweNtsalubaGobodo Inc
(Registration number M2005/034639/21)
20 Morris Street East
Woodmead
2191
(PO Box 2939, Saxonwold, 2132)
Corporate advisor
Java Capital Proprietary Limited
(Registration number 2012/089864/07)
2 Arnold Road
Rosebank
2196
(PO Box 2087, Parklands, 2121)
Sponsor and trustee for debenture holders
Java Capital Trustees and Sponsors Proprietary Limited
(Registration number 2006/005780/07)
2 Arnold Road
Rosebank, 2196
(PO Box 2087, Parklands, 2121)
Independent property valuer
Quadrant Properties Proprietary Limited
(Registration number 1995/003097/07)
16 North Road, Cnr Jan Smuts
Dunkeld West, 2196
(P O Box 1984, Parklands, 2121)
Transfer secretaries to Rebosis and Ascension
Computershare Investor Services Proprietary Limited
(Registration number 2004/003647/07)
Ground Floor, 70 Marshall Street
Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Legal advisors
Cliffe Dekker Hofmeyr Inc.
(Registration number 2008/018923/21)
11 Buitengracht Street
Cape Town, 8001
(Private Bag X40, Benmore, 2010)
TABLE OF CONTENTS
The definitions commencing on page 5 of this circular have been used in the following table of contents.
Page
Corporate information
Inside front cover
Action required by Rebosis shareholders
3
Salient dates and times
4
Definitions and interpretations
5
1. Introduction
11
2. Rationale for the Ascension acquisition
12
3. Terms of the Ascension acquisition
12
4. Opinion and recommendation
15
5. Amendment of the Billion asset management agreement
15
6. Forecast statements of comprehensive income
16
7. Pro forma statement of financial position
17
8. The clean-out distribution
17
9. The Ascension property portfolio
17
10. Valuation reports
20
11. Vendors
20
12. General meeting
20
13. Suspension and termination of Ascension’s listing
20
14. History and nature of business
21
15. Strategy
21
16. Prospects
22
17. Asset management
22
18. Property management
24
19. Directors’ emoluments
25
20. Directors’ interests
26
21. Major and controlling linked unitholders/shareholders
27
22. Relationship information
27
23. Material borrowings
28
24. Material contracts
28
25. Material changes
29
26. Adequacy of capital
29
27. Exchange Control Regulations
29
28. Litigation statement
29
29. Directors’ responsibility statement
30
30. Consents
30
31. Preliminary expenses and issue expenses
30
32. Documents available for inspection
30
Annexure 1
Forecast statements of comprehensive income 32
Annexure 2
Independent reporting accountants’ limited assurance report on
the forecast financial information
34
Annexure 3
Pro forma statement of financial position
37
Annexure 4
Independent reporting accountants’ limited assurance report on the unaudited pro forma
statement of financial position of Rebosis
40
1
Independent reporting accountants’ review conclusion on the valuation and existence of
the assets and liabilities acquired
Annexure 6
Details of the Ascension property portfolio
Annexure 7
Independent property valuer’s summary valuation report of the Ascension property portfolio
Annexure 8
Salient features of the Billion Asset Management agreement, the Ascension asset management
agreement and the property management agreements and broking commissions
payable to Billion Property Services
Annexure 9
Material borrowings
Annexure 10
Material contracts
Notice of general meeting of Rebosis shareholders
Form of proxy for certificated and own-name registered dematerialised shareholders
Annexure 5
2
42
44
48
62
87
90
Attached
Attached
ACTION REQUIRED BY REBOSIS SHAREHOLDERS
The definitions and interpretations commencing on page 5 of this circular apply to this section.
THE GENERAL MEETING
A notice convening the general meeting of Rebosis shareholders to be held at 10:00 on Friday, 22 May 2015 at the registered
offices of Rebosis, 3rd Floor, Palazzo Towers West, Montecasino Boulevard, Fourways, 2191 is attached to and forms part of
this circular.
The implementation of the proposed transactions are subject to, inter alia, Rebosis shareholders and in the case of the
amendments to the Billion asset management agreement, Rebosis debenture holders, passing the requisite resolutions at the
general meeting.
Certificated linked unitholders and dematerialised linked unitholders who have elected “own-name” registration in the subregister of Rebosis maintained by a CSDP, who are unable to attend the general meeting but who wish to be represented
thereat, are requested to complete and return the relevant attached form of proxy in accordance with the instructions contained
therein. The duly completed forms of proxy must be received by the transfer secretaries by no later than 10:00 on Wednesday,
20 May 2015 in respect of the general meeting.
Dematerialised linked unitholders who have not elected “own-name” registration in the sub-register of Rebosis maintained by
a CSDP, and who wish to attend the general meeting, must instruct their CSDP or broker timeously so that such CSDP or
broker may issue them with the necessary letter of representation.
Dematerialised linked unitholders who have not elected “own-name” registration in the sub-register of Rebosis maintained by
a CSDP, and who do not wish to attend the general meeting, must provide their CSDP or broker with their instruction for
attendance or voting at the relevant general meeting in the manner stipulated in the agreement between the linked unitholders
concerned and the CSDP or broker governing the relationship between such linked unitholders and his/her CSDP or broker.
These instructions must be provided to the CSDP or broker by the cut-off time and date advised by the CSDP or broker for
instructions of this nature.
Rebosis does not accept responsibility and will not be held liable for any failure on the part of the CSDP of a dematerialised
linked unitholder to notify such linked unitholder of the general meeting or any business to be conducted thereat.
3
SALIENT DATES AND TIMES
2015
Record date to receive this circular
Friday, 17 April
Circular posted on
Wednesday, 22 April
Announcement relating to the issue of the circular (together with the notice of general meeting)
released on SENS on
Wednesday, 22 April
Announcement relating to the issue of the circular (together with the notice of general meeting)
published in the press on
Thursday, 23 April
Last day to trade in order to be eligible to vote at the general meeting
Record date in order to vote at the general meeting
Receipt of forms of proxy in respect of the general meeting of Rebosis shareholders by 10:00 on
Friday, 8 May
Friday, 15 May
Wednesday, 20 May
The general meeting of Rebosis shareholders at 10:00 on
Friday, 22 May
Results of the general meeting released on SENS on
Friday, 22 May
Results of the general meeting published in the press on
Monday, 25 May
Notes:
1. All dates and times in this circular are local dates and times in South Africa. The above dates and times are subject to change. Any changes will be released
on SENS and published in the press.
2. Rebosis linked unitholders are referred to page 3 of this circular for information on the action required to be taken by them.
4
DEFINITIONS AND INTERPRETATIONS
In this circular and the annexures hereto, unless the context indicates otherwise, references to the singular include the plural
and vice versa, words denoting one gender include the others, expressions denoting natural persons include juristic persons and
associations of persons and vice versa, and the words in the first column have the meanings stated opposite them in the second
column, as follows:
“A scheme”
the scheme between Ascension and Ascension A linked unitholders, in terms of which
Rebosis will acquire all of the Ascension A linked units it does not already own in exchange
for the Rebosis A ordinary consideration shares which scheme of arrangement constitutes
a comparable offer by Rebosis to the Ascension A linked unitholders in terms of section
125(2)(b) of the Companies Act pursuant to the proposal of the B scheme;
“A ordinary consideration
shares” or “Rebosis A
ordinary consideration
shares”
approximately 54 324 803 Rebosis A ordinary shares to be issued upon implementation of
the A scheme in exchange for all of the issued A linked units of Ascension that Rebosis does
not already own, based on the swap ratio of 19.34236 Rebosis A ordinary shares for every
100 Ascension A linked units held by an Ascension A linked unitholder, and which
represents the entire issued A ordinary share capital of Rebosis;
“Amatolo Family Trust”
the trustees for the time being of the Amatolo Family Trust (Master’s reference number
IT4244/03) which trust owns the Billion Group, the capital beneficiaries of which are Sisa
Ngebulana’s children and the discretionary income beneficiaries are Sisa Ngebulana and his
children;
“Ascension”
Ascension Properties Limited (Registration number 2006/026141/06), a public company
registered and incorporated in terms of the laws of South Africa and listed on the JSE;
“Ascension group”
collectively, Ascension and its subsidiaries;
“Ascension acquisition”
• the offer by Rebosis to acquire the entire issued A linked unit capital of Ascension that
Rebosis does not already own, in terms of the A scheme; and/or
• the comparable offer by Rebosis to acquire the entire issued B linked unit capital of
Ascension that Rebosis does not already own, in terms of the B scheme;
“Ascension A debenture”
an unsecured variable rate subordinated debenture issued by Ascension having a nominal
value of 399 cents and which is indivisibly linked to an Ascension A share;
“Ascension A linked unit”
an Ascension A linked unit comprising one Ascension A share indivisibly linked to one
Ascension A debenture;
“Ascension A linked
unitholder”
the holder of an Ascension A linked unit;
“Ascension A share”
an A ordinary share of no par value in the share capital of Ascension;
“Ascension Asset Managers”
or “the Manager”
Ascension Property Management Company (Proprietary) Limited (Registration number
2010/010848/07), a private company registered and incorporated in terms of the laws of
South Africa, a wholly-owned subsidiary of Rebosis, which has been appointed by
Ascension to provide asset management services to Ascension in terms of the Ascension
asset management agreement;
“Ascension Asset Managers
share sale agreement”
the agreement dated 3 February 2014, entered into between, inter alia, Rebosis and the
shareholders of Ascension Asset Managers, in terms of which Rebosis acquired the entire
issued share capital of Ascension Asset Managers for a consideration of R150 million, the
salient details of which are set out in Annexure 10;
“Ascension asset management
agreement”
the agreement dated 15 May 2012 entered into between Ascension and Ascension Asset
Managers in terms of which Ascension Asset Managers provides asset management services
to Ascension, the salient details of which are set out in Annexure 8;
“Ascension B debenture”
an unsecured variable rate subordinated debenture issued by Ascension having a nominal
value of 50 cents and which is indivisibly linked to an Ascension B share;
5
“Ascension B linked unit”
an Ascension B linked unit comprising one Ascension B share indivisibly linked to one
Ascension B debenture;
“Ascension B linked
unitholder”
the holder of an Ascension B linked unit;
“Ascension B share”
a B ordinary share of no par value in the share capital of Ascension;
“Ascension linked units”
collectively the Ascension A linked units and/or the Ascension B linked units;
“Ascension linked
unitholders”
collectively, the holders of Ascension A linked units and Ascension B linked units;
“Ascension property
portfolio”
the property portfolio currently owned by Ascension, as further detailed in Annexure 6;
“asset management
agreements”
collectively, the Ascension asset management agreement and the Billion asset management
agreement;
“Ascension outsourcing
agreement”
the agreement dated 3 February 2014 entered into between Ascension, Ascension Asset
Managers and Billion Asset Managers in terms of which the asset management of Ascension
in terms of the Ascension Asset Management Agreement has been outsourced to Billion
Asset Managers;
“B scheme”
the scheme between Ascension and Ascension B linked unitholders, in terms of which
Rebosis will acquire all of the Ascension B linked units it does not already own in exchange
for the Rebosis ordinary consideration shares;
“Billion asset management
agreement”
the agreement dated 28 March 2011, entered into between Rebosis, the Billion Group and
Billion Asset Managers in terms of which Billion Asset Managers provides asset management
services to Rebosis, the salient details of which are set out in Annexure 8;
“Billion Asset Managers” or
“the asset manager”
Billion Asset Managers (Proprietary) Limited (Registration number 2011/005780/07), a
private company registered and incorporated in terms of the laws of South Africa, a whollyowned subsidiary of the Billion Group, which has been appointed by the company to
provide asset management services to the company in terms of the Billion asset management
agreement;
“Billion Group”
Billion Group (Proprietary) Limited (Registration number 1999/025472/07), a private
company registered and incorporated in terms of the laws of South Africa, which is whollyowned by the Amatolo Family Trust;
“Billion Property Services”
Billion Property Services (Proprietary) Limited (Registration number 2005/004106/07), a
private company registered and incorporated in terms of the laws of South Africa and a
wholly-owned subsidiary of the Billion Group;
“Billion property
management agreement”
the agreement dated 28 March 2011, entered into between Rebosis and Billion Property
Services in terms of which Billion Property Services provides the property management
services to Rebosis, the salient details of which are set out in Annexure 8;
“board” or “directors”
the board of directors of Rebosis as set out in page 11 of this circular;
“Broll”
one of the property managers of the Ascension property portfolio being, Broll Property
Group Proprietary Limited (Registration number 2008/027519/07), a private company
registered and incorporated in terms of the laws of South Africa;
“Broll property management
agreement”
the agreement dated 30 July 2012, entered into between Ascension and Broll in terms of
which Broll provides property management services to Ascension, the salient details of
which are set out in Annexure 8;
“business day”
any day other than a Saturday, Sunday or official public holiday in South Africa and in the
event that a day referred to in terms of this circular should fall on a day which is not a
business day, the relevant date will be extended to the next succeeding business day;
6
“capital conversion”
• the conversion of Rebosis’ current linked unit capital structure to an all share structure,
to be effected by way of a scheme, between Rebosis and its debenture holders; and
• the creation of a new class of Rebosis A ordinary shares in the share capital of Rebosis;
“the capital conversion
circular”
the circular issued by Rebosis on Monday, 30 March 2015 in respect of the capital
conversion;
“category 1 acquisition”
an acquisition in respect of which the consideration is payable or raised wholly or in part
by the issue of linked units which is or is anticipated to constitute 30% or more of the
market capitalisation of the issuer or may result in a dilution of 30% or more of the issued
linked units of the issuer, as defined in terms of the Listings Requirements;
“certificated linked
unitholders”
linked unitholders who hold certificated linked units;
“certificated linked units”
linked units which have not yet been dematerialised, title to which is represented by a
linked unit certificate or other document of title acceptable to the board;
“circular” or “this document”
this document dated Wednesday, 22 April 2015 distributed to linked unitholders
containing the circular to linked unitholders and annexures thereto, the notice of general
meeting of shareholders and a form of proxy;
“clean-out distribution record
date”
the record date for participation in:
• the special distribution to be declared by Ascension to the holders of Ascension linked
units of its distributable income; and
• the special distribution to be declared by Rebosis to the holders of Rebosis linked units
of its distributable income,
which record date will be the same as the date on which Ascension linked unitholders must
be recorded in the linked unit register of Ascension in order to receive the scheme
consideration pursuant to the schemes, which date is expected to be on or about Friday,
26 June 2015 or such other date as Ascension, Rebosis and the JSE, as the case may be, may
determine;
“Companies Act”
the South African Companies Act No.71 of 2008, as amended;
“Competition Authorities”
the Competition Commission of South Africa and the Competition Tribunal of South
Africa and/or the Competition Appeal Court of South Africa being the regulatory and/or
judicial authorities established in terms of the Competition Act, 1998;
“conditions precedent”
the conditions precedent to which the Ascension acquisition is subject, as set out in
paragraph 3.7 of this circular;
“corporate advisor”
Java Capital (Proprietary) Limited (Registration number 2012/089864/07), a private
company registered and incorporated in terms of the laws of South Africa, full details of
which are set out in the Corporate Information section;
“consideration shares”
the Rebosis A ordinary consideration shares and the Rebosis ordinary consideration shares;
“cooperation agreement”
the agreement dated 3 February 2014, entered into between Ascension and Rebosis in
terms of which Ascension and Rebosis undertook to each other a duty of utmost good faith
in cooperating to explore a merger of Ascension and Rebosis in order to enhance their
market capitalisation, investor liquidity and prospects, the salient details of which are set
out in Annexure 10;
“CSDP”
a Central Securities Depository Participant appointed by a linked unitholder for purposes
of, and in regard to, dematerialisation and to hold and administer dematerialised linked
units or an interest in dematerialised linked units on behalf of a linked unitholder;
“debenture”
an unsecured variable rate subordinated debenture issued by Rebosis having a nominal
value of R7.26 and which is indivisibly linked to an ordinary share;
“debenture trust deed”
the debenture trust deed in respect of the debentures between Rebosis and the debenture
trustee, as amended from time to time;
7
“debenture trustee” or
“trustee for debenture
holders”
Java Capital Trustees and Sponsors Proprietary Limited (Registration number
2006/005780/07), a private company incorporated and registered in terms of the laws of
South Africa, full details of which are set out in the Corporate Information section;
“Delta”
Delta Property Fund Limited (Registration number 2002/005129/06), a public company
registered and incorporated in terms of the laws of South Africa and listed on the JSE;
“dematerialise” or
“dematerialisation”
the process whereby certificated linked units are replaced by electronic records of ownership
under Strate and recorded in the sub-register of linked unitholders maintained by a CSDP
or broker;
“dematerialised linked units”
linked units which have been dematerialised and incorporated into the Strate system and
which are no longer evidenced by physical documents of title;
“dematerialised linked
unitholders”
linked unitholders who hold dematerialised linked units;
“documents of title”
linked unit certificates, certified transfer deeds, balance receipts and any other documents
of title to linked units acceptable to the board;
“financial year”
the financial year of Rebosis, for the time being ending on 31 August of each year;
“firm intention
announcement”
the announcement setting out the terms of the firm intention by Rebosis to proceed with
an offer to acquire the Ascension linked units, released on SENS on Tuesday,
24 February 2015 and published in the press on Wednesday, 25 February 2015;
“general meeting”
the general meeting of Rebosis shareholders to be held on Friday, 22 May 2015 at the
registered office of the company at 3rd Floor, Palazzo Towers West, Montecasino Boulevard,
Fourways, 2191;
“GLA”
gross lettable area, being the total area of a property that can be rented to a tenant, measured
in m2;
“group” or “Rebosis group”
collectively, Rebosis, its subsidiaries and its associates;
“IFRS”
International Financial Reporting Standards;
“implementation agreement”
the agreement dated 23 February 2015 entered into between Ascension and Rebosis, in
terms of which Ascension and Rebosis agreed to cooperate for the purposes of exploring a
merger between Ascension and Rebosis, pursuant to which Rebosis confirmed its firm
intention to make an offer to acquire the entire linked unit capital of Ascension that
Rebosis does not already own by way of the A scheme and the B scheme, the salient details
of which are set out in Annexure 10;
“independent property
valuer” or “Quadrant
Properties”
Quadrant Properties (Proprietary) Limited (Registration number 1995/003097/07), a
private company registered and incorporated in terms of the laws of South Africa, full
details of which are set out in the Corporate Information section;
“independent reporting
accountants” or
“SizweNtsalubaGobodo”
SizweNtsalubaGobodo Inc. (Registration number M2005/034639/21), a personal liability
company registered and incorporated in terms of the laws of South Africa, full details of
which are set out in the Corporate Information section;
“JHI”
one of the property managers of the Ascension property portfolio being, JHI Properties
(Proprietary) Limited (Registration number 2007/021131/07), a private company
registered and incorporated in terms of the laws of South Africa;
“JHI property management
agreement”
the agreement dated 20 November 2012 entered into between Ascension and JHI in terms
of which JHI provides property management services to Ascension, the salient details of
which are set out in Annexure 8;
“JSE”
Johannesburg Stock Exchange, being the exchange operated by the JSE Limited
(Registration number 2005/022939/06), licensed as an exchange under the Financial
Markets Act (Act 19 of 2012), and a public company registered and incorporated in terms
of the laws of South Africa;
8
“last practical date”
Wednesday, 8 April 2015 being the last practical date prior to the finalisation of this
circular;
“linked unit” or “Rebosis
linked unit”
a Rebosis linked unit comprising one ordinary share indivisibly linked to one debenture;
“linked unitholder” or
“Rebosis linked unitholder
the holder of a Rebosis linked unit;
“Listings Requirements”
the Listings Requirements published by the JSE from time to time;
“m2”
square metres;
“MOI”
the memorandum of incorporation of the company, as amended;
“NAV”
net asset value;
“ordinary consideration
shares” or “Rebosis ordinary
consideration shares”
approximately 43 429 069 Rebosis ordinary shares to be issued upon implementation of
the B scheme in exchange for all of the issued B linked units of Ascension that Rebosis does
not already own based on the swap ratio of 23.54900 Rebosis ordinary shares for every
100 Ascension B linked units held by an Ascension B linked unitholder;
“press”
the Business Day newspaper;
“property management
agreements”
collectively, the Billion property management agreement, the Broll property management
agreement and the JHI property management agreement;
“R” or “Rand”
the South African Rand, the lawful currency of South Africa;
“Rebosis” or “the company”
Rebosis Property Fund Limited (Registration number 2010/003468/06), a public company
registered and incorporated in terms of the laws of South Africa and listed on the JSE;
“Rebosis A ordinary share” or
“A ordinary share”
an A ordinary share of no par value;
“Rebosis property portfolio”
the property portfolio currently owned by Rebosis;
“Regulations”
the Companies Regulations, 2011, published in terms of the Companies Act;
“REIT”
Real Estate Investment Trust which is a company listed on the JSE and has received REIT
status in terms of the Listings Requirements;
“SA” or “South Africa”
the Republic of South Africa;
“scheme”
a scheme of arrangement in terms of section 114 of the Companies Act;
“schemes”
collectively, the A scheme and the B scheme;
“scheme consideration”
collectively, the Rebosis A ordinary consideration shares and the Rebosis ordinary
consideration shares;
“SENS”
the Stock Exchange News Service of the JSE;
“share” or “ordinary share” or
“Rebosis ordinary share”
an ordinary share of no par value in the linked unit capital of Rebosis;
“sponsor” or “trustee for
debenture holders”
Java Capital Trustees and Sponsors Proprietary Limited (Registration number
2006/005780/07), a private company registered and incorporated in terms with the laws
of South Africa, full details of which are set out in the Corporate Information section;
“Strate”
Strate (Proprietary) Limited (Registration number 1998/022242/07), a private company
registered and incorporated in terms of the laws of South Africa, which is licensed to
operate, in terms of the Financial Markets Act (Act 19 of 2012), as amended, and which is
responsible for the electronic settlement system of the JSE;
“TNAV”
tangible net asset value;
9
“transactions” or “proposed
transactions”
collectively:
• the Ascension acquisition; and
• the proposed amendments to the Billion asset management agreement, as detailed in
paragraph 5 of this circular;
“transfer secretaries” or
“Computershare”
Computershare Investor Services Proprietary Limited (Registration number
2004/003647/07), a private company registered and incorporated in terms of the laws of
South Africa, full details of which are set out in the Corporate Information section;
“VAT”
value added tax as defined in the Value Added Tax Act, 1991, as amended; and
“VWAP”
volume weighted average price.
10
Rebosis Property Fund Limited
(Incorporated in the Republic of South Africa on 22 February 2010)
(Registration number 2010/003468/06)
(Approved as a REIT by the JSE)
JSE share code: REB
ISIN code: ZAE000156147
Anna Mokgokong (Independent non-executive chairman)
Sisa Ngebulana (Chief executive officer)
Kameel Keshav (Chief financial officer)
Ken Reynolds (Non-executive director)
Andile Mazwai (Independent non-executive director)
Jaco Odendaal (Independent non-executive director)
Thabo Seopa (Independent non-executive director)
Nomfundo Qangule (Independent non-executive director)
CIRCULAR TO REBOSIS LINKED UNITHOLDERS
1.
INTRODUCTION
1.1
Rebosis currently holds 32.1% of Ascension through its holding of 28 001 628 Ascension A linked units,
comprising approximately 9.1% of Ascension A linked units in issue and 191 939 001 Ascension B linked units,
comprising approximately 51.0% of Ascension B linked units in issue.
1.2
Pursuant to the terms of the cooperation agreement and the subsequent implementation agreement, it was
announced on SENS on Tuesday, 24 February 2015 and published in the press on Wednesday, 25 February 2015,
that Rebosis has notified the Ascension board of Rebosis’ firm intention to make an offer to acquire the entire
B linked unit capital of Ascension that Rebosis does not already own and to make a comparable offer to acquire
the entire A linked unit capital of Ascension that Rebosis does not already own by way of the B scheme and A
scheme, respectively.
1.3
In terms of section 125(2)(b) of the Companies Act, a person must make a comparable offer to acquire securities
of each class of issued securities of a company, if, inter alia, that person alone, or two or more persons acting in
concert, make an offer for any securities of a regulated company that has more than one class of issued securities
which, if accepted, could result in a person, or a number of related or inter-related persons holding securities of
the company entitling the person or persons to exercise 35% or more of the general voting rights associated with
all issued securities of the company.
1.4
The proposal by Ascension of the B scheme gives rise to an obligation by Rebosis to make a comparable offer to
the Ascension A linked unitholders. The A scheme constitutes such comparable offer.
1.5
The acquisition by Rebosis of 100% of the issued linked unit capital of Ascension that Rebosis does not already
own constitutes a category one acquisition for Rebosis in terms of the Listings Requirements, requiring the
approval of Rebosis’ linked unitholders by way of a resolution passed at a general meeting.
1.6
This circular also includes proposed amendments to the Billion asset management agreement.
1.7
The purpose of this circular is to:
1.7.1
provide Rebosis linked unitholders with information relating to the proposed transactions and the
manner in which they will be implemented; and
1.7.2
convene the general meeting to consider and, if deemed fit, approve with or without modification, the
resolutions relating to the proposed transactions, set out in the notice of general meeting of Rebosis
shareholders attached to this circular.
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2. RATIONALE FOR THE ASCENSION ACQUISITION
2.1
Rebosis foresees market conditions in which REITs with a smaller market capitalisation and less liquidity in the
trade of their shares are driven to consolidation and corporate activity in order to best serve the interests of their
investors and tenants.
2.2
Both Rebosis and Ascension share an objective of preserving black management and ownership credentials in
order to continue to be positioned and enhance their offering of office accommodation to government and other
empowerment sensitive tenants on a basis that best advances the interests of their investors.
2.3
Rebosis and Ascension are of the view that the proposed transaction best advances the interests of their investors.
3. TERMS OF THE ASCENSION ACQUISITION
3.1
Overview of Ascension
Ascension, founded in August 2006, is a black managed and substantially black owned property loan stock company
which listed on the JSE on 11 June 2011. Ascension is a property income fund focusing on commercial office
buildings in South Africa with a strong focus towards government and other empowerment sensitive tenants. The
Ascension acquisition, if implemented, will result in Ascension becoming a wholly-owned subsidiary of Rebosis
and will necessitate Ascension’s delisting from the JSE.
3.2
Consideration for Ascension B linked units
In terms of the B scheme, the Ascension B linked units held by Ascension B linked unitholders will be exchanged
for Rebosis ordinary shares based on a swap ratio of 23.54900 Rebosis ordinary consideration shares for every 100
Ascension B linked units held.
3.3
Consideration for Ascension A linked units
3.3.1
In terms of the A scheme, the Ascension A linked units held by Ascension linked unitholders will be
exchanged for newly created Rebosis A ordinary shares based on a swap ratio of 19.34236 Rebosis
A ordinary consideration shares for every 100 Ascension A linked units held. The Rebosis A ordinary
shares equate to the tangible net asset value per Ascension A linked unit.
3.3.2
In accordance with the terms of the Rebosis A ordinary consideration shares, upon the declaration of
a distribution by Rebosis to its shareholders, no such distribution shall be paid to Rebosis ordinary
shareholders unless the Rebosis A ordinary consideration shares have been paid their distribution which
shall be in the same amounts as Ascension A linked units’ entitlement to fixed income distributions.
Rebosis A ordinary shareholders will, upon the declaration of a distribution by Rebosis, be entitled to:
3.3.2.1
a distribution of 0.61780 cents per day per Rebosis A ordinary share for the partial income
period from the clean-out distribution record date to 31 August 2015;
3.3.2.2
a distribution of 114.67143 cents per Rebosis A ordinary share for the interim income period
from 1 September 2015 to and including 29 February 2016 for the financial year ending
31 August 2016; and
3.3.2.3
a distribution of 114.67143 cents per Rebosis A ordinary for the final income period from
1 March 2016 to 31 August 2016 for the financial year ending 31 August 2016.
Upon the declaration of a distribution by Rebosis, the Rebosis A ordinary share distribution entitlement
for the interim income period (from 1 September to the end of February) for the financial year ending
31 August 2017 and the financial years thereafter will be equivalent to 105% of the Rebosis A ordinary
share distribution entitlement for the interim income period in the prior year. The Rebosis A ordinary
share distribution entitlement for the final income period (from 1 March to 31 August) for the financial
year ending 31 August 2017 and the financial years thereafter will be equivalent to 105% of the Rebosis
A ordinary share distribution entitlement for the final income period in the prior year.
3.3.3
12
In the event that Rebosis declares a distribution less than the Rebosis A ordinary share distribution
entitlements determined above, then in such event that lesser amount shall be paid for the relevant
income period, apportioned pro rata to each A ordinary share in issue on the relevant record date. The
difference in the amount paid and the Rebosis A ordinary share distribution entitlements determined
above will not accrue or accumulate to the Rebosis A ordinary shareholders and there shall be no right
to claim any shortfall.
3.3.4
3.4
In addition, the JSE has consented to the creation of the Rebosis A ordinary shares on the basis that:
3.3.4.1
the rights of Rebosis A ordinary shares in relation to voting and liquidation proceeds will
effectively mirror those attaching to Ascension A linked units and no additional voting rights
are created beyond the voting rights of Ascension A linked unitholders;
3.3.4.2
the voting rights attaching to the Rebosis A ordinary consideration shares will account for
less than 25% of the total voting rights applicable to Rebosis shareholders collectively (that is
holders of Rebosis A ordinary consideration shares and Rebosis ordinary shares);
3.3.4.3
Rebosis will only create and issue the Rebosis A ordinary consideration shares in consideration
for Rebosis acquiring the Ascension A linked units pursuant to the A scheme; and
3.3.4.4
no further Rebosis A ordinary consideration shares will be created or issued.
Ascension board undertakings
Under the terms of the implementation agreement, among other things:
3.4.1
Ascension has agreed to propose the A scheme and the B scheme to the Ascension A linked unitholders
and Ascension B linked unitholders, respectively.
3.4.2
Rebosis has received undertakings from Ascension that between the date of the firm intention
announcement being Tuesday, 24 February 2015 and implementation of the relevant scheme expected
to be Monday, 29 June 2015:
3.4.3
3.5
3.4.2.1
Ascension will continue to conduct its business in the ordinary and regular course;
3.4.2.2
Ascension will not take any action which is designed to be prejudicial to the successful
outcome of the schemes;
3.4.2.3
save as publicly announced on SENS up to the date of the implementation of the schemes or
save as may be agreed to by Rebosis in writing, Ascension will not make any acquisitions or
effect any disposals of any of its properties and/or the rental enterprises conducted thereon;
and
3.4.2.4
other than as provided in paragraph 8 below, Ascension will not effect any distributions other
than in the ordinary, normal and regular course in accordance with its historic distribution
policy and practices.
Ascension has agreed that it will not:
3.4.3.1
enter into or participate in any discussions or negotiations regarding a transaction which
would constitute a de facto change of control of Ascension or be reasonably considered to be
likely to preclude the schemes or the implementation of the schemes (“alternative proposal”);
3.4.3.2
participate in any discussions or negotiations regarding an alternative proposal (unless it
constitutes a superior proposal, being a firm intention to make an offer from a bona fide
third party which the Ascension board determines in good faith and through the exercise
of its fiduciary duties would, if consummated, result in a transaction more favourable to the
Ascension linked unitholders, (“superior proposal”));
3.4.3.3
agree to, approve or recommend an alternative proposal (unless it constitutes a superior
proposal); and
3.4.3.4
enter into any agreement related to an alternative proposal (unless it constitutes a superior
proposal).
Capital conversion
In order to proceed with the A scheme, it will also be necessary for Rebosis to adopt the resolutions necessary
to create the Rebosis A ordinary shares. In this regard a circular was issued to Rebosis linked unitholders on
Monday, 30 March 2015 in respect of, inter alia:
3.5.1
the conversion of Rebosis’ capital structure from a linked unit to a share-only structure to be effected by
way of a scheme between Rebosis and its debenture holders;
3.5.2
the amendment of the MOI to enable the scheme of arrangement referred to in paragraph 3.5.1 and the
creation of a new class of Rebosis A ordinary shares;
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3.5.3
the amendment of the debenture trust deed to enable the scheme of arrangement referred to in paragraph
3.5.1;
3.5.4
the increase of Rebosis’ authorised share capital;
3.5.5
the creation of the new Rebosis A ordinary shares;
3.5.6
the adoption of a new MOI by Rebosis to give effect to the changes in Rebosis’ capital structure; and
3.5.7
the subsequent termination of the debenture trust deed.
The implementation of the capital conversion such that Rebosis’ capital structure comprises only Rebosis A ordinary
shares and Rebosis ordinary shares is a condition precedent to each of the schemes.
3.6
Resultant capital structure post the implementation of the Ascension acquisition
3.6.1
Pursuant to the implementation of the Ascension acquisition, 54 324 803 Rebosis A ordinary shares will
be issued at R29.47 per Rebosis A ordinary share and 43 429 069 Rebosis ordinary shares will be issued
at R12.89 per Rebosis ordinary share.
3.6.2
The linked unit capital of Rebosis before the Ascension acquisition and capital conversion is set out
below:
R’m
Authorised share capital
1 000 000 000 ordinary shares of no par value
3.6.3
–
Issued share capital
449 934 135 ordinary shares of no par value
Stated capital
–
1 359
Debenture capital
449 934 135 variable rate subordinated debentures of R7.26 each
3 267
The share capital of Rebosis after the Ascension acquisition and capital conversion is set out below:
R’m
Authorised share capital
5 000 000 000 A ordinary shares of no par value
5 000 000 000 ordinary shares of no par value
–
–
Issued share capital
54 324 803 A ordinary shares of no par value
493 363 204 ordinary shares of no par value
Stated capital
–
–
7 600
Total
7 600
There will be no shares held in treasury.
3.7
Conditions precedent
The Ascension acquisition will be subject to the following conditions precedent:
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3.7.1
the implementation of the capital conversion such that Rebosis’ capital structure comprises only Rebosis
A ordinary shares and Rebosis ordinary shares;
3.7.2
a sufficient increase in the authorised share capital of Rebosis in order for Rebosis to meet all its
obligations arising in relation to the A scheme and the B scheme;
3.7.3
approval by the requisite majority of the Rebosis linked unitholders of the relevant resolutions required
to authorise the implementation of the Ascension acquisition as a “category 1 transaction” in terms of
Rule 9.20 of the Listings Requirements and the allotment, issue and procurement of the listing on the
JSE of the Rebosis ordinary consideration shares and the creation, allotment issue and procurement of
the listing on the JSE of the Rebosis A ordinary consideration shares in accordance with the MOI;
3.7.4
approval by the requisite majority/ies of Ascension A linked unitholders in respect of the A scheme and
Ascension B linked unitholders in respect of the B scheme, respectively, as contemplated in section
115 of the Companies Act and, if required, the approval of the implementation of the relevant special
resolution(s) by the High Court;
3.7.5
that appraisal rights (in terms of section 164 of the Companies Act) are not validly exercised by:
3.7.5.1
in respect of the B scheme, any Ascension B shareholders;
3.7.5.2
in respect of the A scheme, any Ascension A shareholders;
as the case may be, provided that in the event that:
3.7.5.3
in respect of the B scheme, any Ascension B shareholders; or
3.7.5.4
in respect of the A scheme, any Ascension A shareholders,
as the case may be, exercise appraisal rights in terms of section 164 of the Companies Act, Rebosis will
still be entitled to proceed with the relevant scheme if it waives this condition;
3.7.6
all applicable regulatory and statutory approvals are obtained including approval by the Competition
Authorities;
3.7.7
if required in terms of any debt funding agreement entered into by Ascension, the consent of the lender
in terms of such agreement to the acquisition of Ascension by Rebosis; and
3.7.8
prior to the schemes becoming unconditional, there shall not have arisen or occurred (or might reasonably
be expected to arise or occur) a material adverse event which could reasonably be expected to be adverse
with regard to the operations, continued existence, business, condition, assets and liabilities of any of
Ascension and/or Ascension Asset Managers.
Additionally, the A scheme is conditional upon the approval and implementation of the B scheme. The B scheme
is however not conditional upon the approval or implementation of the A scheme. If the schemes are implemented,
the Ascension B linked units and the Ascension A linked units will be delisted from the JSE. If only the B scheme
is implemented, the Ascension A linked units will remain listed on the JSE and the Ascension B linked units,
wholly-owned by Rebosis, may remain listed on the JSE.
All conditions, other than those that are regulatory in nature and not capable of being waived, may be waived by
Rebosis.
4. OPINION AND RECOMMENDATION
5.
4.1
The board of Rebosis is of the opinion that the Ascension acquisition is beneficial to Rebosis and recommends
that Rebosis linked unitholders vote in favour of the resolutions necessary to implement the Ascension acquisition.
4.2
The directors intend voting their Rebosis linked units in favour of the resolutions necessary to implement the
Ascension acquisition.
AMENDMENT OF THE BILLION ASSET MANAGEMENT AGREEMENT
5.1
Shareholders will, at the general meeting, be requested to consider, and if deemed fit, approve, the amendment of
certain terms of the Billion asset management agreement within the parameters specified in paragraph 5.2 below,
on the basis that the board shall be entitled to agree to some or all of those approved amendments, and the specific
terms thereof, provided that the specific terms fall within the parameters specified in paragraph 5.2 below.
Rebosis will however announce the specific terms within the approved parameters specified on SENS at least
5 business days before the date on which the general meeting will be held. Rebosis hereby undertakes not to agree
to any amendments of the Billion asset management agreement other than as specified in the aforementioned
SENS announcement.
5.2
The proposed amendments to the Billion asset management agreement are that:
5.2.1
the monthly asset management fee payable under the Billion asset management agreement by Rebosis to
Billion Asset Managers be amended from 1/12 of 0.3% of the aggregate of the market capitalisation and
the borrowings of Rebosis (“Rebosis EV”) to:
5.2.1.1
1/12 of between 0.3% and 0.4% in respect of the first R10 billion of Rebosis EV; and
5.2.1.2
1/12 of 0.3% of Rebosis EV in excess of R10 billion;
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5.3
5.4
5.2.2
either party is entitled to terminate the Billion asset management agreement by giving three years’ written
notice provided that the earliest date on which such notice may be given to the party be extended from
28 March 2015, as currently provided, to a date falling between 29 March 2015 and 28 March 2020;
5.2.3
in the event of a termination event, as defined in the Billion asset management agreement, Rebosis shall
pay to Billion Asset Managers by way of compensation, the net present value of the specified management
fee for the agreed termination period, being a period of three years from the date of termination. For
the purposes of this calculation, the “specified management fee” will be 0.3% of Rebosis EV for the
12 months immediately preceding the termination event and not the actual management fee for the
12 months immediately preceding the termination event, as currently provided;
5.2.4
if the right to terminate the Billion asset management agreement is exercised before the earliest date on
which notice may be provided as extended in terms of paragraph 5.2.2, the agreed termination period
shall be the three years referred to in paragraph 5.2.3 above plus the remaining period of such extended
period and not the remaining period of the first four years as currently provided.
Rationale for the amendments
5.3.1
The increase in the asset management fee is being proposed to ensure the financial sustainability of the
operations of Billion Asset Managers.
5.3.2
The extension of up to 5 years to the fixed period of the Billion asset management agreement is being
proposed so that the Billion asset management agreement may then be terminated on three years’ notice
which may only be given after the expiry of such extended period. If this extension is not approved, the
Billion asset management agreement may be terminated on three years’ notice which may be given on
or after 28 March 2015 in which event the Billion asset management agreement would terminate three
years thereafter (on 28 March 2018 if notice is given on 28 March 2015). An extension to the minimum
commitment period of Billion Asset Managers ensures continuity of asset management services for an
appropriate period for leases with Government-aligned tenants.
5.3.3
The period in which the net present value of the specified management fee is payable upon a termination
event, as defined in the Billion asset management agreement, is being proposed to be extended to marry
that period with the period of the extension, referred to above.
Exclusions from voting
5.4.1
In terms of paragraph 13.40(a) of the Listings Requirements, whenever a property entity enters into or
is renewing the terms of an asset management contract, the issuer and/or its directors cannot enter into,
or renew, such a contract without a majority of the votes cast by security holders (excluding any parties
or their associates who are party to, or have an interest in, the contract).
5.4.2
Because Sisa Ngebulana is a beneficiary of the Amatolo Family Trust which in turn holds 100% of the
issued share capital of Billion Asset Managers, being the asset manager and a party to the proposed
amendment to the Billion asset management agreement, each of Sisa Ngebulana and his associates will
be excluded from voting on the resolution authorising and approving the amendments to the Billion
asset management agreement. However, Sisa Ngebulana and his associates may be taken into account in
determining a quorum at the general meeting.
6. FORECAST STATEMENTS OF COMPREHENSIVE INCOME
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6.1
As a result of the implementation of the Ascension acquisition, Ascension will become a subsidiary of Rebosis and
its year end will be changed from 30 June to 31 August. Ascension’s forecasts, which are set out in Annexure 1
of this circular (“Ascension forecasts”), have been prepared for the one month ending 30 June 2015 and the
year ending 30 June 2016 (collectively the “forecast periods”). The Ascension forecasts have been prepared on
the assumption that the effective date of the Ascension acquisition will be 1 June 2015, and on the basis that
Ascension forecasts include forecast results for the duration of the forecast periods.
6.2
The Ascension forecasts, including the assumptions on which they are based and the financial information from
which they are prepared, are the responsibility of the directors of Rebosis.
6.3
The Ascension forecasts must be read in conjunction with the independent reporting accountants’ limited
assurance report thereon as contained in Annexure 2 of this circular.
7.
PRO FORMA STATEMENT OF FINANCIAL POSITION
7.1
The pro forma statement of financial position of Rebosis, after the Ascension acquisition, assuming no capital
conversion, is set out in Annexure 3 of this circular.
7.2
The pro forma statement of financial position of Rebosis, including the assumptions on which it is based and the
financial information from which it has been prepared, are the responsibility of the board of Rebosis.
7.3
The independent reporting accountants’ limited assurance report on the pro forma statement of financial position
of Rebosis is set out in Annexure 4 of this circular.
7.4
The independent reporting accountants’ review report on the value and existence of the assets and liabilities
acquired by Rebosis is set out in Annexure 5 of this circular.
8. THE CLEAN-OUT DISTRIBUTION
9.
8.1
The Rebosis consideration shares are to be issued “ex” entitlement to any distribution for the period from
1 March 2015 to the clean-out distribution record date.
8.2
In order to achieve this, the directors will declare and pay a special distribution to Rebosis linked unitholders for
the period from 1 March 2015 to the clean-out distribution record date.
8.3
In addition, the directors of Ascension will declare and pay a special distribution to Ascension linked unitholders
for the period from 1 January 2015 to the clean-out distribution record date.
8.4
As a consequence of the special distribution for the period ending on the clean-out distribution record date,
Rebosis’ distribution in respect of the Rebosis A ordinary shares and the Rebosis ordinary shares for the financial
year ending 31 August 2015 will be for the period from the clean-out distribution record date to 31 August 2015.
THE ASCENSION PROPERTY PORTFOLIO
9.1
Overview of the Ascension property portfolio
Ascension’s property portfolio based on valuations performed by the independent property valuer as at
31 December 2014 amounts to R3 721 400 000 and consists of 28 properties with a GLA of 316 567m2.
The detailed list of the properties comprising the Ascension property portfolio is set out in Annexure 6 of this
circular.
9.2
Analysis of the Ascension property portfolio
An analysis of the Ascension property portfolio as at the last practical date in respect of geographic, sectoral and
tenant spread as well as the vacancy and lease expiry profile is provided in the charts and tables below.
9.2.1
Geographic profile
Geographic profile by GLA
Geographic profile by gross rentals
17
9.2.2
Sectoral profile
Sectoral profile by GLA
9.2.3
Sectoral profile by gross rentals
Tenant profile
Tenant profile by GLA
Tenant profile by gross rentals
For the charts above the following key is applicable:
A. Large national tenants, large listed tenants, government and major franchisees. These include,
inter alia national government, Game, KFC, Telkom, Nedbank, Mr Price, Capitec and Spar.
B. National tenants, listed tenants, franchisees and medium to large professional firms. These include,
inter alia Planet Fitness and House of Monatic.
C. Other (approximately 240 tenants).
9.2.4
Vacancy profile
The vacancy profile indicated below split out the vacancy percentage as indicated under the lease expiry
profile.
Vacancy by sector
18
9.2.5
Lease expiry profile
Retail
GLA
Retail
GR*
Office
GLA
Office
GR*
Vacancy
June 2015
June 2016
June 2017
June 2018
June 2019
June 2020 and beyond
0.6%
26.5%
12.0%
3.7%
7.5%
7.6%
42.0%
–
28.9%
13.9%
5.4%
11.8%
10.8%
29.3%
10.0%
21.2%
21.3%
3.4%
11.7%
13.0%
19.4%
–
24.7%
22.9%
3.4%
13.4%
15.9%
19.7%
Total
100%
100%
100%
100%
* GR = gross rental revenue
Industrial
GLA
Industrial
GR*
Total
GLA
Total
GR*
Vacancy
June 2015
June 2016
June 2017
June 2018
June 2019
June 2020 and beyond
0.7%
9.4%
12.0%
31.2%
–
8.8%
37.7%
–
8.6%
20.1%
16.0%
–
4.8%
50.5%
8.4%
20.8%
19.7%
5.5%
10.4%
12.2%
22.9%
–
24.7%
21.7%
4.0%
12.8%
14.9%
21.8%
Total
100%
100%
100%
100%
* GR = gross rental revenue
9.2.6
Rental escalations and rental per square metre
The weighted average rental per square metre for the Ascension property portfolio for the twelve months
ending 31 December 2014 is as follows:
Sector
Rate/m²
Office
Retail
Industrial
R89.87
R112.90
R35.14
Total
R87.90
The weighted average rental escalation profile, based on existing leases by GLA and by sector, in the
Ascension property portfolio for the twelve months ending 31 December 2014 is as follows:
Sector
%
Office
Retail
Industrial
7.13%
8.66%
8.53%
Total
8.54%
The average annualised yield on the Ascension property portfolio based on the purchase price and the
forecast net property income for the twelve months ending 31 December 2015 is 9.83%.
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10. VALUATION REPORTS
10.1 The Ascension property portfolio was valued by Peter Parfitt of Quadrant Properties, who is an independent
external registered professional valuer in terms of the Property Valuers Profession Act, No 47 of 2000.
10.2 Detailed valuation reports have been prepared in respect of each of the properties comprising the Ascension
property portfolio and are available for inspection in terms of paragraph 32. A summary of the valuation reports
in respect of the Ascension property portfolio has been included in Annexure 7 of this circular.
11. VENDORS
11.1 The Ascension acquisition is the proposed acquisition of all of the Ascension B linked units and possibly all of the
Ascension A linked units in issue and not already held by Rebosis pursuant to the schemes.
11.2 The vendors have not guaranteed the book debts. The implementation agreement entered into governing the
Ascension acquisition contains warranties which are usual for transactions of this nature.
11.3 The implementation agreement does not preclude the vendors from carrying on business in competition with the
company nor does the implementation agreement impose any other restrictions on the vendors and therefore no
payment in cash or otherwise has been made in this regard.
11.4 The business of Ascension will remain unchanged and any tax liabilities of Ascension, including tax liabilities for
accrued taxation to date of the Ascension acquisition, will be settled in the ordinary course.
11.5 The total Rand equivalent amount to be paid for the Ascension A linked units and Ascension B linked units being
those linked units not already owned by Rebosis will be R2 160.698 million at an equivalent price of R5.70 per
Ascension A linked unit and an equivalent price of R3.04 per Ascension B linked unit based on the closing price
of R12.89 per Rebosis linked unit on 20 February 2015. The net asset value of Ascension as at 31 December 2014
was R2 267.679 million. The difference between the purchase price payable and the proportionate value of the
net asset value acquired by Rebosis of R578.541 million has been recognised as goodwill.
11.6 Other than in their capacity as holders of Ascension linked units and/or holders of Rebosis linked units, no
director or promoter of Rebosis (or any partnership, syndicate or other association in which a promoter or director
had an interest) has any beneficial interest, direct or indirect in the Ascension acquisition.
11.7 No cash or securities have been paid or benefit given to any director within the three preceding years of this
circular or is proposed to be paid or given to any promoter (not being a director).
11.8 The Ascension linked units to be acquired in terms of the Ascension acquisition have not been transferred to
Rebosis and the Ascension linked units have not, to the knowledge of Rebosis, been ceded or pledged.
12. GENERAL MEETING
12.1 A general meeting of Rebosis shareholders will be held at 10:00 on Friday, 22 May 2015 at the registered office
of the company at 3rd Floor, Palazzo Towers West, Montecasino Boulevard, Fourways, 2191 for shareholders
to consider and, if deemed fit, pass with or without modification the resolutions set out in the notice of general
meeting of shareholders attached to this circular.
12.2 Details of the actions required by Rebosis shareholders are set out on page 3 of this circular.
13. SUSPENSION AND TERMINATION OF ASCENSION’S LISTING
Subject to both of the schemes becoming unconditional in accordance with their terms, the JSE has granted approvals for
the suspension of the listing of Ascension A linked units and Ascension B linked units with effect from the commencement
of trading on the JSE on Monday, 22 June 2015 and the termination of the listing of Ascension A linked units and
Ascension B linked units from the commencement of trading on Monday, 29 June 2015.
20
14. HISTORY AND NATURE OF BUSINESS
14.1 Established by the Billion Group, Rebosis was the first black-managed and substantially black-held property fund
that listed on the JSE on 17 May 2011. Rebosis was incorporated as a private company on 22 February 2010 and
converted to a public company on 16 November 2010. On 2 December 2010, the linked units in the company
were acquired by the Amatolo Family Trust with the intention of using the company as the vehicle to list the
Billion Group’s portfolio of office and retail properties.
14.2 Currently, Rebosis owns a high growth defensive portfolio of properties. Rebosis’ primary objective is to grow its
portfolio and distributions by investing in high-quality retail and commercial properties yielding secure capital
and income returns for shareholders.
14.3 At 31 August 2014, Rebosis had a market capitalisation of R4.23 billion and assets under management of
R7.6 billion.
14.4 At 31 August 2014, the portfolio, valued at R6.9 billion, consisted of 19 properties with a total gross lettable area
of 415 048m². As at 31 August 2014, the portfolio, which is located in Gauteng, the Eastern Cape, KwaZuluNatal and North West Provinces, comprised 44% retail, 54% office and 2% industrial (by value).
14.5 The retail portfolio comprises four high quality dominant regional shopping malls underpinned by strong anchor
and national tenants.
14.6 The office portfolio consists of 14 buildings which are well located in nodes attractive to government tenants.
These are mainly single tenanted buildings let to the National Department of Public Works under long leases.
The office portfolio represents a sovereign underpin to a substantial portion of the earnings and shields it from
private sector risks such as tenant insolvency and default.
14.7 The company’s only industrial property is a specialised single tenanted industrial warehouse located in Selby,
Johannesburg, occupied under a triple net lease which is expiring in December 2019.
14.8 At 31 August 2014, vacancies for the total portfolio were 2.4%, including strategic vacancies created at Bloed
Street Mall for redevelopment.
15. STRATEGY
15.1 Rebosis’ growth strategy forms the basis for the company’s integrated thinking and reporting.
15.2 Rebosis’ core strategic objective is to be a retail-biased fund focused on well-located retail, office and industrial
properties yielding strong, secure income and high capital returns.
15.3 The long-term intention is to position Rebosis as one of the fastest growing investment funds in South Africa in
terms of both value and return on investment, by:
15.3.1 securing long term office leases with national government tenants;
15.3.2 growing the portfolio through further acquisitions;
15.3.3 investing in dominant regional shopping centres at early stages of maturity; and
15.3.4 leveraging the right of first refusal to acquire properties from the significant development pipeline of the
Billion Group.
15.4 Rebosis’ acquisition strategy is well thought-out with clearly defined investment criteria:
15.4.1 Retail
Dominant shopping centres not replicable in their respective catchment areas; >20 000m² or valued
>R250 million.
15.4.2 Offices
Preferably large single tenant buildings under long leases; >10 000m² or valued >R100 million.
15.4.3 Industrial
Large, single tenanted industrial warehouses; >10 000m² or valued >R80 million.
21
16. PROSPECTS
16.1 Overall the group’s good tenant performance underpins the portfolio’s resilience. The retail portfolio is
predominantly let to major national chains for optimal defensiveness. Entrenched regional dominance in underserviced areas further shields the retail portfolio to some extent from macroeconomic headwinds. In addition,
there is growth potential in the form of additional or increasing revenue streams from turnover rental, advertising
and parking revenue.
16.2 Rebosis also intends to take advantage of redevelopment opportunities in shopping centres in light of increasing
tenant demand, as well as other optimisation projects to unlock value and strengthen long-term earnings potential.
The group will continue to pursue quality growth opportunities without necessarily coming to market for capital.
Rebosis has the first right of refusal on a pipeline of high quality regional centres and mixed use developments
being developed by the Billion Group.
17. ASSET MANAGEMENT
The asset management of the Rebosis property portfolio is undertaken by Billion Asset Managers. The salient features
of the Billion asset management agreement are set out in Annexure 8. The Billion asset management agreement will be
available for inspection in terms of paragraph 32.
The asset management function of the Ascension property portfolio has been outsourced to Billion Asset Managers by
Ascension Asset Managers. The salient features of:
• the Ascension Asset Managers share sale agreement are set out in Annexure 10; and
• the Ascension asset management agreement are set out in Annexure 8
and will be available for inspection in terms of paragraph 32 below.
17.1 Billion Asset Managers
17.1.1 The directors are Sisa Ngebulana, Kameel Keshav, Nigel Adriaanse, Vuyokazi Njongwe and Mande
Ndema. The full names, ages, business addresses, qualifications, position and experience of the directors
of Billion Asset Managers are outlined below:
22
Name and age
Business address
Qualification
Position
Experience
Sisa Ngebulana (48)
3rd Floor, Palazzo Towers West, Montecasino Boulevard, Fourways
BJuris, LLB, LLM
Chief executive officer
Sisa founded the Billion Group in 1998 and Rebosis in 2010. Sisa has won various
awards: Entrepreneur of the Year Award (2006), Pioneer award (2014), African
Business Excellence (2014).
An admitted attorney of the High Court of South Africa, he practised with
Jan S de Villiers Attorneys in commercial litigation before joining Eskom for seven
years as legal counsel specialising in property and finance.
He is a past president of the South African Council of Shopping Centres, and has
been a director of the Attfund group, Truworths International and the Construction
Industry Development Board. Sisa has single handedly developed a number of
regional shopping malls in South Africa, including Hemingways Mall, Forrest Hill
City, Mdantsane City, B.T. NGebs City and Bay West City.
Name and age
Business address
Qualification
Position
Experience
Kameel Keshav (35)
3rd Floor, Palazzo Towers West, Montecasino Boulevard, Fourways
BCom, HDip.Acc, CA(SA)
Chief financial officer
Kameel is a Chartered Accountant in South Africa. Before joining Rebosis Kameel
headed up the commercial function for Orica, where he oversaw all commercial
activity in Africa, Middle East and Continental Europe. From 2011 to 2013
Kameel was a finance business partner for Kraft Foods in Central and East Africa
where he was responsible for financial compliance together with a strong focus on
alignment through financial review to the strategic objectives of the business.
Name and age
Business address
Qualification
Position
Experience
Nigel Adriaanse (45)
3rd Floor, Palazzo Towers West, Montecasino Boulevard, Fourways
B.Com (Accounting)
Director of operations for Billion Asset Managers
Nigel is the director of operations for Billion Asset Managers. He has over 12 year’s
industry experience across a wide range of sectors within the property industry.
Having worked in several industries as a business development and BEE consultant
he embarked on a career in property by joining JHI as a property and financial
manager looking after several portfolios in the Western Cape and Gauteng.
Subsequently he moved to Old Mutual Properties’ retail division as financial
manager in Gauteng before moving to the new business development division
where he gained valuable experience helping to develop new opportunities
previously uncharted in the South African retail sector. After joining African
Alliance Properties as a commercial asset manager he helped the company to grow
to a substantial fund and helped the management team in listing the company
during 2012 under the name Ascension Properties Limited and was appointed
senior asset manager.
Name and age
Business address
Qualification
Position
Experience
Vuyokazi Njongwe (42)
3rd Floor, Palazzo Towers West, Montecasino Boulevard, Fourways
B Juris, LLB
Corporate affairs executive
Vuyokazi holds a B Juris and an LLB Honours Law Degree from the University of
the Western Cape. She is an admitted attorney and Notary Public of the High
Court of South Africa. She practised as an attorney at Sonnenberg Hoffman
Galombik in Cape Town, specialising in property, insurance litigation, commercial
litigation and general commercial matters.
Vuyokazi thereafter worked for FNB Corporate where she gained experience in
various departments. Through FNB Corporate she earned her experience in
international trade financing, debt restructuring, tailoring various finance products,
property finance as well as business development and client portfolio management.
Vuyokazi joined the Billion Group as legal counsel and is now a full-time director
at Billion Group. She is now responsible for various property developments within
the Billion Group.
Name and age
Business address
Qualification
Mande Ndema (40)
3rd Floor, Palazzo Towers West, Montecasino Boulevard, Fourways
B.Soc.Sci, LLB, Postgraduate Diploma in Marketing & Supply Chain Management,
Programme for Management Development, Certificate in Property Investment
and Practice
Company secretary
Mande is an admitted attorney of the High Court of South Africa having specialised
in commercial law. He now specialises in all aspects of corporate governance
responsible for the flow of information to the board and its committees and
ensuring compliance with board procedures, legislation and regulations.
Position
Experience
17.1.2 The business address is 3rd Floor, Palazzo Towers West, Montecasino Boulevard, Fourways, 2191.
17.1.3 Billion Asset Managers is wholly-owned by the Amatolo Family Trust. Sisa Ngebulana is a beneficiary
of the Amatolo Family Trust which owns 8.43% of the linked units in Rebosis.
17.1.4 Save that Billion Asset Managers provides asset management services to Ascension pursuant to the
Ascension outsourcing agreement, the salient details of which are set out in Annexure 10, Billion Asset
Managers do not provide asset management services to any other listed entity.
23
18. PROPERTY MANAGEMENT
Billion Property Services has been appointed to provide property management services to Rebosis in respect of the
Rebosis property portfolio.
The property management function of the Ascension property portfolio has been outsourced to Billion Property
Services, Broll and JHI. Billion Property Services provides property management services to Ascension’s Gauteng
portfolio excluding those properties located in Nelspruit (“the Nelspruit properties”). The Nelspruit properties are
currently being managed by Broll until 31 July 2015. Thereafter the property management function of Ascension’s
Nelspruit properties will be undertaken by Billion Property Services with effect from 1 August 2015. JHI manages
Ascension’s properties located in Cape Town.
The salient features of the property management agreements are set out in Annexure 8 and will be available for inspection
in terms of paragraph 32 below.
18.1 Billion Property Services
18.1.1 The directors of Billion Property Services are Sisa Ngebulana, Oratile Mosetlhi, Vuyokazi Njongwe and
Rachel Klaasen.
18.1.2 The business address is 3rd Floor, Palazzo Towers West, Montecasino Boulevard, Fourways, 2191.
18.1.3 Billion Property Services is wholly-owned by the Amatolo Family Trust. Sisa Ngebulana is a beneficiary
of the Amatolo Family Trust which currently owns 8.43% of the linked units in Rebosis.
18.2 Broll
18.2.1 The directors of Broll are Bev Esterhuizen, Donovan Agar, Ken Gerber, Leonard Michau, Roger Hunting,
Thandi Bengu-Towo, David Alcock, Jonothan Broll (chairman), Royden du Plooy, Noluthando Gosa,
and Malcolm Horn (chief executive officer).
18.2.2 The business address is Broll House, 27 Fricker Road, Illovo, Sandton, 2196.
18.2.3 The shareholders of Broll are Rowmoor Investments 579 (Pty) Ltd (80%) and Akhona Nalapha
Investments Proprietary Limited (20%).
18.3 JHI
18.3.1 The directors of JHI are JE Wellsted, M van der Walt and J Boshoff.
18.3.2 The business address is 2 Norwich Close, Sandton, 2196.
18.3.3 JHI is a wholly-owned subsidiary of Nevada Trading Proprietary Limited, which in turn has as its
shareholders Excellerate Investment Holdings Limited (52.94%), P.E.A.C.E Foundation (25.01%) and
Rehna Investments Proprietary Limited (22.05%).
24
19. DIRECTORS’ EMOLUMENTS
19.1 The directors’ remuneration for the year ended 31 August 2014 is as follows:
Directors
fees
R’000
Salary
and
allowances
R’000
Other
benefits and
payments
R’000
Performance
bonus
R’000
Total
R’000
–
–
–
3 496
1 808
–
257
86
–
2 103
981
–
5 856
2 875
–
330
440
230
270
270
290
370
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
330
440
230
270
270
290
370
2 200
5 304
343
3 084
10 931
Executive directors
Sisa Ngebulana
Janys Finn1
Kameel Keshav2
Non-executive directors
Andile Mazwai
Anna Mokgokong
Jaco Odendaal
Ken Reynolds
Nomfundo Qangule
Thabo Seopa
Sindiswa Zilwa3
Notes:
1. Resigned with effect from 30 November 2014.
2. Appointed with effect from 1 December 2014.
3. Resigned with effect from 18 March 2015.
19.2 Save as set out in the tables above, the directors of Rebosis as at the last practical date did not receive any
emoluments for the twelve months ended 31 August 2014 in the form of:
19.2.1 fees for services as a director;
19.2.2 management, consulting, technical or other fees paid for such services rendered, directly or indirectly,
including payments to management companies, a part of which is then paid to a director of the company;
19.2.3 basic salaries;
19.2.4 bonuses and performance-related payments;
19.2.5 sums paid by way of expense allowance;
19.2.6 any other material benefits received;
19.2.7 contributions paid under any pension scheme; or
19.2.8 any commission, gain or profit-sharing arrangements.
19.3 No linked unit options, share options or any other right has been given to a director of the company in respect of
providing a right to subscribe for linked units in Rebosis.
19.4 No linked units or shares have been issued and allotted in terms of a linked unit purchase/option scheme or a
share purchase/option scheme for employees.
19.5 The executive directors are remunerated by Billion Asset Managers. The directors’ fees of non-executive directors
are payable by Rebosis. Sisa Ngebulana is a trustee and beneficiary of the Amatolo Family Trust, which owns
100% of the share capital of the Billion Group. Billion Asset Managers and Billion Property Services are wholly
owned subsidiaries of the Billion Group. Accordingly, Sisa Ngebulana has an indirect interest in any and all
amounts paid to and transactions entered into by Rebosis which result in amounts becoming payable to Billion
Asset Managers and Billion Property Services. Fees and commissions payable by Rebosis and third party
vendors to Billion Property Services are set out in Annexure 8. Other than this, the directors did not receive
any remuneration or benefit in any form from any subsidiary, joint venture or other third party management or
advisory company.
19.6 The company has not entered into any contracts relating to the directors’ and managerial remuneration, secretarial
and technical fees and restraint payments.
25
20. DIRECTORS’ INTERESTS
20.1 Directors’ interests in Rebosis linked units
20.1.1 Set out below are the interests of directors in the company at the last practical date. This includes
the interest of persons who are no longer directors, but resigned during the last 18 months. Direct
and indirect beneficial interests are disclosed. In addition, interests of associates of directors, where the
director has no beneficial interest, are separately disclosed (this relates principally to the holdings of
spouse and minor children):
Director
Direct
Indirect
Nonbeneficial
associates
Sisa Ngebulana
Kameel Keshav^
Janys Finn*
Andile Mazwai
Anna Mokgokong
Jaco Odendaal
Nomfundo Qangule
Ken Reynolds
Thabo Seopa
Sindiswa Zilwa~
–
–
–
–
–
–
–
36 988
–
–
36 571 937
–
–
678 115
–
–
–
–
–
12 130
–
–
–
–
–
–
–
–
–
–
36 571 937
–
–
678 115
–
–
–
36 988
–
12 130
8.43
–
–
0.16
–
–
–
0.01
–
–
Total
36 988
37 262 182
–
37 299 170
8.59
Beneficial
Total
%
* Resigned with effect from 30 November 2014.
^ Appointed with effect from 1 December 2014.
~ Resigned with effect from 18 March 2015.
20.1.2 There have been no changes to interests of the directors of Rebosis in Rebosis linked units between
31 August 2014 and the last practical date.
20.1.3 There will be no change to the number of linked units held by the directors of Rebosis on implementation
of the schemes.
20.2 Directors of the Billion Asset Managers’ interests in Rebosis shares
20.2.1 Other than Sisa Ngebulana, who is also a director of Billion Asset Managers, neither Billion Asset
Managers nor its directors has any beneficial interest, directly or indirectly, in the linked unit capital of
Rebosis as at the last practical date.
20.2.2 There will be no change to the number of linked units held by the Billion Asset Managers and its
directors post the implementation of the Ascension acquisition.
20.3 Directors of Rebosis and directors of Billion Asset Managers’ interests in transactions
20.3.1 Save for the directors’ interests in Rebosis linked units, as set out in paragraph 20.1.1 above, none
of the directors of Rebosis will benefit directly or indirectly, in any manner as a consequence of the
implementation of the Ascension acquisition.
20.3.2 Sisa Ngebulana is a trustee and beneficiary of the Amatolo Family Trust, which owns 100% of the share
capital of the Billion Group. Billion Asset Managers and Billion Property Services are wholly-owned
subsidiaries of the Billion Group. Accordingly, Sisa Ngebulana has an indirect interest in any and all
amounts paid to and transactions entered into by Rebosis which result in amounts becoming payable
to Billion Asset Managers and Billion Property Services. Fees and commissions payable by Rebosis and
third party vendors to Billion Property Services are set out in Annexure 8.
20.3.3 Other than as set out in paragraph 20.3.1 and 20.3.2 above, no directors of Rebosis or Billion Asset
Managers, including a director who resigned during the last 18 months, has or had any material
beneficial interest, direct or indirect, in transactions that were effected by Rebosis during the current
or immediately preceding financial year or during any earlier financial year and which remain in any
respect outstanding or unperformed.
26
20.3.4 Pursuant to the Ascension Asset Managers share sale agreement, Rebosis owns the entire issued share
capital of Ascension Asset Managers, the asset manager of the Ascension property portfolio. In terms
of the Ascension outsourcing agreement, the asset management of the Ascension property portfolio is
outsourced to Billion Asset Managers, the salient details of which are set out in Annexure 8.
21. MAJOR AND CONTROLLING LINKED UNITHOLDERS/SHAREHOLDERS
21.1 Set out below are the names of linked unitholders, other than directors who, directly or indirectly, are beneficially
interested in 5% or more of the issued linked units of Rebosis as at the 27 March 2015.
Public Investment Corporation Limited^
Coronation Fund Managers
Stanlib
Amatolo Family Trust
Sanlam
Old Mutual
Total
Number
of units
%
87 101 220
38 907 820
38 751 126
36 571 937
25 232 933
24 214 327
19.36
8.65
8.61
8.13
5.61
5.38
250 779 363
55.74
^excludes the 15 923 566 shares issued to the Public Investment Corporation Limited as announced on SENS on 7 April 2015
21.2 Set out below are the names of Rebosis shareholders, other than directors who, directly or indirectly, are expected
to be beneficially interested in 5% or more of the issued shares of Rebosis post the implementation of the capital
conversion and the Ascension acquisition. The information below reflects the dilution of the existing major
shareholders of Rebosis as a result of the issue of Rebosis A ordinary consideration shares and Rebosis ordinary
consideration shares and includes the major shareholders of Ascension who will receive the Rebosis A ordinary
consideration shares and Rebosis ordinary consideration shares pursuant to the schemes.
Number
of
A ordinary
shares
% of
A ordinary
shares
Number
of ordinary
shares
% of
ordinary
shares
% of
all shares
in issue
Public Investment Corporation Limited
–
Coronation Fund Managers
14 482 496
Stanlib
4 575 208
Amatolo Family Trust
–
Sanlam
5 575 329
–
26.66
8.42
–
10.26
96 621 168
38 907 820
38 751 126
36 571 937
25 232 933
19.58
7.89
7.85
7.41
5.11
17.64
9.75
7.91
6.68
5.63
Total
45.34
236 084 984
47.85
47.60
24 633 033
21.3 As at the last practical date Rebosis did not have a controlling linked unitholder. Assuming implementation of
the capital conversion and the Ascension acquisition, it is anticipated that Rebosis will not have a controlling
shareholder.
22. RELATIONSHIP INFORMATION
22.1 Save for Sisa Ngebulana, who is a beneficiary of the Amatolo Family Trust, the holder of 100% of the share capital
of the Billion Group, Billion Property Services and Billion Asset Managers, none of the directors, promoters,
asset manager or property manager, have any beneficial interests, direct or indirect, in relation to any property
held or property to be acquired by the company nor are they contracted to become a tenant of any part of the
property of the company.
22.2 Other than Sisa Ngebulana who is a director of Rebosis and also a director of Billion Asset Managers and Billion
Property Services, and who holds an interest in Billion Asset Managers and Billion Property Services, there is no
relationship between any parties mentioned in paragraph 22.1 above and another person that may conflict with
a duty to the group.
22.3 Neither Billion Asset Managers, nor its directors have any beneficial interest, direct or indirect, in any securities
or participatory interests to be issued by Rebosis in order to finance the acquisition of any properties in the
Rebosis property portfolio.
27
22.4 Neither Billion Property Services, nor its directors have any beneficial interest, direct or indirect, in any securities
or participatory interests to be issued by Rebosis in order to finance the acquisition of any properties in the
Rebosis property portfolio.
22.5 Neither Broll, nor its directors have any beneficial interest, direct or indirect, in any securities or participatory
interests to be issued by Rebosis in order to finance the acquisition of any properties in the Rebosis property
portfolio.
22.6 Neither JHI, nor its directors have any beneficial interest, direct or indirect, in any securities or participatory
interests to be issued by Rebosis in order to finance the acquisition of any properties in the Rebosis property
portfolio.
22.7 The vendors did not have any beneficial interest, direct or indirect, in any securities or participatory interests to
be issued by Rebosis in order to finance the acquisition of any properties in the Rebosis property portfolio.
22.8 Save for Sisa Ngebulana, who is a beneficiary of the Amatolo Family Trust, the holder of 100% of the share
capital of the Billion Group, Billion Property Services and Billion Asset Managers, the directors of Rebosis,
the directors of Billion Asset Managers, the directors of Billion Property Managers, the directors of Broll, the
directors of JHI and the promoters have not had a material beneficial interest, whether directly or indirectly, in
the acquisition or disposal of any properties of the company during the preceding two years.
23. MATERIAL BORROWINGS
23.1 Details of material borrowings made to the Rebosis group and the Ascension group are set out in Annexure 9.
23.2 None of the material borrowings listed in Annexure 9 have any redemption or conversion rights attaching to
them.
23.3 Neither the Rebosis group nor the Ascension group have entered into any other material inter-company or other
transactions.
23.4 As at the last practical date, neither the Rebosis group nor the Ascension group have undertaken any off-balance
sheet financing.
24. MATERIAL CONTRACTS
24.1 Material contracts, which have been entered into by Rebosis during the two years preceding the last practical
date, other than in the ordinary course of business, are:
24.1.1 the “Material contracts” referred to in Annexure 10;
24.1.2 the Billion asset management agreement, the salient details of which are set out in Annexure 8;
24.1.3 the Billion property management agreement, the salient details of which are set out in Annexure 8; and
24.1.4 the loan agreements, the salient details of which are set out in Annexure 9.
24.2 Material contracts, which have been entered into by Ascension during the two years preceding the last practical
date, other than in the ordinary course of business, are:
24.2.1 the “Material contracts” referred to in Annexure 10;
24.2.2 the Ascension asset management agreement, the salient details of which are set out in Annexure 8;
24.2.3 the Billion property management agreement, Broll property management agreement and JHI property
management agreement, the salient details of which are set out in Annexure 8; and
24.2.4 the loan agreements, the salient details of which are set out in Annexure 9.
24.3 Save for those contracts listed above, Rebosis and Ascension have not entered into any other material contract,
being a contract entered into otherwise than in the ordinary course of business, within the two years prior to
the date of this circular or at any time containing an obligation or settlement that is material to Rebosis and/or
Ascension at the date of this circular.
28
25. MATERIAL CHANGES
Save for the proposed transactions:
25.1 there have been no material changes in the financial or trading position of the Rebosis group since Rebosis
published its results for the year ended 31 August 2014 and the date of this circular;
25.2 there have been no material changes in the financial or trading position of the Ascension group since Ascension
published its results for the six months ended 31 December 2014 and the date of this circular; and
25.3 there have been no changes in the business or trading objects of the Rebosis group during the past five years.
26. ADEQUACY OF CAPITAL
The directors have considered the effects of the Ascension acquisition and are of the opinion that the working capital
available to the Rebosis group is sufficient for the group’s present requirements, that is, for at least the next 12 months
from the date of issue of this circular.
27. EXCHANGE CONTROL REGULATIONS
27.1 The following is not a comprehensive statement of the South African Exchange Control Regulations but merely
a brief summary of the application of some of these regulations in respect of the distribution of the consideration
shares. Unitholders who are in any doubt as to the action they should take should consult their professional
advisors.
27.2 Should any cash consideration become payable to an emigrant from South Africa, such amount will be forwarded
to the authorised dealer in foreign exchange controlling the emigrants’ remaining South African assets for credit
to the emigrants’ blocked accounts. Distribution payments to non-residents are freely transferable from South
Africa.
27.3 A certificated holder who is an emigrant and whose documents of title have been restrictively endorsed under
the Exchange Control Regulations will, following the distribution, have their new documents of title similarly
endorsed “emigrant” and sent to the authorised dealer controlling the blocked assets of the emigrant.
27.4 A dematerialised holder, whose registration as a holder has been marked as being an “emigrant”, will have the
relevant consideration shares credited to their emigrant blocked share accounts at the CSDP controlling their
blocked portfolios.
27.5 A non-resident of South Africa who is reflected in the register as having an address outside the Common Monetary
Area and whose document/s of title are in dematerialised form and have been restrictively endorsed under the
Exchange Control Regulations, will have the new documents of title credited to the share account at the CSDP
controlling the portfolio.
27.6 A non-resident of South Africa who is reflected in the register as having an address outside the Common
Monetary Area and whose document/s of title are in certificated form and have been restrictively endorsed under
the Exchange Control Regulations, will have the new documents of title forwarded to the authorised dealer in
foreign exchange in South Africa nominated by the holder or, failing such nomination, the relevant consideration
shares will be issued by crediting them to an account in the name of the Ascension unitholder with Ascension’s
transfer secretaries, until such time as such Ascension unitholder has opened a CSDP or broker account, at which
point the relevant consideration shares will be credited to the account of the Ascension unitholder’s nominated
CSDP or broker, as the case may be.
27.7 Unitholders with registered addresses outside the Common Monetary Area should note that taxation implications
in respect of distributions might vary in terms of taxation legislation in their own jurisdictions. Unitholders who
may be in any doubt regarding their position are urged to consult an appropriate professional advisor.
28. LITIGATION STATEMENT
28.1 There are no legal or arbitration proceedings which may have, or have had during the 12 months preceding the
date of this circular, a material effect on the financial position of the Rebosis group. Rebosis is not aware of any
other proceedings that would have a material effect on the financial position of the Rebosis group or which are
pending or threatened against the Rebosis group.
28.2 There are no legal or arbitration proceedings which may have, or have had during the 12 months preceding the
date of this circular, a material effect on the financial position of the Ascension group. Ascension is not aware of
any other proceedings that would have a material effect on the financial position of the Ascension group or which
are pending or threatened against the Ascension group.
29
29. DIRECTORS’ RESPONSIBILITY STATEMENT
The directors, whose names are set out in page 11 of this circular, collectively and individually, accept full responsibility
for the accuracy of the information given and certify that to the best of their knowledge and belief there are no facts the
omission of which would make any statement false or misleading and that they have made all reasonable enquiries to
ascertain such facts and that this circular contains all information required by law and the Listings Requirements.
30. CONSENTS
30.1 Each of the corporate advisor, sponsor, trustee for debenture holders, independent reporting accountants,
company secretary, independent property valuer, legal advisor and transfer secretaries have consented in writing
to act in the capacities stated and to their names appearing in this circular and have not withdrawn their consent
prior to the publication of this circular.
30.2 The independent reporting accountants and independent property valuer have consented to the inclusion of
their reports in the form and context in which they are included in the circular, which consents have not been
withdrawn prior to the publication of this circular.
31. PRELIMINARY EXPENSES AND ISSUE EXPENSES
The preliminary and issue expenses (excluding VAT) relating to the Ascension acquisition which have been incurred by
Rebosis and Ascension or that are expected to be incurred are presented in the table below.
Payable to
Rebosis fees
Corporate advisor, legal advisor and sponsor fees
Legal advisor fees
Competition commission filing and legal fees
Reporting accountants fees
Property valuation fees
Printing and other costs
JSE documentation fees: circular
JSE documentation fees: capital conversion circular
JSE documentation fees: MOI amendment
JSE listing fees
Exchange Control fees
Sundry
Java Capital
Cliffe Dekker
Cliffe Dekker
SizweNtsalubaGobodo
Quadrant
Ince
JSE
JSE
JSE
JSE
Nedbank
Subtotal
Ascension fees
Legal advisor fees
Independent expert fees
TRP documentation fee
Printing and other costs
JSE documentation fees
Exchange Control fees
Rand
7 500 000
1 000 000
572 000
455 000
35 000
500 000
24 035
22 034
6 781
368 958
2 243
343 965
10 830 016
Cliffe Dekker
Mazars
TRP
WB Corporate Communications
JSE
Standard Bank
Subtotal
Total
500 000
455 000
200 000
500 000
12 984
2 000
1 669 984
12 500 000
32. DOCUMENTS AVAILABLE FOR INSPECTION
The following documents, or copies thereof, will be available for inspection at the company’s registered office and at the
corporate advisor’s office at any time during business hours on weekdays (official public holidays excluded) for a period
of 14 days from the date of this circular:
32.1 the category 1 circular;
32.2 the capital conversion circular;
32.3 the memoranda of incorporation of Rebosis, Ascension and their subsidiaries;
30
32.4 the debenture trust deed;
32.5 the asset management agreements referred to in Annexure 8;
32.6 the property management agreements referred to in Annexure 8;
32.7 the loan agreements in respect of the loans referred to in Annexure 9;
32.8 the material contracts referred to in Annexure 10;
32.9 the summary valuation report by the independent property valuer on the Ascension property portfolio as set out
in Annexure 7 and the detailed valuation reports;
32.10 the signed reports by the independent reporting accountants, the texts of which are set out in Annexure 2,
Annexure 4, Annexure 5;
32.11 the audited annual financial statements of Rebosis for the years ended 31 August 2014, 31 August 2013 and
31 August 2012;
32.12 the audited annual financial statements of Ascension for the years ended 30 June 2014 and 30 June 2013 and the
6 months ended 30 June 2012;
32.13 the reviewed interim financial statements of Ascension for the six months ended 31 December 2014; and
32.14 the written consents detailed in paragraph 30.
Signed in Johannesburg by Kameel Keshav on his behalf and on behalf of all the directors of the company on Thursday, 9 April
2015 in terms of powers of attorney granted by them.
_________________________________
Kameel Keshav
Chief Financial Officer
22 April 2015
_________________________________
For: Anna Mokgokong, director, herein represented by Kameel Keshav under and in terms of a power of attorney executed on
Thursday, 9 April 2015.
_________________________________
For: Sisa Ngebulana, director, herein represented by Kameel Keshav under and in terms of a power of attorney executed on
Thursday, 9 April 2015.
_________________________________
For: Ken Reynolds, director, herein represented by Kameel Keshav under and in terms of a power of attorney executed on
Wednesday, 8 April 2015.
_________________________________
For: Andile Mazwai, director, herein represented by Kameel Keshav under and in terms of a power of attorney executed on
Thursday, 9 April 2015.
_________________________________
For: Jaco Odendaal, director, herein represented by Kameel Keshav under and in terms of a power of attorney executed on
Thursday, 2 April 2015.
_________________________________
For: Thabo Seopa, director, herein represented by Kameel Keshav under and in terms of a power of attorney executed on
Thursday, 9 April 2015.
_________________________________
For: Nomfundo Qangule, director, herein represented by Kameel Keshav under and in terms of a power of attorney executed
on Thursday, 9 April 2015.
31
Annexure 1
FORECAST STATEMENTS OF COMPREHENSIVE INCOME
Set out below are the forecast statements of comprehensive income for Ascension (“forecasts”) for the one month ending
30 June 2015 and the year ending 30 June 2016 (“forecast periods”).
The forecasts include forecast figures for the forecast periods.
The forecasts, including the assumptions on which they are based and the financial information from which they are prepared,
are the responsibility of the directors. The forecasts must be read in conjunction with the independent reporting accountants’
limited assurance report which is presented in Annexure 2.
The forecasts have been prepared in compliance with IFRS and in accordance with Rebosis’ accounting policies.
Forecast
for the
one month
ending
30 June 2015
R’000
Forecast
for the
year ending
30 June 2016
R’000
Revenue
Contractual rental income
Straight-line lease income accrual
Property operating expenses (net of recoveries)
46 529
43 920
2 609
(13 984)
587 788
565 809
21 979
(185 360)
Net property and related income
Asset management fees
Operating expenses
32 545
(1 482)
(382)
402 428
(17 862)
(4 900)
Operating profit
Finance income
Finance cost
30 681
143
(9 576)
379 666
2 545
(120 499)
Net profit before debenture interest
Debenture interest
Interest on A-debentures
Interest on B-debentures
21 248
(18 639)
(10 783)
(7 856)
261 712
(239 733)
(135 867)
(103 866)
Net profit before tax
Income tax expense
2 609
–
21 979
–
Total comprehensive income for the year
2 609
21 979
2 609
21 979
18 639
239 733
Headline earnings attributable to linked unitholders
Adjusted for:
Straight-line lease income adjustment (net of tax)
21 248
261 712
(2 609)
(21 979)
Distributable earnings attributable to linked unitholders
18 639
239 733
308 860 859
376 359 014
308 860 859
376 359 014
3.49
2.09
3.87
2.47
308 860 859
376 359 014
308 860 859
376 359 014
43.99
27.60
47.20
30.81
Reconciliation between earnings, headline earnings and distributable earnings:
Profit for the period attributable to shareholders
Adjusted for:
Debenture interest
Number of Ascension A-linked units in issue
Number of Ascension B-linked units in issue
Weighted average number of Ascension A-linked units in issue
Weighted average number of Ascension B-linked units in issue
Distribution per Ascension A-linked unit (cents)
Distribution per Ascension B-linked unit (cents)
Earnings and headline earnings per Ascension A-linked unit
Earnings and headline earnings per Ascension B-linked unit
32
Notes and assumptions:
1. The forecasts incorporate the following material assumptions in respect of revenue and expenses that can be influenced by the directors:
1.1 Rebosis’ management’s forecasts for the period ending 30 June 2015 and the year ending 30 June 2016 are based on information derived from the
property manager and historical information;
1.2 Rebosis will not acquire or dispose of any properties during the forecast periods;
1.3 contracted revenue is based on existing lease agreements, whilst uncontracted revenue amounts to 29.9% for the period ending 30 June 2015 and
45.4% for the year ending 30 June 2016;
1.4 all existing lease agreements are valid;
1.5 turnover rental (rental income based on the actual turnover of the tenant) has not been forecast;
1.6 current vacant space has been forecast on a property-by-property basis and has been assumed to remain vacant for the duration of the forecast
periods;
1.7 leases expiring during the forecast periods have been forecast on a lease-by-lease basis, and have been assumed to renew unless the lessee has
indicated its intention to terminate the lease. The assumed renewed lease income from expired lease contracts has been classified as uncontracted;
1.8 property operating expenditure has been determined based on their review of historical expenditure and discussion with the property manager; and
1.9 no fair value adjustments to investment properties, other than the adjustment as a result of amortise lease escalations, have been provided for.
2. The forecasts incorporate the following material assumptions in respect of revenue and expenses that cannot be influenced by the directors:
2.1 there will be no unforeseen economic factors that will affect the lessees’ abilities to meet their commitments in terms of existing lease agreements;
and
2.2 consumption-based recoveries are consistent with the independent property valuers’ property income statements; and
2.3 an effective date of implementation of the offers of 1 June 2015.
3. Electricity is the only item of expenditure which is forecast to increase by greater than 15% from historical costs.
4. Material items of expenditure incurred are in respect of rates expense and electricity expense.
5. The property known as Grand Central is the only material property, being a property constituting 15% or more of the value or revenue of the property
portfolio.
33
Annexure 2
INDEPENDENT REPORTING ACCOUNTANT’S LIMITED ASSURANCE REPORT ON THE
FORECAST STATEMENTS OF COMPREHENSIVE INCOME OF ASCENSION PROPERTIES
LIMITED
“The Directors
Rebosis Property Fund Limited
3rd Floor, Palazzo Towers West
Montecasino Boulevard
Fourways
2191
9 April 2015
Dear Sirs
INDEPENDENT REPORTING ACCOUNTANT’S LIMITED ASSURANCE REPORT ON THE FORECAST
STATEMENTS OF COMPREHENSIVE INCOME OF ASCENSION PROPERTIES LIMITED (“ASCENSION” OR
“THE COMPANY”)
We have examined the forecast statements of comprehensive income of Ascension as set out in Annexure 1 of the circular to
be issued to Rebosis Property Fund Limited (“Rebosis” or “the issuer”) linked unitholders on or about 22 April 2015 (“the
Circular”), the forecast vacancy profile by sector and by gross lettable area, and the forecast lease expiry profile based on
existing lease agreements (collectively, the “forecast information”).
Directors’ responsibility
The directors are responsible for the forecast information, including the assumptions and notes on which it is based, and for
the financial information from which it has been prepared. This responsibility, arising from compliance with the Listings
Requirements of the JSE Limited, includes:
• determining whether the assumptions, barring unforeseen circumstances, provide a reasonable basis for the preparation
of the forecast information;
• whether the forecast information has been properly compiled on the basis stated, that being the recognition and
measurement criteria of International Financial Reporting Standards (“IFRS”); and
• whether the forecast information is presented on a basis consistent with the accounting policies of the company.
Reporting accountant’s responsibility
Our responsibility is to provide a limited assurance report on the forecast information prepared for the purpose of complying
with the Listings Requirements of the JSE Limited and for inclusion in the Circular. We conducted our limited assurance
engagement in accordance with the International Standard on Assurance Engagements applicable to The Examination of
Prospective Financial Information and the SAICA Circular entitled the Reporting Accountants’ Responsibilities in Terms of Section
13 of the Listings Requirements of the JSE Limited. This standard requires us to obtain sufficient appropriate evidence as to
whether or not:
• management’s best-estimate assumptions on which the forecast information is based are not unreasonable and are
consistent with the purpose of the information;
• the forecast information is prepared on the basis of the assumptions;
• the forecast information is appropriately presented and all material assumptions are adequately disclosed; and
• the forecast information, is prepared and presented on a basis consistent with the accounting policies of the company for
the period concerned and on the basis stated, that being the recognition and measurement criteria of IFRS.
In a limited assurance engagement, the evidence-gathering procedures are more limited than for a reasonable assurance
engagement and, therefore, less assurance is obtained than in a reasonable assurance engagement. We believe our evidence
obtained is sufficient and appropriate to provide a basis for our limited assurance conclusion.
34
Information and sources of information
In arriving at our conclusion, we have relied upon forecast financial information prepared by management of Ascension and
other information from various public, financial and industry sources.
The principal sources of information used in arriving at our conclusion are as follows:
• Management-prepared forecasts for the one month ending 30 June 2015 and the financial year ending 30 June 2016.
• Discussions with the management of Ascension regarding the forecasts presented.
• Discussions with management of Ascension regarding the prevailing market and economic conditions.
• Discussions with the property valuers and the property managers with regard to the forecast expenses.
• Lease agreements for a sample of the leases for the properties included in the Ascension portfolio as set out below.
• Valuation reports in respect of the properties included in the Ascension portfolio prepared by the external property
valuers.
• Indicative debt terms from bankers.
Procedures
In arriving at our conclusion we have performed the following procedures:
Rental income:
• Selections were made from the forecast contracted rental income streams per the profit forecast. The sample selected
resulted in 76% and 73% of contracted rental income being tested for the month ending 30 June 2015 and the year
ending 30 June 2016, respectively.
• For that same sample of properties, forecast recoveries were compared to historical recoveries and the forecast operating
expenditure for reasonableness. The terms of the leases were considered so as to ensure that the basis of the recoveries
was correct.
• Existing lease agreements that will expire during the period under review were discussed individually with the property
managers. Unless the existing tenant has indicated that it intends to vacate the premises, it has been assumed that the
existing tenant will renew the lease agreement and the resultant uncontracted rental income has been included in the
forecast. Uncontracted rental income comprised 30% for the month ending 30 June 2015 and 45% for the year ending
30 June 2016.
• Space that is currently vacant has been excluded from the forecast except where the property manager has demonstrated
that the vacant space is in the process of being let but that the lease agreement in that regard had not been signed on the
date of posting the Circular.
• The vacancy levels of the properties included in the Ascension portfolio assumed in the forecast were compared to the
historical vacancy levels of those buildings for reasonableness. Existing vacancies of 8% of total gross lettable area have
been assumed for the month ending 30 June 2015 and 30 June 2016 unless the preceding paragraph applies.
Rental income (development properties)
• The business plan in connection with the property development was reviewed and discussed with the property developer
and management. It was ensured that for development properties where no rental income was expected to be earned
during the forecast period, as the relevant property is expected to still be under development, that no rental income is
included in the forecast.
• Where rental income is included in the forecast for development properties, it was discussed with management that this
relates to lease agreements already concluded with tenants and is therefore included in the sample forecast contracted
rental income tested.
Expenses
For a sample of properties, forecast property expenses were compared to the historical expenses. Explanations were obtained
for any significant differences.
The detailed forecast expenditure was reviewed to ensure that all material expenditure items, as required by paragraph 13.14(f )
of the Listings Requirements of the JSE Limited, were disclosed.
35
Portfolio expenses
The forecast interest expense, property management fees and other portfolio expenses were assessed for reasonableness and,
where applicable, recalculated.
Application of accounting policies
We ascertained that the existing accounting policies of Ascension have been consistently applied in the preparation of the
forecast information.
Model review
In order to ensure that the forecast model for the property income and expenses was accurate and reliable, we performed a high
level review to determine the consistency and mathematical accuracy of the model.
Vacancy profile and lease expiry profile
We reviewed each property worksheet prepared by management to ascertain that the vacancy profile and the lease expiry profile
included in the model was derived from the correct source. We compared the vacancy profile and lease expiry profile included
in paragraphs 9.2.4 and 9.2.5 of the Circular to the vacancy profile and lease expiry profile in the model and found them to be
in agreement.
Accuracy of the information
We have relied upon and assumed the accuracy and completeness of the information provided to us in writing, or obtained
through discussions with the management of Ascension. While our work has involved an analysis of historical financial
information and consideration of other information provided to us, our assurance engagement does not constitute an audit or
review of historical financial information conducted in accordance with International Standards on Auditing or International
Standards on Review Engagements.
Accordingly, we do not express an audit or review opinion thereon and assume no responsibility and make no representations
in respect of the accuracy or completeness of any information provided to us, in respect of the forecast information and relevant
information included in the Circular.
Conclusion
Based on our examination of the evidence obtained, nothing has come to our attention that causes us to believe that:
(i) the assumptions, barring unforeseen circumstances, do not provide a reasonable basis for the preparation of the forecast
information;
(ii) the forecast information has not been properly compiled on the basis stated, that being the recognition and measurement
criteria of IFRS;
(iii) the forecast information has not been properly presented and all material assumptions are not adequately disclosed; and
(iv) the forecast information is not presented on a basis consistent with the accounting policies of Ascension.
Actual results are likely to be different from the forecast, since anticipated events frequently do not occur as expected and the
variation may be material; accordingly no assurance is expressed regarding the achievability of the forecast.
Our report and the conclusion contained herein is provided solely for the benefit of the board of directors of Rebosis and
linked unitholders of the issuer for the purpose of their consideration of the transaction. This letter is not addressed to and may
not be relied upon by any other third party for any purpose whatsoever.
Yours faithfully
Anoosh Rooplal
Director
SizweNtsalubaGobodo Inc
(Registration number M2005/034639/21)
Registered Auditors
Chartered Accountants (SA)
20 Morris Street East
Woodmead
2191”
36
Annexure 3
PRO FORMA STATEMENT OF FINANCIAL POSITION
Set out below is the pro forma statement of financial position of Rebosis reflecting the effects of the acquisition of Ascension
linked units that Rebosis does not already own. The pro forma statement of financial position is the responsibility of the
directors of Rebosis and has been provided for illustrative purposes only to provide information about how the Ascension
acquisition may have affected the financial position of Rebosis, assuming no capital conversion and that the Ascension
acquisition was implemented on 31 August 2014, and because of their nature, may not fairly represent the financial position
of Rebosis linked unitholders after the Ascension acquisition.
The independent reporting accountants’ limited assurance report on the pro forma statement of financial position is set out in
Annexure 4 of this circular. The independent reporting accountants’ review report on the value and existence of the assets and
liabilities acquired by the company is set out in Annexure 5 of this circular.
37
38
1 832 554
1 053 732
778 822
5 115 544
2 806 219
2 301 017
8 308
904 263
642 824
64 503
196 936
7 852 361
EQUITY AND LIABILITIES
Equity
Stated capital
Reserves
Non-current liabilities
Debentures
Interest bearing borrowings
Derivative instruments
Current liabilities
Short term portion of interest bearing borrowings
Trade and other payables
Unitholders for distribution
Total equity and liabilities
386 531 577
–
12.00
11.37
7 852 361
Total assets
Number of Rebosis linked units in issue
Number of Rebosis ‘A’ shares in issue
Net asset value per Rebosis linked unit (R)
Net tangible asset value per Rebosis linked unit (R)
Net asset value and net tangible asset value per Rebosis ‘A’ share (R)
7 714 435
6 856 000
597 592
95 703
149 983
14 617
540
137 926
89 076
48 850
ASSETS
Non-current assets
Investment property
Listed property securities
Goodwill
Intangibles
Derivative instruments
Property, plant and equipment
Current assets
Trade and other receivables
Cash and cash equivalents
Before¹
(31 August 2014)
R’000
(12 969 731)
(636 018)
–
599 181
448 654
43 245
107 282
3 878 140
(43 049)
(40 234)
(2 815)
(592 969)
(94 160)
(498 809)
(636 018)
(38 426)
(29 060)
(9 366)
(597 592)
(597 592)
Reversal
of prior
Ascension
investments³
R’000
863 500
322 603
540 897
2 415 459
1 404 179
1 011 280
3 878 140
8 766
16
86 862
34 977
51 885
3 791 278
3 782 496
Acquisition
of 100%
of Ascension²
R’000
429 960 646
54 324 803
12.46
10.54
27.23
56 398 800
54 324 803
11 671 060
(d)
4 122 452
3 305 127
817 325
6 032 664
2 712 059
3 312 297
8 308
1 515 944
1 091 478
120 248
304 218
11 671 060
11 486 662
10 638 496
–
674 244
149 983
23 383
556
184 398
94 993
89 405
Pro forma
after⁵
R’000
576 577
12 500
12 500
1 469 447
1 969 026
(499 579)
(905 370)
(1 404 179)
498 809
576 577
(1 964)
(1 964)
578 541
578 541
Pro forma
adjustments⁴
R’000
Notes and assumptions:
1. Extracted, without adjustment, from Rebosis’ summarised audited results for the year ended 31 August 2014.
2. Extracted, without adjustment, from the condensed unaudited consolidated interim results of Ascension for the six months ended 31 December 2014.
3. Represents the reversal of the acquisition by Rebosis of 109 363 661 Ascension B linked units in February 2014, the reversal of the acquisition by Rebosis
of 28 001 628 Ascension A linked units and 82 575 340 Ascension B linked units in June 2014 and the reversal of the subsequent remeasurement of the
existing Ascension investment as 100% of Ascension has been recognised in note 2 above. 12 969 731 Rebosis linked units were previously issued at an
issue price of R10.78 for the 109 363 661 Ascension B linked units acquired by Rebosis in February 2014. Rebosis’ holding of Ascension linked units at
31 August 2014 did not constitute Ascension as an associate as defined in IAS 28.
4. Represents the following adjustments:
(a)
The acquisition by Rebosis (by way of a scheme of arrangement in terms of section 114 of the Companies Act) of all Ascension A linked units not
already held by Rebosis for a purchase consideration settled by the issue of new Rebosis A shares, applying a swap ratio of 5.17 Ascension A linked
units for every 1 Rebosis A share, resulting in the issue of 54 324 803 Rebosis A shares in exchange for the 280 859 231 Ascension A linked units
outstanding.
(b)
The acquisition by Rebosis (by way of a scheme of arrangement in terms of section 114 of the Companies Act) of all Ascension B linked units not
already held by Rebosis for a purchase consideration settled by the issue of Rebosis ordinary shares, applying a swap ratio of 4.25 Ascension B linked
units for every 1 Rebosis ordinary share, resulting in the issue of 43 429 069 Rebosis ordinary shares in exchange for the 184 420 013 Ascension
B linked units outstanding.
(c)
In accordance with IFRS 3, the consolidation of Ascension with the resultant recognition of goodwill of R547.5 million for the difference in the
aggregate consideration paid by Rebosis and the Ascension net asset value as at 30 June 2014. The aggregate consideration paid is calculated as the
43 429 069 new Rebosis ordinary shares to be issued (assuming the acquisition of all Ascension B linked units not already owned by Rebosis)
multiplied by a Rebosis ordinary share price of R12.60 plus the 54 324 803 new Rebosis A shares to be issued (assuming the acquisition of all
Ascension A linked units not already owned by Rebosis) multiplied by a Rebosis A share price of R29.47 plus the previous acquisitions of Ascension
linked units for an acquisition cost of R638.6 million (see note 3) plus the remeasurement of Rebosis’ previously held equity interest in Ascension
to its acquisition-date fair value in terms of IFRS 3 which results in the recognition of a gain of R37.3 million. No additional identifiable assets and
liabilities have been recognised under IFRS 3 and a full purchase price allocation exercise will be done post the transaction when the necessary
information becomes available.
(d)
The 56 398 800 number of Rebosis linked units/ordinary shares in issue represents the sum of 12 969 731 Rebosis linked units issued pursuant to
the acquisition by Rebosis of 109 363 661 Ascension B linked units in February 2014 (see note 3) plus 43 429 069 Rebosis ordinary shares to be
issued for the acquisition of all Ascension B linked units not already held by Rebosis (by way of a scheme of arrangement in terms of section 114
of the Companies Act) (see note 4(b)).
(e)
Transaction costs are assumed to be approximately R12.5 million of which R11.0 million is assumed to be expensed and the balance of R1.5 million
is assumed to be capitalised in full.
5. Represents the “After” column incorporating the adjustments set out above.
39
Annexure 4
INDEPENDENT REPORTING ACCOUNTANT’S LIMITED ASSURANCE REPORT ON THE
CONSOLIDATED PRO FORMA STATEMENT OF FINANCIAL POSITION OF REBOSIS
PROPERTY FUND LIMITED
“The Directors
Rebosis Property Fund Limited
3rd Floor, Palazzo Towers West
Montecasino Boulevard
Fourways
2191
9 April 2015
Dear Sirs
INDEPENDENT REPORTING ACCOUNTANT’S LIMITED ASSURANCE REPORT ON THE COMPILATION OF
PRO FORMA FINANCIAL INFORMATION OF REBOSIS PROPERTY FUND LIMITED (“REBOSIS” OR “THE
GROUP”)
We have completed our assurance engagement to report on the compilation of pro forma financial information of Rebosis by
the directors. The pro forma financial information consists of the condensed consolidated pro forma statement of financial
position of Rebosis and related notes, as presented in Annexure 3 of the circular.
The condensed consolidated pro forma statement of financial position has been compiled by the directors on the basis of the
applicable criteria specified in the JSE Limited (“JSE”) Listings Requirements and the SAICA Guide (“Applicable Criteria”).
The pro forma financial information has been compiled by the directors to illustrate the impact of the corporate action or event,
described in the Circular, Sections 1-4, on the group’s financial position as at 31 August 2014 as if the corporate action or
event had taken place at 31 August 2014. As part of this process, information about the group’s financial position has been
extracted by the directors from the company’s financial statements for the period ended 31 August 2014, on which an auditor’s
report was issued on 5 November 2014.
Directors’ Responsibility for the Pro Forma Financial Information
The directors are responsible for compiling the pro forma financial information on the basis of the Applicable Criteria and in
conformity with the applicable accounting framework, that being the recognition and measurement criteria of International
Financial Reporting Standards (“IFRS”), and as described in the notes to the consolidated pro forma statement of financial
position.
Reporting Accountant’s Responsibility
Our responsibility is to express an opinion about whether the pro forma financial information has been compiled, in all
material respects, by the directors, on the basis of the Applicable Criteria based on our procedures performed. We conducted
our engagement in accordance with the International Standard on Assurance Engagements (“ISAE”) 3420: Assurance
Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus. This standard requires
that we comply with ethical requirements and plan and perform our procedures to obtain reasonable assurance about whether
the pro forma financial information has been compiled, in all material respects, on the basis of the Applicable Criteria and in
conformity with the applicable accounting framework, that being the recognition and measurement criteria of IFRS.
For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical
financial information used in compiling the pro forma financial information, nor have we, in the course of this engagement,
performed an audit or review of the financial information used in compiling the pro forma financial information.
As the purpose of pro forma financial information included in a circular is solely to illustrate the impact of a significant
corporate action or event on unadjusted financial information of the entity as if the corporate action or event had occurred or
had been undertaken at an earlier date selected for purposes of the illustration, we do not provide any assurance that the actual
outcome of the event or transaction would have been as presented.
40
A limited assurance engagement to report on whether the pro forma financial information has been compiled, in all material
respects, on the basis of the Applicable Criteria involves performing procedures to assess whether the Applicable Criteria used
in the compilation of the pro forma financial information provides a reasonable basis for presenting the significant effects
directly attributable to the corporate action or event, and to obtain sufficient appropriate evidence about whether:
• the related pro forma adjustments give appropriate effect to those criteria; and
• the pro forma financial information reflects the proper application of those adjustments to the unadjusted financial
information.
Our procedures selected depend on our judgment, having regard to our understanding of the nature of the company, the
corporate action or event in respect of which the pro forma financial information has been compiled, and other relevant
engagement circumstances.
Our engagement also involves evaluating the overall presentation of the pro forma financial information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Opinion
In our opinion, the pro forma financial information has been compiled, in all material respects, on the basis of the Applicable
Criteria and in conformity with the applicable accounting framework, that being the recognition and measurement criteria of
IFRS and as described in the notes to the consolidated pro forma statement of financial position.
Yours faithfully
Anoosh Rooplal
Director
SizweNtsalubaGobodo Inc
(Registration number M2005/034639/21)
Registered Auditors
Chartered Accountants (SA)
20 Morris Street East
Woodmead
2191”
41
Annexure 5
INDEPENDENT REPORTING ACCOUNTANTS’ REVIEW CONCLUSION ON THE
VALUATION AND EXISTENCE OF THE ASSETS AND LIABILITIES ACQUIRED
“The Directors
Rebosis Property Fund Limited
3rd Floor, Palazzo Towers West
Montecasino Boulevard
Fourways
2191
9 April 2015
Dear Sirs
REVIEW CONCLUSION ON THE VALUATION AND EXISTENCE OF THE ASSETS AND LIABILITIES
ACQUIRED BY REBOSIS PROPERTY FUND LIMITED (“REBOSIS”)
Introduction
We have reviewed the assets and liabilities acquired by Rebosis reflected in the acquisition adjustment columns of the pro forma
statement of financial position included in Annexure 3 of the circular to be issued on or about 22 April 2015 (“the circular”)
relating to the assets and liabilities to be acquired by Rebosis prior to the transaction. The directors are responsible for the
compilation, contents and preparation of the adjustment columns of the pro forma statement of financial position. Our
responsibility is to express a review conclusion on the value and existence of the assets and liabilities acquired reflected in the
adjustment columns in accordance with the accounting policies adopted by Rebosis and the recognition and measurement
criteria of International Financial Reporting Standards (“IFRS”).
Directors’ responsibility for the pro forma statement of financial position
The directors are responsible for the compilation, contents and preparation of the adjustment columns of the pro forma
statement of financial position.
Independent reviewer’s responsibility
Our responsibility is to express a conclusion regarding the value and existence of the assets and liabilities acquired by Rebosis
in accordance with the requirements of section 13.16(e) of the JSE Listings Requirements based on our review. We conducted
our review in accordance with the International Standard on Review Engagements (ISRE) 2400 (Engagements to Review
Financial Statements) which is applicable to an engagement of this nature. ISRE 2400 requires us to conclude whether
anything has come to our attention that causes us to believe that the financial information in respect of which we are required
to issue a review conclusion, being the assets and liabilities acquired by Rebosis reflected in the acquisition adjustment columns
of the pro forma statement of financial position included in Annexure 3 of the circular, are not fairly valued, do not exist or are
not fairly presented in all material respects in accordance with the accounting policies adopted by Rebosis and the recognition
and measurement criteria of International Financial Reporting Standards. This Standard also requires us to comply with
relevant ethical requirements.
A review of financial information in accordance with ISRE 2400 consists primarily of making inquiries of management and
others within the entity involved in financial and accounting matters, applying analytical procedures, and evaluating the
sufficiency and appropriateness of evidence obtained. A review also requires performance of additional procedures when the
practitioner becomes aware of matters that cause the practitioner to believe the financial information in respect of which we
are required to issue a review conclusion may be materially misstated. We believe that the evidence we obtained in our review
is sufficient and appropriate to provide a basis for our conclusion.
The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with
International Standards on Auditing. Accordingly, we do not express an audit opinion on this financial information.
42
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the assets and liabilities acquired by
Rebosis reflected in the acquisition adjustment columns of the pro forma statement of financial position included in
Annexure 3 to the circular are not fairly valued, do not exist or are not fairly presented, in all material respects, in accordance
with the accounting policies adopted by Rebosis, and the recognition and measurement criteria of International Financial
Reporting Standards and the requirements of the Companies Act of South Africa.
Yours faithfully
Anoosh Rooplal
Director
SizweNtsalubaGobodo Inc
(Registration number M2005/034639/21)
Registered Auditors
Chartered Accountants (SA)
20 Morris Street East
Woodmead
2191”
43
44
Bathopele
Building
Spectrum
Schreiner
Chambers
Mishumo
House
Sigma
45 Castle
Street
Bergstan
House
1.
2.
3.
4.
5.
6.
7.
Property
name
Office
Office
Office
Cnr Castle and
Loop Streets, Cape
Town
45 Castle Street,
Cape Town
7 Blanckenberg Road,
Bellville,
Cape Town
Office
Office
Office
De Korte and De Beer Office
Streets, Braamfontein
94 Pritchard Street,
Johannesburg
Cnr Voortrekker and
Blanckenberg Streets,
Bellville
Corner Loveday and
Market Streets,
Johannesburg
Physical
address
Property
description
and use
Erf 169833,
Cape Town
Erf 7423,
Cape Town
Erf 11135 Erf
11136, Bellville,
Cape Town
Erf 2975, 2976,
2978, & Portion 1
of 2977, RE of Erf
2977, Johannesburg
Gauteng
Erf 5243
Johannesburg
Gauteng
Erf 11123 Bellville
Cape Town
Erf 4412
Johannesburg
Registered
legal
description
and region
The table below sets out the details in respect of the Ascension property portfolio.
DETAILS OF THE ASCENSION PROPERTY PORTFOLIO
2 838
9 537
83.15
116.15
86.3
86.3
6 154
96.8
85.8
3 751
Effective
date of
acquisition
29 February
2012
5 December
2011
19 July 2010
3 December
2009
6 November
2009
8 October
2009
86.3 1 August 2007
18 815
7 550
11 500
Building
rentable
area
(GLA m2)
Weighted
average
rental
per m2
(R)
125 500 000
37 770 000
37 340 400
41 492 400
82 650 910
33 500 000
22 500 000
29 300 000
148 500 000
48 000 000
72 000 000
163 000 000
92 000 000
138 000 000
(96 200 000)
113 730 000
10 659 600
30 507 600
80 349 090
58 500 000
115 000 000
Difference
Valuation
between
as at
valuation
Purchase 31 December and purchase
price
2014
price1
(R)
(R)
(R)
Annexure 6
45
90 Market Street,
Johannesburg Central
Corner Vermeulen &
Paul Kruger Streets,
Nelspruit
12. 90 & 92
Market Street
13. VWL
65 Phillip Engelbrecht Office
Street, Meyersdal
16. Meyersdal
Office
Office
373 Pretorius Street,
Pretoria, Gauteng
15. 373 Pretorius
Street
17. Infinity Office 4 Robin Close
Park,
Meyersdal Nature
Meyersdal
Estate, Meyersdal
Office
14. 14 Long Street 14 Long Street,
Cape Town
Office/ Retail
Office
Cnr Brown and
Office
Paul Kruger Streets,
Nelspruit Mpumalanga
Office
Office
11. PROROM
Cnr Strand and
Loop Streets,
Cape Town
Office
76 Juta Street,
Braamfontein
Nedbank
Centre
9.
Cnr Strand and
Bree Streets,
Cape Town
Physical
address
10. NBC
Matrix House
8.
Property
name
Property
description
and use
Erf 84, Meyersdal
Nature Estate Ext 6
and Erf 2054,
Meyersdale Nature
Estate Ext 17
Erf 2259,
Meyersdal Ext 12
Erf 3255,
Cape Town
Erf 4483,
Cape Town
Portion 1 of
Erf 2961, Pretoria
Township
Erven 193 and 194,
Johannesburg
Erf 1433,
Nelspruit Township
Erf 4644,
Johannesburg
Erf 9451,
Cape Town
Erf 1239,
Cape Town
Registered
legal
description
and region
12 012
4 840
13 340
10 245
17 989
2 000
7 038
10 000
6 332
9 001
Building
rentable
area
(GLA m2)
118.21
86.1
86.3
94.97
86.3
0
DP#
86.3
DP#
DP#
Weighted
average
rental
per m2
(R)
18 December
2012
14 December
2012
30 November
2012
31 July 2012
31 August
2012
5 October
2012
13 August
2012
19 December
2012
29 February
2012
29 February
2012
Effective
date of
acquisition
203 165 385
51 880 232
155 000 000
67 000 000
103 000 000
3 990 000
38 000 000
106 000 000
125 500 000
125 500 000
217 000 000
44 000 000
203 000 000
126 000 000
167 000 000
7 000 000
69 000 000
133 500 000
40 000 000
76 000 000
13 834 615
(7 880 232)
48 000 000
59 000 000
64 000 000
3 010 000
31 000 000
27 500 000
(85 500 000)
(49 500 000)
Difference
Valuation
between
as at
valuation
Purchase 31 December and purchase
price
2014
price1
(R)
(R)
(R)
46
174 Visagie Street,
Pretoria
24 Cumberland Street, Industrial
Paarden Eiland, Cape
Town
Madiba Street,
Nelspruit
Shell House and
Ovenstone House,
2 Waterkant Street,
Cape Town
22. 174 Visagie
Street
23. Island Centre
24. Riverview 1
and 2 and
Riverpark 1
and 2
25. Atterbury
House
Office
Motor Retail
Park and
Office
Office
Unit 1 SS Shell
House and
Ovenstone House
747/2006
Portion 5 and 6 of
Erf 40, Riverside
Park Extension 6,
Mpumalanga;
Erf 17960,
Cape Town
Erf 2901, Pretoria,
Gauteng
Erf 2175,
Meyersdale Ext 19
(now SS Fish Eagle
Office Park Phase 2,
Units 1-12)
King Fisher Crescent,
Meyersdal
21. Kingfisher
Crescent,
Meyersdal
Office
Erf 330, Florida
Noord Ext 7
Office
37 Conrad Drive,
Florida Noord,
Roodepoort
20. Medscheme
Erf 342,
Randjespark Ext 100
Erven 4648, 4649
and 4650,
Cape Town
Industrial
Office and
retail
Corporate Landing
238 Roan Crescent,
Randjespark
Physical
address
Registered
legal
description
and region
19. Grand Central Cnr Darling and
Plein Streets,
Cape Town
18. 238 Roan
Crescent,
Midrand
Property
name
Property
description
and use
26 240
8 843
23 358
113.06
127.18
31.65
86.3
99.6
1 445
13 376
86.3
106.43
86.3
6 792
33 424
9 040
Building
rentable
area
(GLA m2)
Weighted
average
rental
per m2
(R)
12 September
2013
30 August
2013
16 July 2013
28 June 2013
14 December
2012
20 December
2012
9 December
2012
20 December
2012
Effective
date of
acquisition
341 000 000
62 000 000
55 000 000
82 800 000
16 833 476
133 988 353
492 393 203
90 935 705
324 000 000
147 000 000
72 000 000
164 000 000
22 600 000
91 000 000
549 000 000
111 500 000
(17 000 000)
85 000 000
17 000 000
81 200 000
5 766 524
(42 988 353)
56 606 797
20 564 295
Difference
Valuation
between
as at
valuation
Purchase 31 December and purchase
price
2014
price1
(R)
(R)
(R)
47
7 807
21 562
11 738
Building
rentable
area
(GLA m2)
80.68
23 April 2013
80.02 8 August 2013
109.89 7 March 2014
Effective
date of
acquisition
97 000 000
189 000 000
181 000 000
2 879 418 673 3 721 400 000
66 000 000
60 000 000
118 678 609
833 581 327
31 000 000
129 000 000
62 321 391
Difference
Valuation
between
as at
valuation
Purchase 31 December and purchase
price
2014
price1
(R)
(R)
(R)
4. As set out in the condensed unaudited consolidated interim results of Ascension for the 6 months ended 31 December 2014 announced on SENS on 2 March 2015, the property portfolio of Ascension comprised 29 properties
valued by the board of Ascension at R3.78 billion. The valuation of the Ascension property portfolio set out in the table above is as per the valuation performed by the independent property valuer. The table above reflects that
the Ascension property portfolio comprises 28 properties as the independent property valuer has combined the valuation of Riverview 1 and 2 and Riverpark 1 and 2.
3. The figures reflect 100% ownership of the properties set out in the table above. The properties in the table above are wholly-owned either directly or indirectly by Ascension.
2. The properties in the table above have been valued by the independent property valuer.
1. The difference between the valuation and the acquisition costs is due to changes in the market value of the properties. Further to this is that the value attributed by the independent property valuer is an open market value while
the acquisition costs are negotiated values.
Notes
DP# Development property
TOTAL
Erf 1121
Marshalltown
Office
86 Main Street,
Marshalltown,
Johannesburg
28. Swiss House
Erf 1263,
Marshalltown
Erven 676 and 4677,
Johannesburg
Office
Office
Corner of Rissik and
Fox Streets,
Johannesburg
Physical
address
Registered
legal
description
and region
27. Game Building Corner of Joubert and
Pritchard Streets,
Johannesburg
26. Surrey House
Property
name
Property
description
and use
Weighted
average
rental
per m2
(R)
Annexure 7
INDEPENDENT PROPERTY VALUER’S SUMMARY VALUATION REPORT OF THE
ASCENSION PROPERTY PORTFOLIO
“9 April 2015
The Directors
Rebosis Property Fund Ltd (“Rebosis”) and Ascension Properties Limited (“Ascension”)
Floor 3 Palazzo Office Towers,
Monte Casino Boulevard,
Magaliesig,
Sandton
Dear Sirs
RE: INDEPENDENT VALUERS’ SUMMARY REPORT OF ALL PROPERTIES BELONGING TO ASCENSION
WHICH ARE TO BE ACQUIRED BY REBOSIS FOLLOWING THE SUCCESSFUL IMPLEMENTATION OF THE
OFFER VIA A SCHEME OF ARRANGEMENT MADE BY REBOSIS TO ASCENSION UNITHOLDERS TO
ACQUIRE ALL OF THE ASCENSION A LINKED UNITS AND B LINKED UNITS IN ISSUE THAT ARE NOT
ALREADY HELD BY REBOSIS.
In accordance with your instruction of 10 December 2014, I confirm that I have visited and inspected the 28 properties listed
in the attached schedule (“the properties”) during December 2014 (Section 13.23 (a) (iii)) and have received all necessary
details required to perform a valuation in order to provide you with my opinion of the properties’ market values as at
31 December 2014 (Section 13.23 (c))
1.
INTRODUCTION
The valuation of the properties has been carried out by the valuer who has carefully considered all aspects of all the
properties. These properties each have a detailed valuation report which has been given to the management of Rebosis
and Ascension. The detailed reports include commentary on the current economy, nature of the properties, locality,
tenancy, risk profile, forward rent and earning capability and exposure to future expenses and property risk.
All these aspects have been considered in the individual valuation reports of the properties. The detailed reports have
further addressed the tenancy income capability and expenditure for each property and tenant. Historic expenditure
profile as well as future expenditure increases have been considered. The value therefore indicates the fair market value for
each property which is summarised on a schedule as attached hereto, for each property. There are 28 properties in total
comprising the portfolio. All essential aspects of information of all the properties have been summarised in the attached
schedule and will be available for inspection at the offices of Rebosis and Ascension.
2. BASIS OF VALUATION
The valuation is based on market value.
Market value is “The estimated amount for which an asset or liability should exchange on the valuation date between a
willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each
acted knowledgeably, prudently and without compulsion.” (IVS 7th edition).
Furthermore the principals of fair value measurement have been applied in the determination of value which is defined
as “The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date.” (IFRS 13)
Note that the values and calculation methodology have been sensitivity tested by way of quantitative analysis by analysing
the capitalisation rates, discount rates, rental growth potential, expenditure increase, risk consideration and other inputs
in various discounted cash flow models.
48
3. VALUE CALCULATION
The calculation of the current market value of these properties has been based on income capitalisation. This is the
fundamental basis on which most commercial income producing properties are traded on the South Africa market. This
is due to there being strong supporting evidence of market rental rates, appropriate expenses and therefore accurate net
revenue potential determination. Consequently capitalisation rates are frequently reported when details are given on
transactions. This rate may also be determined by simple analysis of sales in the market. (Section 13.23 (d)).
Properties traded in the current market reflect a yield rate relationship between revenue and capital value. This rate is
an accurate determinant of the capitalisation rate.
The discounted cash flow value has also been calculated for each property as a check and a balance with reference to fair
value reporting in order to ensure that the capitalised value calculated is tested against and is consistent with the market.
The considerations for the valuations are as follows:
3.1
Calculating the forward cash flow of all contractual and other income derived from the properties;
3.2
Calculating the forward contractual and other expenditure as well as provisions for various expenses in order to
provide for void or future capital expenditure to which the property may be exposed;
3.3
The current area vacant as a percentage of the portfolio is approximately 8.4%. In order to apply a conservative
approach, I have deducted approximately 2.21% of the gross income as a provision for rental that may not be
collected as a consequence of vacancy, tenant failure or tenant refitting during the course of the coming year. This
has currently penalised the property value. Management should be able to substantially improve on this aspect
in future, indicating good internal growth potential from the properties themselves if managed well. The current
vacancy is slightly more than the market average (approximately 8.2%) for this nature of property. The void
provision used in the valuation is adequate.
3.4
I have further deducted a capital amount of R 33 045 196.41 in respect of income lost due to time delays before
new tenants occupy premises. This is deducted from the capital value figure. (Section 13.23 (f) (i));
3.5
There is no loss of rental due to renovations or refurbishments currently being carried out on the buildings. There
is some external maintenance work on various buildings and some tenant installation fitting that is currently in
progress. There is no loss of rental as a result of these activities. (Section 13.23 (f) (ii));
3.6
Generally the rentals are market related. There are however 5 buildings which are higher than market related
rental these are: Sigma House, Riverpark and Riverview, Swiss House, Mishumo House and Surrey House.
Note however that the remaining period of Public Works leases on these building are 55 months, 11 months, 65
months, 53 months and 47 months respectively still to run. These are relatively long periods of secure cash flow.
Some rentals are lower than market. This has been determined by comparing similar buildings in comparable
areas to the properties valued, in terms of rental per square metre. The rental rate has also been checked against
various published indices including the South African Property Owners Association (SAPOA) index.
Where the properties have amortisation or rentalisations in addition to the rent, then only the rent has been
capitalised. Any additional recovery has been discounted over the period of lease still to run. Where leases include
parking lumped together with rent, then I have stripped out the parking value element in order to distil the actual
rental rate for comparability purposes.
3.7
Capitalising the net contractual income derived from the properties for a period of 1 year in advance, calculated
from 1 January 2015;
3.8
The valuation has considered published market statistics regarding rental rates and expenditure for the different
types of properties. It has also considered numerous other portfolios of similar properties in order to benchmark
and determine if any properties are over rented or have excessive expenditure; and
3.9
Various provisions for capital contingencies were deducted from the capitalised value of all the properties. This
amount totals R 125 450 104.81, or 3.37% of the total portfolio value.
4. SPARE LAND
There is one property with a tract of vacant zoned and serviced spare land.
Riverpark 1 & 2 and Riverview 1 & 2 Nelspruit has good frontage onto the main road, land for commercial
development. It has excellent development potential and has sufficient municipal services and zoning which allows for
future development.
49
Various projects are possible due to the potential of the land. Currently it is unknown as to when development may
commence. No planning permission has been applied for in respect of the spare land. (Section 13.26)
5.
BRIEF DESCRIPTION
NEDBANK CENTRE – This is a C grade, commercial office block. Footprint is a basic rectangle concrete structure.
There are thirteen levels of building being two levels of retail, and the balance being multi floor upper offices previously
occupied by Provincial Government. Building is used as offices and ground floor retail fronting onto street pavement.
To be refurbished.
MATRIX HOUSE – This is a B grade, commercial office block. Footprint is a basic rectangle concrete structure. There
are six levels of building being one level of retail, and the balance being reception and multi floor upper offices mainly
occupied by Provincial Government for archive storage.
BERGSTAN HOUSE – This is a C grade, commercial office block. Footprint is a basic square, rounded on the street
corner. There are five levels of building being one level of retail and one upper floor of parking with driveway ramp
(which also has a walk through access to Matrix House). Building is an inner city multi storey office block. Main tenant
is Bergstan Consulting Engineers who occupy 74.28% of the building. Ground floor is refurbished motor retail.
SPECTRUM HOUSE – This is a B grade, commercial office block. Footprint is a basic rectangle/ T-shape. There are six
levels of building being all office, reception and multi floor upper offices 85.25% occupied by Provincial Government.
Building is a multi-storey office block.
SIGMA HOUSE – This is a B grade, commercial office block. Footprint is a square shape positioned on one street
front. There are eight levels of building being first floor level of parking, ground floor retail and the balance being multi
floor upper offices all occupied 88.11% by Provincial Government.
45 ON CASTLE – This is a A grade newly redeveloped, commercial office block. Design is a basic rectangle. There are
ten levels of building being reception and multi floor upper offices occupied 85% by Provincial Government.
SCHREINER CHAMBERS – This is a B- grade, commercial office block. Shape is a basic H-Block. There are twenty
levels of building being two levels of basement parking, eighteen upper levels of offices. Building is an inner city multi
storey office block opposite the High Court. National Department Of Public Works occupy 28.72% of the building.
The building has a ground floor retail component and some basement parking.
MISHUMO HOUSE – This is a B grade, commercial office block. There are thirteen levels of building being two
levels of basement parking, and eleven upper floors of offices. Building is an inner city multi storey office block. The
National Department of Public Works occupies 69.35% of the building.
BATHOPELE BUILDING – This is a B grade, commercial office block. Layout is a basic L-Block. There are seven
levels of building being ground floor retail, first two levels are upper deck parking, four upper levels of offices. Building
is an inner city multi storey office block. Gauteng Provincial Government occupy 100% of the building.
VWL BUILDING – This is a B- grade, commercial office block. There are twenty three levels of building being two
levels of basement, ground floor offices/reception and multi floor upper offices. Building is an inner-city multi storey
office block. Gauteng Provincial Government occupy 100% of the building.
PROROM BUILDING – This is a B- grade, commercial office block. There are eight levels of building being basement
parking, ground floor retail facilities with six upper floor offices. The construction is generally large office block nature
with retail facade, fronting hard topped parking yardage and driveway. Department Of Water Affairs occupy 77.76%
of the building.
NBC BUILDING – This is a B- grade, commercial office block. There are eighteen levels of building, being two levels
of basement parking, one ground floor level (part reception area and retail) and fifteen upper floor offices. Building is
an inner city multi storey office block. NBC Holdings occupy 100% of the building on a triple net lease.
90 AND 92 MARKET STREET – This is a B- grade, commercial office block. There are five levels of building being
five upper floor levels of offices. Building is generally an older classical CBD structure of building. The building is
currently vacant.
RIVERPARK 1&2 AND RIVERVIEW 1&2 NELSPRUIT – This is an A grade, motor retail park and office block.
The property comprises of two buildings, the motor retail is a curved structure with motor frontage, the second is an
office development fronting onto the Nelspruit river.
50
14 LONG STREET – This is a B- grade, commercial office block. There are eleven levels of building being two
basement levels, above the main building’s ground floor retail and the balance being reception and multi floor upper
offices. Building stepped back after fifth level on north side. Department Of Land Affairs occupy 62.03% of the
building.
373 PRETORIUS STREET – This is a B- grade, commercial office block. There are nine levels of building being
2 levels of basement parking, ground floor offices and upper floor level of offices. City of Tshwane Metropolitan
Municipality occupy 100% of the building.
SWISS HOUSE – This is a C grade, commercial office block. There are twelve levels of building being 2 basement
parking, semi basement and nine upper floor office levels and a roof deck. Building is generally a good class Johannesburg
CBD office nature of development. Joburg Water occupy 88.41% of the building, the building has ground floor retail.
ISLAND CENTRE – This is a C grade, industrial unit with small offices to each unit. There are two levels of office and
warehouse building being, ground floor offices on same level as warehouse and first floor offices and ablution. Building
is constructed as warehousing, but used partly as industrial with numerous large roller shutter doors, fronting hard
topped yardage and driveway on both warehouse sides. The Government of the Republic of South Africa Department
occupy 36.19% of the warehouse for storage.
ATTERBURY HOUSE – This is a B- grade office block with ground floor retail. There are twenty six levels of building
being basement level and adjoining parkade being Ovenstone House comprising of four parking levels and twenty four
floors above the main building’s ground floor retail and the balance being reception, gym and multi floor upper offices.
GRAND CENTRAL – This is a B grade office block with ground floor retail. There are fourteen levels of building
being four levels adjoining parkade parking mixed with lower floor retail and flowing into ground and upper floors of
the larger office tower block, and two lower floors of retail and the balance being reception and multi floor upper offices
all occupied by Provincial Government and the Post office.
INFINITY OFFICE PARK, MEYERSDAL – This is a B- grade office park. There are seven basic rectangles building,
mainly H structures. There are three levels of building being basement parking with store rooms and service utility
rooms, ground floor and first floor offices with some storage and upper floor office levels. Buildings front hard topped
parking yardage and driveway.
MEYERSDAL OFFICE PARK – This is a B grade office park. There are four basic rectangle buildings, mainly H
structures. There are three levels of building being basement parking with store rooms and service utility rooms, ground
floor and first floor offices with some storage and upper floor office levels. Buildings front hard topped parking yardage
and driveway.
MEDSCHEME – This is a B grade office block. Building is an H-shape built around a central open atrium. There are
four levels of building being semi basement parking, utility, store and some office, ground floor offices and two upper
floor levels of offices.
174 VISAGIE STREET – This is a C grade office block. Footprint is three rectangular building H block footprint.
There are seven levels of building being 1 level of basement parking, ground floor offices and upper floor level of offices.
CORPORATE LANDING – This is a B – grade warehouse distribution and office property. Building is two basic E
shape rectangle designs. There are three levels of building being one level of parking, two upper office levels and some
store space and the balance being reception and multi floor upper offices all occupied by one large tenant.
KINGFISHER CRESCENT MEYERSDAL – This is a B grade office block. Property is one building of a basic
rectangle T-shape. There are three levels of building being basement parking, ground floor offices with some storage
and upper floor office levels.
GAME – This building is a C grade office block with retail on the ground floor. Footprint is a basic square shape. There
are eight levels of building being one level basement parking, ground floor, first floor and second floor retail and four
upper levels of offices.
SURREY HOUSE – This is a B grade office block. Structure is a square-shape built around a central open atrium. There
are twelve levels of building being basement parking, utility, store and some office, ground floor offices and nine upper
levels of offices.
51
6. VALUATION QUALIFICATIONS
Qualifications are usually detailed as a consequence of:
Leases under negotiation that have not yet been formalised; leases of a large nature where the premises are difficult to relet; specialised properties; large exposure to a single tenant; potential tenant failure due to over-rent; expenses required
for major repairs; maintenance or other exposure to maintain the lettability of the building; contingent expropriations
or servitudes that may be enforced; poor lease recordals whereby the lease may be disputed or rendered invalid.
I have, to the best of my knowledge, considered all of these aspects in the valuation of all the properties. There are no
properties that are prejudiced in value by the influence of the above factors.
I am however not responsible for the competent daily management of these properties that will ensure that this status
is maintained, or for the change of any laws, services by local authority or economic circumstances that may adversely
impact on the integrity of the buildings or the tenant profile, or legal dispute which may result in any cash flow hiatus.
(Section 13.23 (e)).
7.
MARKET CONDITIONS
The portfolio should maintain a solid base value with an annual growth of approximately 7.6% over the next 5 years
and a capital appreciation of approximately 8% per annum due to the strong nature of long term leases in the portfolio.
This is provided that the economy remains in a slow recovery pattern as currently being experienced and that there are
no major economic fluctuations which may upset the economy. Current growth rate of approximately 2.1% for 2015.
(Section 13.23 (f ) (iii));
8. OPTIONS OR BENEFIT/DETRIMENT OF CONTRACTUAL ARRANGEMENTS
To my knowledge there are no contractual arrangements on the properties other than the leases as detailed in the report
that have a major benefit or are detrimental to the fundamental value base of the properties. (Section 13.23 (g)).
To the best of my knowledge, there are no options in favour of any parties for any purchase arrangement on any of the
properties. (Section 13.23 (h)).
9.
INTRA-GROUP OR RELATED PARTY LEASES (Section 13.23 (a) (xi))
Having inspected all the tenant schedules and leases it is noted that there are no intra-group or related party leases.
10. CURRENT STATE OF DEVELOPMENT
There are no properties which are currently being developed. Note, however, that there is spare land capacity for expansion
on certain properties. (Section 13.24, 13.25 and 13.26).
11. EXTERNAL PROPERTY
None of the properties are situated outside the Republic of South Africa. (Section 13.28).
12. RENTALS USED IN VALUATIONS
Note that the portfolio has a vacancy rate of 8.4%. Market related rentals have been applied to this vacant space. The
current annual rental and future annual rentals have been calculated in a separate discounted cash flow check schedule.
It is noted that there are no material rental reversions and that the rentals for all the properties increase on average by
approximately 8.5% compounding per annum.
13. OTHER GENERAL MATTERS AND VALUATION SUMMARY (Sections 13.30 and 13.31)
The full valuation reports will be available for inspection at the offices of Rebosis and Ascension on a property by property
basis detailing tenancy, town planning, valuer’s commentary, expenditure and other details. This has been given to the
directors of Rebosis and Ascension.
52
14. ALTERNATIVE USE FOR A PROPERTY (13.27)
The properties have all been valued in accordance with their existing use which represents their best use and market value.
No alternative uses for the properties have been considered in determination of their value.
15. OTHER COMMENTS
Our valuation excludes any amounts of Value-added Tax, transfer duty, or securities transfer duty.
16. CAVEATS
16.1 Source of information and verification (Section 13.23 (a) (xiii))
Information on the properties regarding rental income, recoveries, turnovers and other income detail has been
provided to me by the current owners and their managing agents.
I have received copies of all of the leases of the existing properties where such leases are the major tenant or tenants
comprising anything higher than 5% occupancy of the property. The leases have been read to check against
management detail records, in order to ensure that management has correctly captured tenant information as per
the contractual agreements. This has been done to test management information accuracy against the underlying
lease agreements.
I have further compared certain expenditures given to me, to the market norms of similar properties. This has also
been compared to historic expenditure levels of the properties themselves. Historical contractual expenditures
and municipal utility services were compared to the past performance of the properties in order to assess potential
expenditure going forward. The municipal values on the properties are generally market related and reasonable
with little potential to increase dramatically.
16.2 Full disclosure
This valuation has been prepared on the basis that full disclosure of all revenue and expenditure information and
factors that may affect the valuation have been made to myself.
I have to the best of my ability researched the market as well as taken the steps detailed in paragraph 16.3 below.
16.3 Leases (Section 13.23 (a) (ix))
Our valuation has been based on a review of actual tenants’ leases (which includes material terms such as repair
obligations, escalations, break options etc.) and other pertinent details which have been supplied to us by the
managing agents and by Ascension. These have been detailed in the tenant schedules attached to each individual
valuation report.
All recovery details in respect of the existing leases e.g. utility cost and other recoveries as provided for in the
leases have been disclosed by way of the monthly tenant invoices and summary schedule supplied to us. Option
terms and other lease information have been supplied to us by the owners and managing agents and we are
familiar with such documents.
16.4 Lessee’s credibility
In arriving at our valuation, cognizance has been taken of the lessee’s security and rating. In some cases this has
influenced the capitalisation rate by way of a risk consideration.
16.5 Mortgage bonds, loans, etc.
The properties have been valued as if wholly-owned with no account being taken of any outstanding monies due
in respect of mortgage bonds, loans and other charges. No deductions have been made in our valuation for costs
of acquisition.
The valuation is detailed in a completed state and no deductions have been made for retention or any other setoff or deduction for any purposes which may be made at the discretion of the purchaser when purchasing the
properties.
53
16.6 Calculation of areas
All areas quoted within the detailed valuation reports are those stated in the information furnished and verified
where plans were available. To the extent that plans were not available, reliance was placed on the information
submitted by the managing agents and lease information.
Updated plans were not available for all the properties in respect of internal configuration. The properties
generally appear to have the stated square meterage as per lease, which could only be more accurately determined
if remeasured by a professional.
16.7 Structural condition
The properties have been valued in their existing state. I have not carried out any structural surveys, nor inspected
those areas that are unexposed or inaccessible, neither have I arranged for the testing of any electrical or other
services.
16.8 Contamination
The valuation assumes that a formal environmental assessment is not required and further that none of the
properties are environmentally impaired or contaminated, unless otherwise stated in our report.
16.9 Town planning (Section 13.23 (a) (vi) and (vii))
Full town planning details and title deeds have been noted in the detailed valuation reports including conditions
and restrictions and the properties have been checked against such conditions. This is to ensure that they comply
with town planning regulations and title deeds. There do not appear to be any infringements of local authority
regulations or deeds by any of the properties.
The valuation has further assumed that the improvements have been erected in accordance with the relevant
Building and Town Planning Regulations and on inspection it would appear that the improvements are in
accordance with the relevant town planning regulations for these properties.
There is no contravention of any statutory regulation, or town planning local authority regulation or contravention
of title deed relating to any of the properties which infringement could decrease the value of the properties as stated
as at current date of local authority legislation.
17. MARKET VALUE
I am of the opinion that the aggregate market value of the properties as at 31 December 2014 is R3 721 400 000.00
(excluding VAT). A summary of the individual valuations and details of each of the properties is attached.
To the best of our knowledge and belief there have been no material changes in circumstances between the date of the
valuation and the date of the valuation report which would affect the valuation.
I have more than 30 years’ experience in the valuation of all nature of property and I am qualified to express an opinion
on the fair market value of the properties.
I trust that I have carried out all instructions to your satisfaction and thank you for the opportunity of undertaking this
valuation on your behalf.
Yours faithfully,
Quadrant Properties (Pty) Ltd
Peter Parfitt
Professional Associated Valuer
Dip Val MIV (SA)
Registration number. 2712/2
Registered without restrictions in terms of the Property Valuer’s Professional Act, No 47 of 2000
Dunkeld Court
16 North Road
Dunkeld West”
(section 13.23 (b))
54
55
Ascension
Bergstan House
Prop Pty Ltd
Ascension
Spectrum House
Prop Pty Ltd
Ascension
Sigma House
Prop Pty Ltd
Ascension
45 On Castle
Prop Pty Ltd
Grey Jade
Trade & Inv
85 Pty Ltd
Ascension
Mishumo House
Prop Pty Ltd
3.
4.
5.
6.
7.
8.
Schreiner
Chambers
Corner Strand and
Bree Streets,
Cape Town Cbd
Matrix House
Ascension
Prop Pty Ltd
2.
Office block
Office block
Office block
De Korte and
De Beer Streets,
Johannesburg
94 Pritchard Street,
Johannesburg
45 Castle Street,
Cape Town
Blanckenberg Street,
Bellville
Office block
Office block
Office block
Office block
Corner Voortrekker and Office block
Blanckenberg Streets,
Bellville
Cnr Castle and
Loop Streets,
Cape Town Cbd
Corner Strand and
Loop Streets,
Cape Town, Cbd
Physical
address
Ascension
Nedbank Centre
Prop Pty Ltd
Property
name
1.
Ref Registered
No owner
Nature
of
property
Erven 2975,
2976, Portion 1
and Re of 2977
and Erf 2978
Johannesburg
(notarily tied)
Erf 5243
Johannesburg
Erf 7243
Cape Town
Erven 11135 and
11136 Bellville
Erf 11123
Bellville
Erf 169833
Cape Town
Erf 1239
Cape Town
Erf 9451
Cape Town
Legal
erf
description
44
47
2 years and
42 years
26
20
49
47
39
Approximate
building
age
(years)
1 499.00
2 986.00
1 170.00
1 428.00
0
744.00
1 458.00
949.00
Land
area
(sqm)
6 154.00
18 815.00
9 537.00
3 751.00
7 551.10
2 838.00
9 001.00
6 332.00
Lettable
building
area
1 886.00
30.65%
5 774.00
30.69%
1 441.00
15.11%
–
694.50
9.20%
–
1 344.00
14.93%
3 765.00
59.46%
Vacancy
(sqm)
and
(%)
T38224/2009
T35479/2009
T68293/2011
T35677/2010
T50347/2009
T9142/2012
T9142/2012
T9142/2012
Title
deed
number
The table below sets out the details of the registered owner, property name, physical address, nature of property, legal erf description, approximate building age, land area, lettable building
area, vacancy and the title deed number of the Ascension portfolio.
Ascension Properties Limited
Property valuation executive summary
As at 31 December 2014
56
Bathopele Building Corner Loveday and
Market Streets,
Johannesburg
Office block
Office block
86 Main Street,
Marshalltown
24 Cumberland Road,
Paarden Eiland,
Cape
Town
17. Ascension
Swiss House
Prop Pty Ltd
18. Ascension
Island Centre
Prop Pty Ltd
Industrial with
small office
Office block
16. Ascension
373 Pretorius Street 373 Pretorius Street,
Prop Pty Ltd
Pretoria
14 Long Street,
Cape Town Cbd
Office block
90 Market Street,
Johannesburg
13. Ascension
90 and 92 Market
Prop Pty Ltd Street
Office block
15. Ascension
14 Long Street
Prop Pty Ltd
76 Juta Street,
Braamfontein
12. Ascension
Nbc Building
Prop Pty Ltd
Office block
Erf 17960 Cape
Town
Erf 1121
Marshalltown
Erf 3255 Pretoria
Erf 4483
Cape Town
Portion 5 and
6 of Erf
40 Riverside Park
Ext 6
Erven 193 and
194
Johannesburg
Erf 4644
Johannesburg
Erf 1433
Nelspruit
Portion 1 of Erf
2961 Pretoria
Office block
Motor retail
park and offices
Corner of
Brown Street and
Paul Kruger Street,
Nelspruit
11. Ascension
Prorom Building
Prop Pty Ltd
Erf 4412
Johannesburg
Legal
erf
description
Office block
14. Ascension
Riverpark 1 & 2
Madiba Street,
Prop Pty Ltd and Riverview 1 & Nelspruit
2 Nelspruit
Corner of
Vermeulen and
Paul Kruger Streets
10. Ascension
Vwl Building
Prop Pty Ltd
Grey Jade
Trade & Inv
85 Pty Ltd
9.
Physical
address
Property
name
Ref Registered
No owner
Nature
of
property
42
42
21
17 896.00
1 490.00
2 552.00
1 420.00
13 619.00
5
39
2 481.00
1 743.00
66
45
2 974.00
3 300.00
32
50
1 488.00
Land
area
(sqm)
54
Approximate
building
age
(years)
23 358.21
7 807.00
13 340.00
10 245.64
8 843.00
2 000.00
10 000.00
7 038.00
17 989.00
11 500.00
Lettable
building
area
171.00
0.73%
70.00
0.90%
–
917.64
8.96%
–
2 000.00
100.00%
–
607.00
8.62%
–
–
Vacancy
(sqm)
and
(%)
T33599/2013
T13189/2013
T91348/2012
T38025/2012
T9009/2013
T37388/2012
T11771/2014
T48899/2012
T8934/2012
T65554/2012
T42118/2007
Title
deed
number
57
Office block
4 Robin Close,
Meyersdal Nature Estate,
Meyersdal
65 Phillip Engelbrecht
Street, Meyersdal
37 Conrad Drive,
Florida Noord,
Roodepoort
174 Visagie Street,
Pretoria
21. Ascension
Infinity Office
Prop Pty Ltd Park, Meyersdal
22. Ascension
Meyersdal Office
Prop Pty Ltd Park
23. Ascension
Medscheme
Prop Pty Ltd
24. Ascension
174 Visagie Street
Prop Pty Ltd
Office block
Office block
26. Ascension Pty Kingfisher Crescent Kingfisher Crescent,
Ltd
Meyersdal
Meyersdal
27. Cape
Game
Horizon Prop
125 Pty Ltd
Cnr of Joubert and
Pritchard Streets,
Johannesburg
Industrial with
small office
25. Ascension
Corporate Landing 238 Roan Crescent,
Prop Pty Ltd
Randjespark
Office block
Office block
Office block
Office block
with retail on
the ground floor
Cnr Darling and
Plein Streets,
Cape Town
Office block and
retail on the
ground floor
20. Ascension
Grand Central
Prop Pty Ltd
Physical
address
Shell House and
Ovenstone House,
2 Waterkant Street,
Cape Town
Property
name
19. Ascension
Atterbury House
Prop Pty Ltd
Ref Registered
No owner
Nature
of
property
Erven 676 and
4677
Johannesburg
Erf 2175
Meyersdal Ext 19
Erf 342
Randjespark Ext
100
Erf 2901 Pretoria
Erf 330 Florida
Noord Ext 7
Erf 2259
Meyersdal Ext 12
44
7
12
38
21
3 474.00
2 277.00
16 734.00
3 794.00
16 846.00
9 864.00
0
9
9
6 402.00
50
Erven 4648,
4649 and 4650
Cape Town
Erf 84 Meyersdal
Nature Estate
Ext 6 and Erf
2054 Meyersdal
Nature Estate
Ext 17
4 419.00
Land
area
(sqm)
34
Approximate
building
age
(years)
Unit 1 Ss Shell
House and
Ovenstone
House 747/2006
Legal
erf
description
21 562.00
1 445.00
9 040.00
13 376.00
6 792.00
4 840.50
12 012.00
33 424.06
26 240.11
Lettable
building
area
Title
deed
number
4 351.00
20.18%
–
1.00
0.01%
–
–
1 932.50
39.92%
–
79.00
0.24%
T28947/2013
T48421/2012
T97546/2012
T46378/2013
T49283/2012
T48393/2012
T48698/2012
T79992/2012
8 665.78 ST12348/2013
33.02%
Vacancy
(sqm)
and
(%)
58
Property
name
Cnr of Rissik and
Fox Streets,
Johannesburg
Physical
address
Office block
Erf 1263
Marshalltown
Legal
erf
description
38
Approximate
building
age
(years)
2 082.00
Land
area
(sqm)
11 738.00
Lettable
building
area
–
Vacancy
(sqm)
and
(%)
T7895/2014
Title
deed
number
Nedbank
Centre
Ascension
Prop Pty Ltd
Ascension
Prop Pty Ltd
Ascension
Prop Pty Ltd
Ascension
Prop Pty Ltd
Ascension
Prop Pty Ltd
Ascension
Prop Pty Ltd
1.
2.
3.
4.
5.
6.
General business
– B5
45 On Castle
Sigma House
Spectrum
House
Bergstan
House
General Business
– B5
Central Business
area
Central business
General business
– B5
Matrix House General business
– B5
Property
name
Ref Registered
No owner
Zoning
and town
planning
and statutory
contravention
(if any)
National
Department of
Public Works
National
Department of
Public Works
National
Department of
Public Works
Bergstan
Consulting
Engineers
Department of
Arts and
Culture
Environmental
Affairs
Major
tenant/s
84.89%
88.11%
78.66%
74.28%
85.07%
35.29%
Percentage
of space
occupied
by major
tenant/s
76
55
54
2
82
59
Lease
duration
still to run
on major
tenant
(months)
Nil
Nil
Nil
Nil
Nil
Nil
Intra
group
leases or
related
leases
1.00%
1.00%
1.25%
1.00%
1.50%
2.00%
Assumed
perpetual
void/
vacancy
Rental
to market
relationship
Higher than
market
Freehold Slightly higher
than market
Freehold
Freehold Market related
Freehold Market related
Freehold Market related
Freehold Market related
Ownership
nature
148 500 000.00
48 000 000.00
92 000 000.00
29 300 000.00
76 000 000.00
40 000 000.00
Valuation
(R)
The table below sets out the details of the registered owner, property name, zoning and town planning and statutory contravention (if any), major tenant/s, percentage of space occupied
by major tenant/s, lease duration still to run on major tenant, intra group leases or related leases, assumed perpetual void/ vacancy, ownership nature, rental to market relationship and
valuation of the Ascension portfolio.
28. Main Street Surrey House
1119 Pty Ltd
Ref Registered
No owner
Nature
of
property
59
Vwl Building
Prorom
Building
Nbc Building
90 and 92
Market Street
Riverpark 1 &
2 and
Riverview 1 &
2 Nelspruit
14 Long
Street
10. Ascension
Prop Pty Ltd
11. Ascension
Prop Pty Ltd
12. Ascension
Prop Pty Ltd
13. Ascension
Prop Pty Ltd
14. Ascension
Prop Pty Ltd
15. Ascension
Prop Pty Ltd
Vacant
Nbc Holding
(triple net lease)
Department of
Water Affairs
National
Department of
Public Works
Gauteng
Provincial
Government
National
Department of
Public Works
National
Department of
Public Works
Major
tenant/s
General business
– B5 and
General
Commercial
– C5
Department of
Land Affairs
Special for Dept Education
motor dealer
and motor
related uses and
also offices
Business 1
Business 1
Business 1
Business 1
Business 1
Grey Jade
Trade & Inv
85 Pty Ltd
9.
Bathopele
Building
Ascension
Prop Pty Ltd
8.
Business 1
general
Business 1
Schreiner
Chambers
Grey Jade
Trade & Inv
85 Pty Ltd
7.
Mishumo
House
Property
name
Ref Registered
No owner
Zoning
and town
planning
and statutory
contravention
(if any)
62.03%
33.93%
100.00%
100.00%
77.76%
100.00%
1 and 34
11
Nil
38
9
36
38
53
69.35%
100.00%
75
Lease
duration
still to run
on major
tenant
(months)
28.72%
Percentage
of space
occupied
by major
tenant/s
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Intra
group
leases or
related
leases
0.50%
2.00%
5.00%
2.25%
2.00%
0.75%
0.75%
3.50%
5.00%
Assumed
perpetual
void/
vacancy
Rental
to market
relationship
Higher than
market
Higher than
market
Freehold Market related
Freehold
Freehold Market related
Freehold Slightly higher
than market
Freehold Market related
Freehold Market related
Freehold Market related
Freehold
Freehold Market related
Ownership
nature
126 000 000.00
147 000 000.00
7 000 000.00
133 500 00.00
69 000 000.00
167 000 000.00
138 000 000.00
72 000 000.00
163 000 000.00
Valuation
(R)
60
373 Pretorius
Street
Swiss House
Island Centre
Atterbury
House
Grand Central General Business
Infinity Office
Park,
Meyersdal
Meyersdal
Office Park
Medscheme
16. Ascension
Prop Pty Ltd
17. Ascension
Prop Pty Ltd
18. Ascension
Prop Pty Ltd
19. Ascension
Prop Pty Ltd
20. Ascension
Prop Pty Ltd
21. Ascension
Prop Pty Ltd
22. Ascension
Prop Pty Ltd
23. Ascension
Prop Pty Ltd
Joburg Water
City of
Tshwane
Metropolitan
Municipality
Major
tenant/s
Special
Special for
offices and
dwelling units
Special for
residential and
industrial and
commercial
buildings
General Business
7
Medscheme
Holdings
100.00%
100.00%
63.21%
Department of
Education
Various small
tenants
occupying 5%
or less
59.60%
72
15 months
on average
42
9
Nil and 30
for some
small section
Nil
36.19%
32.25%
65
Nil
Lease
duration
still to run
on major
tenant
(months)
88.41%
100.00%
Percentage
of space
occupied
by major
tenant/s
Western Cape
Government
Department of
Public Works
General
The
Industrial 2 Government of
the Republic of
South Africa
Dep
Business 1
Business 1
Property
name
Ref Registered
No owner
Zoning
and town
planning
and statutory
contravention
(if any)
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Intra
group
leases or
related
leases
0.25%
3.50%
0.50%
1.00%
6.00%
2.25%
1.00%
1.50%
Assumed
perpetual
void/
vacancy
Rental
to market
relationship
Higher than
market
Freehold Market related
Freehold Market related
Freehold Market related
Freehold Slightly higher
than market
Freehold Market related
Freehold Market related
Freehold
Freehold Slightly higher
than market
Ownership
nature
91 000 000.00
44 000 000.00
217 000 000.00
549 000 000.00
324 000 000.00
72 000 000.00
97 000 000.00
203 000 000.00
Valuation
(R)
61
99.98%
81.73%
Special Datacentrix Pty
Ltd
Special Uniclox Pty Ltd
26. Ascension Pty Kingfisher
Ltd
Crescent
Meyersdal
TOTAL
Business 1
28. Main Street
1119 Pty Ltd
Surrey House
Business 1
27. Cape Horizon Game
Prop 125 Pty
Ltd
Department of
Infrastructural
Development
DID
92.93%
48.46%
100.00%
Corporate
Landing
City of
Tshwane
Metropolitan
Municipality
25. Ascension
Prop Pty Ltd
Business 1
174 Visagie
Street
24. Ascension
Prop Pty Ltd
Major
tenant/s
Property
name
Percentage
of space
occupied
by major
tenant/s
Ref Registered
No owner
Zoning
and town
planning
and statutory
contravention
(if any)
47
51
19
10 and 19
for the
smaller
section
3
Lease
duration
still to run
on major
tenant
(months)
Nil
Nil
Nil
Nil
Nil
Intra
group
leases or
related
leases
1.00%
2.00%
0.50%
1.75%
1.00%
Assumed
perpetual
void/
vacancy
Rental
to market
relationship
Freehold
Higher than
market
Freehold Market related
Freehold Market related
Freehold Market related
Freehold Market related
Ownership
nature
3 721 400 000.00
181 000 000.00
189 000 000.00
22 600 000.00
111 500 000.00
164 000 000.00
Valuation
(R)
Annexure 8
SALIENT FEATURES OF THE BILLION ASSET MANAGEMENT AGREEMENT, THE
ASCENSION ASSET MANAGEMENT AGREEMENT AND THE PROPERTY MANAGEMENT
AGREEMENTS AND BROKING COMMISSIONS PAYABLE TO BILLION PROPERTY
SERVICES
The salient features of the asset management and property management agreements of Rebosis and Ascension are set out
below. The details below are a direct extract from the relevant agreements.
1. THE BILLION ASSET MANAGEMENT AGREEMENT
“4. Appointment and duration
4.1
Rebosis hereby, with effect from the commencement date, appoints the asset manager, which hereby accepts
such appointment, to render the asset management and property management services to Rebosis and manage
the operational management of Rebosis in accordance with the terms and conditions of this agreement.
4.2
The asset manager shall be an independent contractor and not an agent (save to the extent expressly authorised
in terms of this agreement) employee, partner of, or joint venturer with Rebosis. If the asset manager owns
any interest in or provides other services to Rebosis, nothing contained herein shall be construed or interpreted
to modify, relax or vary this agreement and the asset manager’s duties hereunder shall be entirely separate from
any other relationship with Rebosis.
4.3
The asset manager shall not have the authority to represent Rebosis and to contract in the name of and for
the benefit of Rebosis except where such authority is expressly conferred upon it in terms of this agreement
and when so representing Rebosis, the asset manager will act in the best interests of Rebosis.
4.4
This agreement shall commence on the commencement date and, subject to the provisions of clause 14,
continue indefinitely. Notwithstanding the aforesaid, either party is entitled to terminate this agreement by
giving 3 (three) years’ written notice, provided that such notice may only be delivered to the other party on
or after the fourth anniversary of the date of signature of this agreement.”
“5. Duties of the asset manager
5.1
Asset management services
The asset manager shall perform the asset management services set out in Annexure A, together with such
other duties as agreed in writing between Rebosis and the asset manager from time to time. The asset manager
is required to render to Rebosis the asset management services in compliance with its obligations in terms of
this clause 5.1 and in so doing shall render all such other property asset management services, whether set out
in Annexure A or not, as may be normally expected from asset managers and/or as Rebosis may reasonably
direct in order to ensure that the operating standard is achieved and maintained.
5.1.1
Operating standard
The asset manager shall strategically manage the property portfolio in an efficient manner, in good
faith and diligently in accordance with sound, reasonable and prudent asset management practices
and in keeping with directives issued by Rebosis from time to time (“the operating standard”). The
asset manager shall devote its efforts to serving Rebosis in accordance with the terms of this agreement
and shall perform its duties hereunder in a diligent and careful manner aimed at achieving the
operating standard as a standard of performance. The asset manager, in rendering these services to
Rebosis, shall be entitled to make use of the assets of Rebosis. The asset manager shall regularly
communicate with the major unitholders of Rebosis and shall consult real estate market experts from
time to time to effectively and completely provide the asset management services contemplated in
this clause 5.1.
5.1.2
Strategy
5.1.2.1 The asset manager shall prepare and deliver to Rebosis prior to the commencement of
each financial year a strategic plan for approval by Rebosis. The strategic plan will be
reviewed half yearly and the progress in implementation shall be reported upon quarterly
to Rebosis within 60 (sixty) days after the end of each quarter, unless Rebosis agrees
otherwise.
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5.1.2.2 In addition to clause 5.1.2.1, the asset manager shall from time to time recommend
general strategies to maximise the performance of the property portfolio and strategies
with regard to property acquisitions, property disposals, new developments, funding the
expansion of the property portfolio and interest rate strategies in respect of the liabilities
of Rebosis. The asset manager will also recommend such other strategies to Rebosis which
it deems to be in the best interests of Rebosis.
5.1.3
Marketing
The asset manager shall market the group to investors, analysts, bankers, financiers, the press and the
investment community generally.
5.1.4
Strategic research
The asset manager shall cause to be conducted or use available research into the state and relative
investment merits of the various sectors and geographical localities of the property market. Such
research shall be made available to the Rebosis board on reasonable request therefor.
5.1.5
Succession plan
5.1.5.1 The asset manager shall as soon as possible after the date of signature prepare a succession
plan for its management and staff and submit such plan to Rebosis for its approval.
5.1.5.2 The purpose of the succession plan is, without limiting the generality of the term, to
provide for the adequate management and staffing of the asset manager with a view to
having available the requisite skill and expertise to conduct and maintain the business of
Rebosis during the term of this agreement.
5.1.5.3 If Rebosis elects not to approve the succession plan proposed by the asset manager, Rebosis
will issue such instructions in respect of succession planning to the asset manager as it
deems necessary in order to adequately protect the interests of Rebosis in relation to
succession and the asset manager shall implement such directives.
5.2
Operational management
5.2.1
The asset manager shall manage the operational management of Rebosis. The operational
management functions are set out in Annexure B. The asset manager, in rendering the operational
management services contemplated in this clause 5.2 shall render all such other operational
management services, whether set out in Annexure B or not, as may normally be expected from asset
managers and/or as Rebosis may reasonably direct in order to ensure that the operating standard is
achieved and maintained.
5.2.2
The asset manager shall, in addition to the asset management services rendered in terms of clause
5.1, manage the operational management of Rebosis in accordance with the provisions of this clause
5.2. The asset manager shall be responsible for the actions and/or omissions of its employees acting
in the course and scope of their functions and duties as such.
5.2.3
Annual budget
Before and as close as possible to the beginning of each financial year the asset manager shall cause
to be prepared an annual budget for submission to Rebosis for approval for the next financial year.
The asset manager shall cause to be revised the income and expenditure forecasts from time to time
as is or becomes necessary and shall from time to time submit revised forecasts to Rebosis for
approval, provided that any negative revisions to income shall be reported to the next following
meeting of Rebosis and any unbudgeted expenditure, save for increases in local authority taxes and
charges which were not anticipated, shall likewise be reported to Rebosis. In addition to the above,
the business of Rebosis shall be managed in accordance with the annual budget on a continual basis
with projections for the next financial year being presented to Rebosis in the annual budget together
with the projected earnings for the linked units of Rebosis, on the understanding that the annual
budget will be reviewed by Rebosis within 60 (sixty) days after the end of each half year.
5.2.4
Financial reporting
The asset manager shall manage the budgeted projections in respect of both operating expenditure
and operating income and all other related financial controls and cause to be prepared monthly
management accounts, quarterly reports and such other reports as may be reasonably required by
Rebosis.
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5.2.5
Operating policy
The asset manager shall ensure that the letting policies and leasing terms adopted by Rebosis are in
accordance with prevailing market conditions from time to time in furtherance of the objectives for
the property portfolio.
5.2.6. Operational research
The asset manager shall cause to be conducted or use available research into prevailing rental rates
and leasing terms offered in localities where the property portfolio is represented and comparative
localities and research of general market conditions prevailing in such localities. Such research shall
be made available to the Rebosis board on reasonable request made therefor.
5.2.7
Operational responsibilities
The asset manager shall, inter alia, and without limiting its operational management responsibilities,
cause to be prepared and/or implemented:
5.2.7.1 approved strategic plans;
5.2.7.2 valuations of the property portfolio by an independent valuer as directed by Rebosis, or as
required by IFRS;
5.2.7.3 a review of municipal valuations in relation to market value, formulating objections and
procuring the attendance by the requisite professionals at any valuation court proceedings
as may be required and taking such further actions as may be required as a result thereof;
5.2.7.4 the inspection of the properties and the improvements thereto at least annually in order to
formulate recommendation reports on maintenance and refurbishment required;
5.2.7.5 any legal, statutory, JSE or any other relevant processes necessary on behalf of Rebosis.
5.2.8
Acquisitions, developments and disposals
The asset manager shall:
5.2.8.1 cause to be implemented the strategic plan in respect of acquisitions, developments and
disposals in accordance with Rebosis approved objectives for the property portfolio; and
5.2.8.2 ensure that appropriate project co-ordinators are appointed for ongoing and/or new
developments and/or the refurbishment or alterations and/or additions to existing
developments and monitor the progress in regard thereto.”
“7. Remuneration
7.1
Asset management fee
7.1.1
The remuneration payable by Rebosis to the asset manager for all asset management and operational
management services rendered by it in terms of this agreement shall be a monthly fee of 1/12th of
0,3% (one twelfth of zero comma three percent) of the aggregate of the market capitalisation and the
borrowings of Rebosis.
7.1.2
For the purpose of clause 7.1.1 above:
7.1.2.1 “borrowings” means the aggregate of Rebosis’ borrowings (excluding the face value of any
debentures forming part of any linked units issued by Rebosis) on the last day of the
month for which the fee is being calculated, as confirmed by the relevant lender/s. In
determining Rebosis’ borrowings, the asset manager shall be entitled to take into account
any borrowings to be incurred in respect of an unconditional acquisition, the effective date
of which occurs prior to the date on which the funding is to be advanced; and
7.1.2.2 “market capitalisation” means the market capitalisation of Rebosis on the JSE at the
close of business on the last trading day of the month for which the fee is being calculated,
calculated as the volume weighted average traded price of a linked unit on the JSE for the
14 (fourteen) calendar day period prior to that trading day multiplied by the number of
linked units then in issue. For the purpose of determining the number of linked units in
issue, the asset manager shall be entitled to take into account any units still to be issued
pursuant to an unconditional acquisition, the effective date of which occurs prior to the
date on which such linked units are to be issued.
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7.2
7.1.3
The fee referred to above shall be payable to the asset manager monthly in arrears on the 10th (tenth)
day of each month, together with the applicable VAT thereon.
7.1.4
For the avoidance of doubt, the parties record that neither the asset manager nor its beneficiaries will
be entitled to any remuneration in addition to that permitted in terms of this agreement, whether
through commissions, bonuses, promoter’s fees, share options or any other form of remuneration or
reward, unless approved by Rebosis.
Reimbursement of expenses incurred on behalf of Rebosis
7.2.1
If the asset manager incurs any of the specified expenses, the asset manager shall be entitled to be
reimbursed by Rebosis for such expenses upon presentation of the relevant proof of payment together
with supporting documentation. Any other expenditure incurred by the asset manager without the
prior written consent of Rebosis, shall be for the account of the asset manager.
7.2.2
The asset manager shall report to Rebosis on a quarterly basis detailing Rebosis expenses disbursed
by the asset manager as envisaged in terms of clause 7.2.1.”
“12.Option to acquire the asset manager
12.1 Rebosis shall be entitled to purchase the business conducted by Billion Asset Managers and/or the shares in
and claims on loan account in Billion Asset Managers from the Billion Asset Managers shareholders including
their respective successors-in-title by giving 12 twelve months written notice to the Billion Asset Managers
shareholders (the “exercise notice”) which exercise notice may not be given within the first 4 years of this
appointment. In such event a sale of business and/or sale of shares shall be deemed to have been concluded
on the following terms and conditions:
12.1.1 Rebosis shall be entitled to carry out a due diligence investigation into the affairs of Billion Asset
Managers and Billion Asset Managers shall provide Rebosis all information which Rebosis may
reasonably require pursuant thereto;
12.1.2 the acquisition shall be subject to Rebosis complying with the requirements of the JSE Listings
Requirements and without derogating from the generality of the aforegoing, that Rebosis procure a
fairness opinion from an independent advisor should the JSE rule that the transaction is a related
party transaction and requires a fairness opinion;
12.1.3 if applicable, the shares shall be delivered in transferable form to Rebosis against payment of the
purchase price;
12.1.4 if applicable, Rebosis shall bear the costs of any Securities Transfer Tax payable in respect of the
acquisition of the shares and claims on loan account against Billion Asset Managers;
12.1.5 the business and/or the shares and claims shall be acquired voetstoots with effect from the expiry of
the 12 twelve month period;
12.1.6 the purchase price business and/or the shares and loan accounts shall be the fair market value thereof
to be agreed between the parties or, failing agreement, to be determined by the auditors of Rebosis.
The auditors in determining fair value may call on all or any of the parties to make written
representation in regard to the value of the business and/or shares and furnish any such representation
to the remaining parties and must take into account the price earnings multiple of any JSE listed
company conducting similar business to that of the asset manager. Whether or not any party makes
any representations, the auditors shall be entitled to consult with any of the parties or with any other
person. In determining fair value the auditors shall act as expert and not as arbitrator.
12.2 If any party challenges the auditors’ decision, which it may only do by delivering a certificate by another
auditor setting out the basis on which such decision is challenged within 15 business days of receipt of the
auditor’s determination, the matter shall be referred to an independent chartered accountant appointed by the
chairperson for the time being of the Institute of Chartered Accountants SA. Such independent chartered
accountant shall act as an expert and not as an arbitrator and his decision shall be final and binding. He shall
determine liability for his charges. If any determination is manifestly unjust, but the court exercises its general
power, if any, to correct such determination, the parties shall be bound thereby.
12.3 Notwithstanding anything to the contrary contained in this clause 12, the provisions of this clause 12 shall
apply only if a quorum of independent directors of Rebosis votes in favour of a resolution to invoke the
provisions of this clause 12.”
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“14.Termination
14.1 Events of default
An event of default shall have occurred if a party:
14.1.1 fails to comply with any provision of this agreement and if such failure is not rectified within 10 (ten)
business days after receipt of a written notice from the other party, provided, however, with respect
to any matter where rectifying such failure reasonably requires more than 10 (ten) business days, the
time period for rectifying shall be extended for up to a total of 30 (thirty) business days provided that
the party who failed, promptly commences to rectify the failure after the effective date of the notice
and thereafter pursues such rectification; or
14.1.2 enters into a compromise or arrangement with its creditors, otherwise than for a reconstruction,
restructuring or amalgamation without insolvency; or
14.1.3 is placed under judicial management or a liquidation whether provisional or final; or
14.1.4 has a judgement enforced upon or sued out against its property which is not discharged or steps are
not taken to set it aside or the judgement is appealed within 14 (fourteen) business days and such
steps are not diligently pursued to conclusion; or
14.1.5 is unable to pay its debts in the normal course of business; or
14.1.6 ceases or threatens to cease wholly or substantially to carry on its business, otherwise than for a
reconstruction, restructuring or amalgamation, in solvent circumstances; or
14.1.7 is subject to an encumberer taking possession of or a liquidator or trustee is appointed over the whole
or material part of its undertaking, property or assets; or
14.1.8 is subject to an order or passes a resolution for its winding up or placing under judicial management,
whether provisionally or finally and, otherwise than for the purpose of a reconstruction or
amalgamation, in solvent circumstances previously approved by the other party, which approval shall
not be unreasonably withheld.
14.2 Rebosis’ right to cancel or terminate
14.2.1 Rebosis shall have the right, but not be obliged, to terminate this agreement upon 60 (sixty) days’
written notice to the asset manager:
14.2.1.1 upon the occurrence of an event of default by the asset manager, provided that if the event
of default complained of is the event of default contemplated in clause 14.1.1, Rebosis
shall only have the right to cancel if such event of default is material, goes to the root of
this agreement and cannot be remedied by the payment of monetary compensation; and/
or
14.2.1.2 in the event of proven fraud; and/or
14.2.1.3 upon a sale or alienation or other disposition of more than 50% (fifty per cent) in value of
the properties by Rebosis to an entity which is not associated with Rebosis or the asset
manager but subject to the provisions of clause 14.4 below; and/or
14.2.1.4 upon the performance criteria and written demands set out in Annexure C not being met,
but subject to the provisions of Annexure C.
14.2.2 In the event that the linked unitholders of Rebosis in general meeting pass an ordinary resolution in
terms of which they cancel this agreement other than in accordance with the notice provisions of
clause 4.4 (as they are entitled to do in terms of the Listing Requirements of the JSE), this agreement
shall terminate on the 60th day from the date of the passing of such resolution. Provided that such
termination does not arise as a consequence of an event of default by the asset manager as contemplated
in clause 14.2.1.1 or the failure by the asset manager to meet the performance criteria as contemplated
in clause 14.2.1.4 such cancellation shall be subject to the provisions of clause 14.4 below.
14.3 The asset manager’s right to terminate
The asset manager shall have the right, but not be obliged, to terminate this agreement upon 60 (sixty) days’
written notice to Rebosis:
14.3.1 upon the occurrence of an event of default by Rebosis or in the event of fraud or wilful misconduct
on the part of Rebosis, provided that if the event of default complained is the event of default
contemplated in clause 14.1.1, the asset manager shall only have the right to terminate if such event
of default is material and goes to the root of the agreement and cannot be remedied by the payment
of monetary compensation; and/or
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14.3.2 upon a sale or alienation or other disposition of all or substantially all of the properties by Rebosis to
an entity which is not associated with Rebosis or the asset manager.
14.4 Consequences of termination
14.4.1 If Rebosis elects to terminate the agreement (i) pursuant to an event contemplated in clause 14.2.1.3
in circumstances where the acquirer has not agreed to take over the rights and obligations of Rebosis
in respect of the properties sold, alienated or disposed of in terms of this agreement; or (ii) in
accordance with clause 14.2.2 (the “termination event”), Rebosis shall pay to the asset manager by
way of compensation for the relinquishment of an income-generating asset, the net present value of
the specified management fee (as defined below) for the agreed termination period, as determined by
the auditors of Rebosis based on such assumptions as they deem reasonable in the circumstances,
save that:
14.4.1.1 they shall be obliged to assume the information contemplated in clause 7.1 as at the date
of cancellation or termination as fixed for the duration of the agreed termination period;
14.4.1.2 the applicable period for which the present value calculation shall be determined shall be
the agreed termination period; and
14.4.1.3 they shall be obliged to use a discount rate equivalent to the prime rate.
14.4.2 For purposes of this clause 14.4:
14.4.2.1 “agreed termination period” means a period of 3 (three) year calculated from the date of
termination, provided that if the right to terminate contemplated in clause 14.4.1 is
exercised within 4 (four) years after the date of signature, the agreed termination period
shall, for purposes of this clause 14.4, be 3 (three) years plus the remaining period of the
first 4 (four) years of the agreement; and
14.4.2.2 the “specified management fee” means the management fee paid to the asset manager in
terms of clause 7.1 (the “actual management fee”) for the 12 (twelve) months immediately
preceding the termination event of default, or if this agreement has endured for less than
12 (twelve) months from the commencement date, then the actual management fee,
annualised, after deducting expenses actually incurred by the asset manager in providing
the asset management services for the relevant period.
14.5 Duties upon termination
On the effective date of a termination, the asset manager shall deliver to Rebosis promptly all of Rebosis’
materials, supplies, keys, leases, contracts, other documents, insurance policies, plans, specifications, permits,
licenses, promotional materials and such other accounting papers and records including general correspondence
as pertain to this agreement. The asset manager shall also assign to Rebosis, without recourse to the asset
manager, executed contracts, if any, in the asset manager’s name relating to the asset management services,
provided that such contracts are on market related terms and acceptable to Rebosis. The asset manager shall
deliver to Rebosis a final accounting of the portfolio up to and including the effective date of the termination
within 60 (sixty) days after such effective date of termination. No further services shall be performed by the
asset manager under this agreement after the effective date of a termination or rely on or represent any
association with Rebosis, except that the asset manager shall co operate fully with Rebosis to accomplish an
orderly transfer of the asset management services and operational management of Rebosis to Rebosis itself or
an entity designated by Rebosis to succeed the asset manager.
14.6 Remedies and survival
14.6.1 If either party terminates this agreement pursuant to an event of default, the party so terminating
may exercise any and all remedies available at law or in terms of this agreement for breach of contract,
unless and to the extent limited herein.
14.6.2 Upon expiration or any termination:
14.6.2.1 both parties shall remain liable for all obligations accrued and not fully performed under
this agreement during the term of this agreement;
14.6.2.2 the asset manager shall remain entitled to be remunerated until the actual date of expiration
or termination;
14.6.2.3 the provisions of clause 8 and clause 12 shall continue to apply and shall survive such
expiration or termination.”
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2. ASCENSION ASSET MANAGEMENT AGREEMENT
“5 DURATION
5.1
This Agreement shall commence on the Commencement Date and shall, subject to the provisions of clauses
16 and 22, continue for an initial period of 10 (ten) years (“Initial Period”) after which it shall terminate,
unless renewed in accordance with clause 5.2.
5.2
This Agreement may be renewed for a period of 5 (five) years from the date of expiry of the Initial Period
(“Renewal Period”), and thereafter for further consecutive periods of 5 (five) years from the date of expiry of
any subsequent Renewal Period, by way of an ordinary resolution of Linked Unit Holders adopted at a
general meeting of Linked Unit Holders prior to the expiry of the Initial Period or any Renewal Period, as the
case may be.
5.3
Notwithstanding the aforegoing, either Party is entitled to terminate this Agreement by giving 3 (three) years’
written notice, provided that such notice may only be delivered to the other Party on or after the 7th (seventh)
anniversary of the Commencement Date.”
“6 APPOINTMENT AND DUTIES
6.1
The Company hereby, with effect from the Commencement Date, appoints the Manager, which accepts such
appointment, to:
6.1.1
render the Asset Management Services;
6.1.2
manage the Operational Management; and
6.1.3
procure the Property Administration Services by the Property Managers,
in accordance with the further terms and conditions of this Agreement.
6.2
The Manager shall be an independent contractor and not an agent (save to the extent expressly authorised in
terms of this Agreement) employee, partner of, or joint venturer with the Company. If the Manager owns any
interest in or provides other services to the Company, nothing contained herein shall be construed or
interpreted to modify, relax or vary this Agreement and the Manager’s duties hereunder shall be entirely
separate from any other relationship with the Company.
6.3
The Manager shall not have the authority to represent the Company and to contract in the name of and for
the benefit of the Company except where such authority is expressly conferred upon it in terms of this
Agreement and when so representing the Company, the Manager will act in the best interests of the Company.
6.4
Asset Management Services
The Manager shall perform the Asset Management Services as set out in Annexure “1” hereto, together with
such other duties as may be agreed in writing between the Company and the Manager from time to time, in
accordance with this clause 6.4. The Manager shall render the Asset Management Services and any such other
asset management services (whether set out in Annexure “1” or not) as may be normally expected from asset
managers and/or as the Company may reasonably direct in order to ensure that the Operating Standard is
achieved and maintained.
6.4.1
Operating Standard
The Manager shall strategically manage the Property Portfolio in an efficient manner, in good faith
and diligently in accordance with sound, reasonable and prudent asset management practices and in
keeping with directives issued by the Company from time to time (the “Operating Standard”). The
Manager shall devote its efforts to serving the Company in accordance with the terms of this
Agreement and shall perform its duties hereunder in a diligent and careful manner aimed at achieving
the Operating Standard as a standard of performance. The Manager, in rendering these services to
the Company, shall be entitled to make use of the assets of the Company. The Manager shall regularly
communicate with the Board and may consult real estate market experts from time to time to
effectively and completely provide the Asset Management Services on the basis contemplated in this
clause 6.4.
6.4.2
Strategy
6.4.2.1 The Manager shall prepare and deliver to the Company prior to the commencement of
each Financial Year a strategic plan for approval by the Company. The strategic plan will
be reviewed half yearly and the progress in implementation shall be reported upon
quarterly to the Company within 60 (sixty) days after the end of each quarter, unless the
Company agrees otherwise.
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6.4.2.2 In addition to the provisions of clause 6.4.2.1, the Manager shall from time to time
recommend general strategies to maximise the performance of the Property Portfolio and
strategies with regard to property acquisitions, property disposals, new developments,
funding the expansion of the Property Portfolio and interest rate strategies in respect of the
liabilities of the Company. The Manager will also recommend such other strategies to the
Company which it deems to be in the best interests of the Company.
6.4.3
Marketing
The Manager shall market the Group to investors, analysts, bankers, financiers, the press and the
investment community generally.
6.4.4
Strategic research
The Manager shall either cause to be conducted or use available research into the state and relative
investment merits of the various sectors and geographical localities of the property market. Such
research shall be made available to the Board on reasonable request.
6.5
Operational Management
6.5.1
The Manager shall manage the operational management of the Company (“Operational
Management”). The Operational Management functions are set out in Annexure “2”. The Manager,
in rendering the Operational Management services contemplated in this clause 6.5, shall render all
such other Operational Management services, whether set out in Annexure “2” or not, as may
normally be expected from asset managers and/or as the Company may reasonably direct to ensure
that the Operating Standard is achieved and maintained.
6.5.2
The Manager shall, in addition to the Asset Management Services, manage the Operational
Management of the Company in accordance with the provisions of this clause 6.5. The Manager
shall be responsible for the actions and/or omissions of its employees acting in the course and scope
of their functions and duties as such.
6.5.3
Annual budget
Not later than 30 days before the commencement of each Financial Year, the Manager shall cause to
be prepared an Annual Budget for submission to the Company for approval for the next Financial
Year. The Manager shall cause to be revised the income and expenditure forecasts from time to time
as is or becomes necessary and shall from time to time submit revised forecasts to the Company, in
such form and containing such information as may reasonably be required by the Company, for
approval, provided that any negative revisions to income shall be reported to the next following
meeting of the Company and any unbudgeted expenditure, save for increases in local authority taxes
and charges which were not anticipated, shall likewise be reported to the Company. In addition to
the above, the business of the Company shall be managed in accordance with the Annual Budget on
a continual basis with projections for the next Financial Year being presented to the Company in the
Annual Budget together with the projected earnings for the Linked Units of the Company, on the
understanding that the Annual Budget will be reviewed by the Company within 60 (sixty) days after
the end of each half year.
6.5.4
Financial reporting
The Manager shall manage the budgeted projections in respect of both operating expenditure and
operating income and all other related financial controls and cause to be prepared monthly
management accounts, quarterly reports and such other reports as may be reasonably required by the
Company.
6.5.5
Letting policy
The Manager shall ensure that the letting policies and leasing terms adopted by the Company are in
accordance with prevailing market conditions from time to time in furtherance of the objectives for
the Property Portfolio.
6.5.6
Operational research
The Manager shall cause to be conducted or use available research into prevailing rental rates and
leasing terms offered in localities where the Property Portfolio is represented and comparative
localities and research of general market conditions prevailing in such localities. Such research shall
be made available to the Board on reasonable request.
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6.5.7
Operational responsibilities
The Manager shall, without limiting its Operational Management responsibilities, cause to be
prepared and/or implemented:
6.5.7.1 approved strategic plans;
6.5.7.2 valuations of the Property Portfolio by an independent valuer as directed by the Company
or as required by IFRS;
6.5.7.3 an annual review of municipal valuations of the Properties in relation to the market value,
formulating objections and procuring the attendance by the requisite professionals at any
valuation court proceedings as may be required and taking such further actions as may be
required;
6.5.7.4 the inspection of the Properties and the improvements thereto at least annually in order to
formulate recommendation reports on maintenance and refurbishment required; and
6.5.7.5 any legal, statutory, JSE or any other relevant processes necessary on behalf of the
Company.
6.5.8
Acquisitions, developments and disposals
The Manager shall:
6.5.8.1 cause to be implemented the strategic plan in respect of acquisitions, developments and
disposals in accordance with the Company approved objectives for the Property Portfolio;
and
6.5.8.2 ensure that appropriate project co-ordinators are appointed for ongoing and/or new
developments and/or the refurbishment or alterations and/or additions to existing
developments and monitor the progress in regard thereto.
6.5.9
Secretarial
The Manager shall further be responsible for:
6.5.9.1 investing surplus funds;
6.5.9.2 maintaining all books of account for the Property Portfolio;
6.5.9.3 maintaining all the Property Portfolio’s necessary secretarial documentation, including
minutes and resolutions, if and to the extent that (1) the Company has not resolved to do
so itself or (2) this is not the responsibility of a Property Manager appointed by the
Company;
6.5.9.4 liaison and provision of information for annual audit;
6.5.9.5 taking minutes at meetings;
6.5.9.6 circulating all agendas and minutes;
6.5.9.7 attending to correspondence; and
6.5.9.8 attending to the requirements of the JSE including, without limitation, the preparation
and distribution of circulars, payment of distributions and the convening of general
meetings of members of the Company.
6.6
Property Administration Services
6.6.1
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The Manager shall be responsible for entering into (and terminating) such agreements on behalf of
the Company and in the name of the Company as the Manager shall consider appropriate with such
Property Managers as shall be selected by the Manager (it being agreed, for the avoidance of doubt,
that the administration of the properties in the Property Portfolio shall be the Company’s
responsibility), which Property Administrators’ duties in relation to the Company shall be to attend
to the day to day administration of each Property. It shall be provided in any such agreement entered
into between the Company and any proposed administrator that the latter shall administer the
Properties by instituting systems and procedures to:
6.6.1.1.1
collect rental, operating costs and VAT recoveries and account for tenants’ deposits;
6.6.1.1.2
pay all property expenses, including without limitation, stamp duties and relevant
property taxes;
6.6.1.1.3
enforce the landlord’s rights against defaulting tenants;
6.6.1.1.4
insure the buildings on the Properties adequately against all relevant risks provided that
the Manager shall, on an annual basis, submit full details of all proposed insurance and/
or existing insurance to the Company, to the extent possible, prior to effecting or
renewing same;
6.6.1.1.5
inspect all the buildings and Properties with a view to ensuring the continued
maintenance and carrying out of authorised capital expenditures are carried out;
6.6.1.1.6
deal with tenant complaints and requirements;
6.6.1.1.7
inform all tenants of all rules, regulations and notices issued by the Company;
6.6.1.1.8
prepare budgets of income and expenditure for each Property;
6.6.1.1.9
report to the Manager the monthly income and expenditure accounts for each Property;
6.6.1.1.10 deal with lease expiries and renewals and report on and, where possible, fill anticipated
vacancies prior to their occurrence;
6.6.1.1.11 use its/their best endeavours to let vacant space immediately and space which is to
become vacant before leases expire;
6.6.1.1.12 enter into leases in accordance with the letting policies of the Company from time to
time and prepare and execute all necessary documentation;
6.6.1.1.13 enter into contracts with suppliers of services to buildings on the Properties at
competitive rates having due regard to the quality of service provided; and
6.6.1.1.14 maintain the Properties.”
“9 REMUNERATION
The remuneration and expenses payable by the Company to the Manager for and in the course of the services to be
rendered by the Manager in terms of this Agreement shall be the sum of the fees and expenses set out in this clause 9.
9.1
Asset Management Fee
9.1.1
From the Commencement Date until 30 June 2013, a monthly fee of 1/12th of 0,25% (one twelfth
of zero comma two five percent) of the aggregate of the market capitalisation and the borrowings of
the Company. Thereafter, a monthly fee of 1/12th of 0,45% (one twelfth of zero comma four five
percent) of the aggregate of the market capitalisation and the borrowings of the Company (“Asset
Management Fee”).
9.1.2
For the purpose of clause 9.1.1 above:
9.1.2.1 “borrowings” means the aggregate of the Company’ borrowings (excluding the face value
of any debentures forming part of any Linked Units issued by the Company) on the day
in question, as confirmed by the relevant lender/s. In determining the Company’s
borrowings, the Company shall be entitled to take into account any borrowings to be
incurred in respect of an unconditional acquisition, the effective date of which occurs
prior to the date on which the funding is to be advanced; and
9.1.2.2 “market capitalisation” means the market capitalisation of the Company on the JSE at the
close of business on the trading day in question, calculated as the volume weighted average
traded price of a Linked Unit on the JSE for the 30 (thirty) calendar day period prior to
the last trading day in question multiplied by the number of Linked Units in issue at the
relevant time. For the purpose of determining the number of Linked Units in issue, the
Manager shall be entitled to take into account any Linked Units still to be issued pursuant
to an unconditional acquisition, the effective date of which occurs prior to the date on
which such Linked Units are to be issued.
9.1.3
9.3
The Asset Management Fee shall be payable to the Manager monthly in arrears on the
10th (tenth) day of each month, together with the applicable VAT thereon.
Reimbursement of expenses incurred on behalf of the Company
9.3.1
If the Manager incurs any of the Specified Expenses, the Manager shall be entitled to be reimbursed
by the Company for such expenses upon presentation of the relevant proof of payment together with
supporting documentation. Any other expenditure incurred by the Manager without the prior
written consent of the Company, shall be for the account of the Manager.
9.3.2
The Manager shall report to the Company on a quarterly basis detailing the Company expenses
disbursed by the Manager as envisaged in terms of clause 9.3.1.”
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“14 BEE UNDERTAKINGS AND INDEMNITIES BY THE MANAGER
14.1 The Manager hereby undertakes in favour of the Company to procure that, for the duration of this Agreement:
14.1.1 it shall at all relevant times be and remain wholly owned and controlled by Black People; and
14.1.2 none of its shareholders shall:
14.1.2.1 dispose of or enter into any contract to dispose of any shares in the Manager or of any of
the rights attached to shares in the Manager; or
14.1.2.2 enter into any agreement in respect of the votes attached to any of its shares or any of the
other rights attached to its interests as a shareholder; or
14.1.2.3 agree, whether or not subject to any suspensive or resolutive condition, to do any of the
aforegoing; or
14.1.2.4 take any action, or agree to take any action,
which could adversely affect the BEE credentials of the Manager or could adversely affect the
Company’s standing in terms of the DPW Empowerment Policies.
14.2 If any event occurs or any circumstance arises which constitutes a breach or which is reasonably expected to
result in a breach of any of the provisions of clause 14.1, the Manager shall immediately upon it becoming
aware of such event or circumstance give written notice thereof to the Company. For this purpose, as soon as
such event or circumstance comes to the knowledge of any director or senior executive of the Manager, the
Manager shall (unless the contrary is proved) be deemed to have knowledge of the event or circumstance in
question.
14.3 The Company may, without limiting its rights under any other applicable provision, on written notice to the
Manager, require the Manager to provide the Company with such documents and information as it may
reasonably require in order to verify the BEE credentials of the Manager, its shareholders and directors.
14.4 Without prejudice to any rights of the Company arising from any other provision of this Agreement, the
Manager hereby agrees to indemnify and hold the Company harmless from and against any loss, damage or
harm which the Company may suffer (whether directly or indirectly) resulting from, arising out of, or relating
to any breach of or non-compliance by the Manager with any of its obligations in terms of clause 14.1,
including, for the avoidance of doubt, any loss arising as a result of the cancellation or non-renewal of any
leases by the DPW due to such failure, breach or non-compliance by the Manager.”
“16 TERMINATION
16.1 Events of Default
An Event of Default shall have occurred if a Party:
16.1.1 fails to comply with any provision of this Agreement and if such failure is, subject to clause 16.1.2,
not rectified within 10 (ten) Business Days after receipt of a written notice from the other Party,
provided, however, with respect to any matter where rectifying such failure reasonably requires more
than 10 (ten) Business Days, the time period for rectifying shall be extended for up to a total of 30
(thirty) Business Days provided that the Party who failed, promptly commences to rectify the failure
after the effective date of the notice and thereafter pursues such rectification; or
16.1.2 in the case of the Manager, it fails to comply with the provisions of clause 14.1 and if such failure is
not rectified within 60 (sixty) Business Days after receipt of a written notice from the other Company;
16.1.3 enters into a compromise or arrangement with its creditors, otherwise than for a reconstruction,
restructuring or amalgamation without insolvency; or
16.1.4 is placed under judicial management or a liquidation whether provisional or final; or
16.1.5 has a judgement enforced upon or sued out against its property which is not discharged or steps are
not taken to set it aside or the judgement is appealed within 14 (fourteen) business days and such
steps are not diligently pursued to conclusion; or
16.1.6 is unable to pay its debts in the normal course of business; or
16.1.7 ceases or threatens to cease wholly or substantially to carry on its business, otherwise than for a
reconstruction, restructuring or amalgamation, in solvent circumstances; or
16.1.8 is subject to an encumberer taking possession of or a liquidator or trustee is appointed over the whole
or material part of its undertaking, property or assets; or
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16.1.9 is subject to an order or passes a resolution for its winding up or placing under judicial management,
whether provisionally or finally and, otherwise than for the purpose of a reconstruction or
amalgamation, in solvent circumstances previously approved by the other party, which approval shall
not be unreasonably withheld.
16.2 Termination by the Company
16.2.1 The Company shall be entitled, but not be obliged, to terminate this Agreement upon 60 (sixty)
days’ written notice to the Manager
16.2.1.1 upon the occurrence of an Event of Default by the Manager, provided that if the Event of
Default complained of is the Event of Default contemplated in clause 16.1.1, the Company
shall only have the right to cancel if such Event of Default is material, goes to the root of
this Agreement and cannot be remedied by the payment of monetary compensation; and/
or
16.2.1.2 in the event of proven fraud or proven wilful misconduct on the part of the Manager; and/
or
16.2.1.3 upon a sale or alienation or other disposition of more than 50% (fifty percent) in value of
the Properties by the Company to an entity which is not associated with the Company or
the Manager, but subject to the provisions of clause 16.4 below.
16.2.2 In the event that the Linked Unit Holders of the Company in general meeting pass an ordinary
resolution in terms of which they cancel this Agreement other than in accordance with the notice
provisions of clause 5 (as they are entitled to do in terms of the listing Requirements of the JSE), this
Agreement shall terminate on the 60th (sixtieth) day from the date of the passing of such resolution,
provided that if such termination does not arise as a consequence of an Event of Default by the
Manager as contemplated in clause 16.2.1.1, or in the event of proven fraud or proven wilful
misconduct on the part of the Manager as set out in clause 16.2.1.2, such cancellation shall be
subject to the provisions of clause 16.4 below.
16.3 Termination by the Manager
The Manager shall be entitled, but not be obliged, to terminate this Agreement upon 60 (sixty) days’ written
notice to the Company
16.3.1 upon the occurrence of an Event of Default by the Company or in the event of fraud or wilful
misconduct on the part of the Company, provided that if the Event of Default complained is the
Event of Default contemplated in clause 16.1.1, the Manager shall only have the right to terminate
if such Event of Default is material and goes to the root of this Agreement and cannot be remedied
by the payment of monetary compensation; and/or
16.3.2 upon a sale or alienation or other disposition of more than 50% (fifty percent) in value of the
Properties by the Company to an entity which is not associated with the Company or the Manager;
16.4 Consequences of termination by the Company
16.4.1 If the Company:
16.4.1.1 fails to renew this Agreement in terms of clause 5.2 on the expiry of the Initial Period, or
any Renewal Period, as the case may be; or
16.4.1.2 elects to terminate this Agreement (1) pursuant to an event contemplated in clause
16.2.1.3 in circumstances where the acquirer has not agreed to take over the rights and
obligations of the Company in respect of the properties sold, alienated or disposed of in
terms of this Agreement; or (2) in accordance with clause 16.2.2 (the “termination event”),
the Company shall pay to the Manager by way of compensation for the relinquishment of
an income-generating asset, the sum of the:
16.4.1.2.1.1
specified transaction fees; and
16.4.1.2.1.2
net present value of the specified management fee for the agreed
termination period, as determined by the auditors of the Company based
on such assumptions as they deem reasonable in the circumstances, save
that:
16.4.1.2.1.3
they shall be obliged to assume the information contemplated in clause
9.1 as at the date of cancellation or termination as fixed for the duration
of the agreed termination period;
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16.4.1.2.1.4
the applicable period for which the present value calculation shall be
determined shall be the agreed termination period; and
16.4.1.2.1.5
they shall be obliged to use a discount rate equivalent to the Prime Rate.
16.4.2 For purposes of this clause 16.4:
16.4.2.1 “agreed termination period” means:
16.4.2.1.1
in respect of an event contemplated in clause 16.4.1.1, a period of 5 (five)
years;
16.4.2.1.2
in respect of an event contemplated in clause 16.4.1.2, the greater of:
16.4.2.1.2.1
the remaining period of the Initial Period (if applicable);
and
16.4.2.1.2.2
5 (five) years;
16.4.2.2
the “specified transaction fee” means an amount equal to the Transaction
Fee payable to the Manager in terms of clause 9.2 in respect of all Assets
Acquired at any time after the occurrence of the termination event, if any
agreement for the acquisition of such Acquired Assets was concluded by
or on behalf of the Company (whether conditionally or unconditionally)
prior the date of the termination event;
16.4.2.3
the “specified management fee” means the management fee paid to the
Manager in terms of clause 9.1 (the “actual management fee”) for the 6
(six) months immediately preceding the termination event, annualised, or
if this Agreement has endured for less than 12 (twelve) months from the
Commencement Date, then the actual management fee, annualised, after
deducting expenses actually incurred by the Manager in providing the
Asset Management Services for the relevant period.
16.4.3 The specified management fee shall be paid by the Company to the Manager within 10 (ten) Business
Days after the effective date of the termination of this Agreement.
16.4.4 The specified transaction fee shall be paid by the Company to the Manager mutatis mutandis in
accordance with clause 9.2.3, read with the changes required by the context.
16.5 Duties upon termination
On the effective date of a termination, the Manager shall deliver to the Company promptly all of the
Company’ materials, supplies, keys, leases, contracts, other documents, insurance policies, plans, specifications,
permits, licenses, promotional materials and such other accounting papers and records including general
correspondence as pertain to this Agreement. The Manager shall also assign to the Company, without recourse
to the Manager, executed contracts, if any, in the Manager’s name relating to the Asset Management Services,
provided that such contracts are on market related terms and acceptable to the Company. The Manager shall
deliver to the Company a final accounting of the Property Portfolio up to and including the effective date of
the termination within 60 (sixty) days after such effective date of termination. No further services shall be
performed by the Manager under this Agreement after the effective date of a termination or rely on or
represent any association with the Company, except that the Manager shall co operate fully with the Company
to accomplish an orderly transfer of the asset management services and operational management of the
Company to the Company itself or an entity designated by the Company to succeed the Manager.
16.6 Remedies and survival
16.6.1 If either Party terminates this Agreement pursuant to an Event of Default, the party so terminating
may exercise any and all remedies available at law or in terms of this Agreement for breach of
contract, unless and to the extent limited herein.
16.6.2 Upon expiration or any termination :
16.6.2.1 both Parties shall remain liable for all obligations accrued and not fully performed under
this Agreement during the term of this Agreement; and
16.6.2.2 the Manager shall remain entitled to be remunerated until the actual date of expiration or
termination.”
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3. BILLION PROPERTY MANAGEMENT AGREEMENT (BETWEEN BILLION PROPERTY SERVICES AND
REBOSIS)
“3. DURATION OF APPOINTMENT
Billion Property Services’ appointment hereunder shall commence on the Effective Date and shall continue for an
initial period of 12 months during which term it may not be terminated other than in accordance with clause 11
below. After the initial period Billion Property Service’s appointment may be terminated by either party on the
giving of no less than 90 (ninety) days written notice to the other, subject always to the parties’ rights in terms of
clause 11 below.”
“4. GENERAL OBLIGATIONS OF BILLION PROPERTY SERVICES
4.1
For the duration of Billion Property Services appointment, it shall provide the services of a property managing
agent in respect of letting, property maintenance and property accounting, as set out hereunder and shall
perform any further and/or additional services and shall comply with any instructions as given to it by Rebosis
from time to time.
4.2
It is recorded that Billion Property Services will not be responsible for the payment of the monthly expenses
in respect of the Property and that Rebosis will be responsible and make payment of the monthly expenses
incurred in respect of the Property.
4.3
The monthly expenses will be paid within 30 (thirty) days of receipt of the invoice by Rebosis.
4.4
Without limiting the generality thereof, pursuant to clause 4.1, Billion Property Services shall:
4.4.1
carry out to the best of its ability and under the control of and on behalf of Rebosis such duties and
functions as may reasonably be assigned to it from time to time;
4.4.2
obey and observe all the reasonable directions and instructions given to it from time to time by
Rebosis;
4.4.3
exercise the utmost good faith towards Rebosis;
4.4.4
at all times be answerable to Rebosis and shall prepare and submit timeously to Rebosis such reports
relating to its duties, from time to time, as may be reasonably required by Rebosis;
4.4.5
not grant an extension or renewal or enter into any new lease without the prior written consent of
Rebosis;
4.4.6
Billion Property Services will still be responsible to invoice and issue rental statements, to various
tenants. In the rental statements, the bank details for payment of the monthly rental is to be clearly
indicated as the Rebosis account. All rental statements for May 2010 must have a notification of
change of bank account details attached and Billion Property Services must endeavour to get all the
tenants to oblige with the new details.
4.4.7
by not later than the close of business on the 3rd (third) Business Day of each month, remit and
deliver to Rebosis an amount equal to all rentals that were received directly by Billion Property
Services which shall then be paid into Rebosis’ account. Any outstanding rentals not transferred by
the 3rd (third) Business Day of the month, shall be transferred to Rebosis by the close of business on
the 6th (sixth) Business Day of the month. Further to the above, any rentals collected by Billion
Property Services by the 6th (sixth) Business Day of the month shall be paid to Rebosis within 48
(forty eight) hours of receipt thereof by Billion Property Services.
4.4.8
by not later than the 10th (tenth) Business Day of the following month, remit and deliver to Rebosis:
4.4.8.1 a detailed cash flow statement and rent roll for the previous month reflecting all amounts
received and the balance of all other monies received by it; and
4.4.8.2 a consolidated invoice in respect of all operating costs incurred by Billion Property Services
in respect of the Property for that month (“the cashflow statement”) together with a
detailed schedule of any and all payments to be made together with the original supporting
invoices.
4.5
The Scope of Billion Property Services’ duties shall include but not be limited to the following matters:
4.5.1
Letting
Billion Property Services shall attend to:
4.5.1.1. the careful screening of all new tenants and the negotiation of rentals, refurbishment
allowances and other terms and conditions including tenant co-ordination and installation,
with prior written approval by Rebosis of all the terms.
75
4.5.1.2. the negotiation of renewals for existing leases at the date specified in such leases for
renewal, or a reasonable period prior to their expiry if no date is provided for the renewal
of any such lease, with a prior written mandate from Phomella advising on the terms and
conditions of such a renewal;
4.5.1.3 the letting of the parking, the Premises at current open market rentals and in accordance
with the Lease Guidelines and the material terms and conditions of the standard leases
approved by Rebosis (hereinafter “the approved leases”);
4.5.1.4 the drawing up of agreements of lease in accordance with the Lease Guidelines and the
approved leases including obtaining security therefore, stamping thereof and timeously
forwarding same to Rebosis and the tenant for signature;
4.5.1.5 retaining all original lease agreements, other lease documents, including suretyship, and
tenant files in respect of the Property, which lease agreements, documents and tenant files
shall at all times remain the property of Rebosis;
4.5.1.6 the inspection of the premises after the tenant has vacated the premises, before refunding
any deposit; and
4.5.1.7 co-ordinating the marketing of vacant areas, including advertising, liaising with other
agents, ensuring vacant premises are in a good and attractive state of repair and showing
the premises to prospective tenants.
4.5.2
Maintenance
Billion Property Services shall attend to:
4.5.2.1 ensuring that it incurs only reasonable and necessary costs and expenditure in the
fulfilment of its obligations in respect of maintenance and that it obtains approval from
Rebosis in respect of any substantial or material expenses, prior to agreeing to incur any
substantial or material costs or expenses in regards to the maintenance of the Properties
and shall ensure that it fulfils its maintenance obligations in accordance with any and all
maintenance guidelines issued by Rebosis;
4.5.2.2 the control, management, maintenance and repair of the Properties to a high standard,
which is in line with other properties managed by Billion Property Services, and require
tenants to comply with the terms of their leases;
4.5.2.3 endeavouring to procure the continuous supply of all services to the Property, including
but not limited to water, electricity, security, cleaning, sewerage/drainage, gardening
services and general maintenance;
4.5.2.4 the carrying out of regular inspections of the Property (at least once per month) and the
completion of a detailed report in respect of each inspection for submission to Rebosis;
4.5.2.5 the appointment, dismissal or termination of services of any staff or service companies or
independent contractors as required for the Property;
4.5.2.6 the proper supervision of all staff including caretakers, cleaning and security staff and the
keeping of detailed schedules of staff duties and job descriptions;
4.5.2.7 the co-ordination and project management of any development and/or refurbishment that
Billion Property Services is appointed under separate appointment, to oversee on behalf of
Rebosis.
4.5.3
Property Accounting
4.5.3.1 It is recorded that all the tenant’s deposits have been paid to Rebosis and are held by
Rebosis.
4.5.3.2 Billion Property Services shall:
4.5.3.2.1
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use its best endeavours to arrange for the deposit of funds due to Rebosis
to Billion Property Services’ Trust Account or, alternatively, ensuring
payment is made directly to Rebosis’ bank account if so required, by the
parties paying such funds;
4.5.3.2.2
where applicable attend to the assessment, apportionment and recovery
from tenants of charges or increases in charges such as assessment rates
and taxes and other levies, water, electricity etc, or expenses which, if they
increase, are recoverable from the tenants;
4.5.3.2.3
attend to sending each tenant a rental statement on a monthly basis
indicating the rent and other charges due by the tenant, by no later than
the 15th of each month;
4.5.3.2.4
attend to the collection of rent and other income (including Operating
Expenses) due by tenants, the direct payment thereof into Rebosis’ bank
account and the prompt following up of late payments;
4.5.3.2.5
attend to the preparation of detailed monthly property management
reports as set out hereunder and more fully in Annexure “C” hereto, and
as amended by Rebosis from time to time;
4.5.3.2.6
attend to the preparation of a detailed income and expenditure statement
for the Property Portfolio reflecting the actual and budgeted amounts and
the variances for both the current month and for the year to date;
4.5.3.2.7
attend to the provision of comprehensive reports on the letting of the
Property, arrears, vacancies, repairs and maintenance as and when
appropriate in the form and manner required by Rebosis;
4.5.3.2.8
shall attend to in the event of vacancies arising by reason of a tenant
vacating without notification or notification of non-renewal of the
agreement of lease, then in such event Billion Property Services shall
notify Rebosis immediately and take remedial steps to limit damage and
loss of income.
4.5.3.2.9
shall attend to the maintenance of full and comprehensive records and
books of account for Rebosis reflecting all amounts received and expended
in the form and manner required by Rebosis, which records shall be:
4.5.3.2.9.1
available at all reasonable times for inspection by Rebosis
or its appointed agents for this purpose;
4.5.3.2.9.2
available for annual audit by the auditors of Rebosis;
4.5.3.2.9.3
delivered to Rebosis on the date on which this Agreement
terminates;
4.5.3.2.9.4
the general administration of the affairs of Rebosis insofar
as it relates to the Property; and
4.5.3.2.9.5
the provision of administration reports relating to the
Property.
4.6
Rebosis shall provide Billion Property Services with a list of daily receipts and arrears by the 3rd and 6th days
of each month in order to enable RPW to fulfil its obligations under clause 4.4.7, 4.4.8 and 4.5.3.2.4 above.
4.7
Each party hereby indemnifies the other and holds it harmless against all and any claims which may arise as
a result of claims or actions being instituted by any third party, to cover losses (including costs and expenses)
or to claim damages from such party, ownership or management of the property, and such loss or damage did
not arise as a result of gross negligence or fraud on the part of the other party.”
“6. REMUNERATION
6.1
As remuneration for the provision of the management and administration services, Rebosis will pay Billion
Property Services an amount as set out in Annexure “B” hereto, as a percentage of the gross revenue collected
from or paid by tenants (including VAT) directly to Rebosis or Billion Property Services, which amount will
be set out in the consolidated expenses report produced by Billion Property Services and submitted to Rebosis
in accordance with clause 4.4.8.2, and such amount shall be paid by Rebosis to Billion Property Services in
arrears by the 7th (seventh) days of the following month, provided that an invoice is received by Rebosis on
the last day of the month.
6.2
In addition to the rental commission referred to in clause 7.1 above, in the event that Billion Property Services
is the effective cause of new tenants taking leases of the Premises in the Properties, Billion Property Services
will be entitled to commission as set out in Annexure “B” hereto, which commission shall be payable by
Rebosis to Billion Property Services on the commencement date of the relevant lease.
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6.3
In addition to the commission referred to in clause 7.1 and 7.2 above, in the event that Billion Property
Services is the effective cause of existing tenants renewing their leases then Billion Property Services will be
entitled to a commission as set out in Annexure “B” hereto, which commission shall be payable by Rebosis to
Billion Property Services on the commencement date of the relevant lease.”
“10.BREACH AND TERMINATION
10.1 If any of the Parties commits a breach of this Agreement (“the Defaulting Party”), and/or fails to comply with
any of the provisions hereof, then the other Party against whom the breach is committed (“the Innocent
Party”) shall be entitled to give the Defaulting Party 10 (ten) Business Days notice in writing to remedy such
breach and/or failure and if the Defaulting Party fails to comply with such notice, then the Innocent Party
shall forthwith be entitled, but not obliged, without prejudice to any other rights or remedies which the
Innocent Party may have in law, including the right to claim damages:
10.1.1 to cancel this Agreement; or
10.1.2 to claim immediate performance and/or payment of all the obligations of the Defaulting Party in
terms hereof.
10.2 Any dispute in this regard shall be determined in accordance with the provisions of clause 11.
10.3 Any Party will be entitled to cancel this Agreement by written notice to the other Parties in the event that:
10.3.1 a Party commits an act of insolvency or its placed under provisional or final liquidation or judicial
management, or if any Party makes an assignment for the benefit of its creditors or fails to satisfy or
take steps to have set aside any judgement taken against it within 7 (seven) Business Days after such
judgement has come to its notice;
10.3.2 the other Party repeatedly breaches any of the terms of this Agreement in such a manner as to justify
the other holding that its conduct is inconsistent with that Party’s intention or ability to carry out
the terms of this Agreement.
10.4 The cancellation of this Agreement in terms of this clause 10 will not affect any rights which may have
accrued to any Party before the date of cancellation and will further not affect any rights which such party is
entitled to by operation of the law or such rights which specifically or by their nature survive the cancellation
of this Agreement.
10.5 If at any time Rebosis maintains that the performance of Billion Property Services in respect of this Agreement
is poor in comparison with similar service providers:
10.5.1 Rebosis may give Billion Property Services written notice of its dissatisfaction with the services
provided by it under this Agreement, including details of Billion Property Service’s poor performance,
compared to these services received by similar companies in the market managed by similar property
managers;
10.5.2 within 10 (ten) days of receipt of such written notice the Parties will meet and discuss the matter and
endeavour to reach agreement;
10.5.3 if Billion Property Services is able to satisfy Rebosis that it has no grounds for dissatisfaction then
that will be the end of the matter and same will be put in writing by the parties;
10.5.4 should Billion Property Services accept that Rebosis has cause for dissatisfaction and that it is
responsible for such dissatisfaction, then Billion Property Services will be given a reasonable period
not exceeding 30 (thirty) days from the date of such acceptance in which to remove the cause of
Rebosis’ dissatisfaction. If Billion Property Services fails to improve performance during this period,
Rebosis will be entitled to cancel this Agreement by giving 14 (fourteen) days’ written notice to
Billion Property Services. If this Agreement is cancelled by Rebosis in this manner, neither Party shall
have any claim against the other Party arising out of such cancellation.”
ANNEXURE B
PROPERTY ADMINISTRATION REMUNERATION PAYABLE TO BILLION PROPERTY SERVICES IN
TERMS OF CLAUSE 7
“1.
78
illion Property Services shall be entitled to remuneration referred to in clause 6.1 for the property
B
administration services rendered by it in terms of this Agreement at the following rate of commission, plus
VAT thereon: 2,5% (two comma five percent) of all collectable income received, excluding VAT collections,
deposits or guarantees and amounts collected by debt collection agents but including appropriated deposits
for the month in question.
2. In addition to the above commission, Billion Property Services will be entitled to commission on the negotiations
of any new lettings at 50% (fifty percent) of the rates set out hereunder, or at 25% (twenty-five percent) of the rates
set out hereunder for lease renewals, provided that no commission will be earned in the event that these negotiations
are undertaken or introductions are made by an outside party.
Commissions Rates
2.1
Monthly leases
One month’s rental, provided that the full commission is to be refunded if the tenancy endures for less than
6 (six) months.
2.2
Lease agreements
5% (five percent) on the first 2 (two) years rental, 2,5% (two comma five percent) on the next 3 (three) years
rental, 1,5% (one comma five percent) on the next 3 (three) years rental and 1% (one percent) on the balance,
provided that the commission is to be refunded pro rata if the tenancy is terminated prior to the agreed
duration of the lease agreement.
All renewals to be negotiated by the Landlord unless otherwise indicated and agreed to in writing by the
landlord. Billion Property Services shall not be entitled to any commission on renewals done by the Landlord.”
ADDENDUM TO THE BILLION PROPERTY MANAGEMENT AGREEMENT
“2.2 Notwithstanding anything to the contrary in the principal agreement, the parties hereby agree as follows:
2.2.2
the property administration services to be rendered by Billion Property Services in respect of the
Victoria Mxenge building are as recorded in the principal agreement;
2.2.3
in consideration for Billion Property Services providing the property administration services in
respect of the Victoria Mxenge building and assuming the obligations under the facilities management
agreement as detailed in clause 2.2.1 above, Rebosis shall pay to Billion Property Services a total
monthly property administration services and facility management services fee of R2 270 000 (the
“Victoria Mxenge fee”);
2.2.4
the Victoria Mxenge fee shall escalate annually on the first day of June each year by 7%, the first such
escalation to be on 1 April 2012;
2.2.5
the remuneration referred to in clause 6 of the principal agreement as read with Annexure B thereto
shall not apply in respect of the Victoria Mxenge building, the remuneration to be as set out in this
addendum only”
BROKING COMMISSIONS PAYABLE TO BILLION PROPERTY SERVICES
The board of Rebosis has approved the payment of broking commissions to Billion Property Services by vendors of
properties to Rebosis, where no other broker is involved on the following basis: Broking commissions are paid in
accordance with the guidelines set by the South African Property Owners Association.”
4. BILLION PROPERTY MANAGEMENT AGREEMENT (BETWEEN BILLION PROPERTY SERVICES AND
ASCENSION)
“1. INTERPRETATION
1.1.4
“Effective Date” means the 1 March 2015;
1.1.8
“Parties” means the parties for this Agreement, namely Ascension and BPS;
1.1.12 “Property Manager” means BPS;
“WHEREAS
A.
Ascension is desirous of engaging BPS to administer the Property;
B.
BPS is desirous of conducting itself as the property administration agent on behalf of Ascension; and
C.
The Parties are desirous of recording the terms of the property management agreement as set out hereunder.
79
2. APPOINTMENT
Ascension hereby appoints BPS to administer and manage the Property subject to the terms and conditions set out
hereunder from the Effective Date.
3. DURATION OF APPOINTMENT
BPS appointment hereunder shall commence on the Effective Date and shall continue for an initial period of
12 months during which term it may not be terminated other than in accordance with clause 10 below. After the
initial period BPS appointment may be terminated by either Party on the giving of no less than 90 (ninety) days
written notice to other, subject always to the Parties’ rights in terms of clause 10 below.
4. GENERAL OBLIGATIONS OF BPS
4.1
For the duration of BPS’s appointment, it shall provide the services of a property managing agent in respect
of letting, property maintenance and Property Accounting, as set out hereunder and shall perform any further
and/or additional services and shall comply with any instructions as given to it by Ascension from time to
time.
4.2
It is recorded that BPS will be responsible for the payment of the monthly expenses in respect of the Property.
4.3
The monthly expenses will be paid within 30 (thirty) days of receipt of the invoice by Ascension and in
accordance with the payment terms agreed with suppliers.
4.4
Without limiting the generality thereof, pursuant to clause 4.1, BPS shall:
4.4.1
carry out to the best of its ability and under the control and on behalf of Ascension such duties and
functions as may reasonably be assigned to it from time to time;
4.4.2
obey and observe all the reasonable directions and instructions given to it by Ascension from time to
time;
4.4.3
exercise the utmost good faith towards Ascension;
4.4.4
at all times be answerable to Ascension and shall prepare and submit timeously to Ascension such
reports relating to its duties, from time to time, as may be reasonably required by Ascension;
4.4.5
Not grant an extension or renewal or enter into any new lease without the prior written consent of
Ascension;
4.4.6
BPS will still be responsible to invoice and issue rental statements to various tenants. In the rental
statements, the bank details for payment of the monthly rental are to be clearly indicated as the
Ascension account. All rental statements for 1 March 2015 must have a notification of change of
bank account details attached and BPS must endeavour to get all the tenants to oblige with the new
details.
4.4.7
By not later than the close of business on the 3rd (third) Business Day of each month, remit and
deliver to Ascension an amount equal to all rentals that were received directly by BPS which shall
then be paid into Ascension’s account after deducting all budgeted expenses for the month. Any
outstanding rentals not transferred by the third day of the month, shall be transferred to Ascension
by the close of business on the 6th (sixth) Business Day of the month. Further to the above, any
rentals collected by BPS after the 6th (sixth) Business Day of the month shall be paid to Ascension
within 48 (forty eight) hours of receipt thereof by BPS.
4.4.8
By not later than the 10th (tenth) Business Day of the following month, remit:
4.4.8.1 a detailed cash flow statement and rent roll for the previous month reflecting all amounts
received and the balance of all other monies received by it; and
4.4.8.2 a consolidated invoice in respect of all operating costs incurred by BPS in respect of the
Property for that month (“the cashflow statement”) together with a detailed schedule of
any and all payments to be made together with the original supporting invoices.
4.5
The scope of BPS’s duties shall include but not be limited to the following matters:
4.5.1
Letting
BPS shall attend to:
4.5.1.1 The careful screening of all new tenants and the negotiation of rentals, refurbishment
allowances and other terms and conditions including tenant co-ordination and
installation, with prior written approval by Ascension of all the terms;
80
4.5.1.2 the negotiation of renewals for existing leases as the date specified in such leases for
renewal, or a reasonable period prior to their expiry if no date is provided for the renewal
of any such lease, with a prior written mandate from Ascension advising on the terms and
conditions of such a renewal;
4.5.1.3 the letting of the parking, the Premises at current open market rentals and in accordance
with the Lease Guidelines and the material terms and conditions of the standard lease
approved by Ascension (hereinafter “the approved leases”);
4.5.1.4 the drawing up of agreements of lease in accordance with the Lease Guidelines and the
approved leases including obtaining security therefore, stamping thereof and timeously
forwarding same to Ascension and the tenant for signature;
4.5.1.5 retaining all original lease agreements, other lease documents, including suretyship, and
tenant files in respect of the Property, which lease agreements, documents and tenant files
shall at all times remain the property of Ascension;
4.5.1.6 the inspection of the premises after the tenant has vacated the premises, before refunding
any deposit; and
4.5.1.7 co-ordinating the marketing of vacant areas, including advertising, liaising with other
agents, ensuring vacant premises are in a good and attractive state of repair and showing
the premises to prospective tenants.
4.5.2
Maintenance
BPS shall attend to:
4.5.2.1 ensuring that it incurs only reasonable and necessary costs and expenditure in the
fulfilment of its obligations in respect of maintenance and that it obtains approval from
Ascension in respect of any substantial or material expenses, prior to agreeing to incur any
substantial or material costs or expenses in regards to the maintenance of the Properties
and shall ensure that it fulfils its maintenance guidelines issued by Ascension;
4.5.2.2 the control, management, maintenance and repair of the Properties to a high standard,
which is in line with other properties managed by BPS, and require tenants to comply
with the terms of their leases;
4.5.2.3 endeavouring to procure the continuous supply of all services to the Property, including
but not limited to water, electricity, security, cleaning, sewerage/drainage, gardening
services and general maintenance;
4.5.2.4 the carrying out of regular inspections of the Property (at least once per month) and the
completion of a detailed report in respect of each inspection for submission to Ascension;
4.5.2.5 the appointment, dismissal or termination of services of any staff, service companies or
independent contractors as required for the Property;
4.5.2.6 the proper supervision of all staff including caretakers, cleaning and security staff and the
keeping of detailed schedules of staff duties and job descriptions;
4.5.2.7 the co-ordination and project management of any development and/or Refurbishment
that BPS is appointed under separate appointment, to oversee on behalf of Ascension;”
“6. REMUNERATION
6.1
As remuneration for the provision of the management and administration services, Ascension will pay BPS
an amount as set out in Annexure “B” hereto, as a percentage of the gross revenue collected from or paid by
tenants (including Vat) directly to Ascension or BPS, which will be set out in the consolidated expenses report
produced by BPS and submitted to Ascension in accordance with clause 4.4.8.2, and such amount shall be
paid by Ascension to BPS in arrears by the 7th (seventh) day of the following month, provided that an invoice
is received by Ascension on the last day of the month.
6.2
In addition to the remuneration referred to in clause 6.1 above, in the event that BPS is the effective cause of
new tenants taking leases of the Premises in the Properties, BPS will be entitled to commission as set out in
Annexure “B” hereto, which commission shall be payable by Ascension to BPS on the commencement date
of the relevant lease.
81
6.3
In addition to the remuneration referred to in clause 6.1 and 6.2 above, in the event that BPS is the effective
cause of existing tenants renewing their leases then BPS will be entitled to a commission as set out in Annexure
“B” hereto, which commission shall be payable by Ascension to BPS on the commencement date of the
relevant lease.”
“ANNEXURE “B”
PROPERTY ADMINISTRATION REMUNERATION PAYABLE TO BPS IN TERMS OF CLAUSE 7
1. BPS shall be entitled to remuneration referred to in clause 6.1 for the property administration services rendered by
it in terms of this Agreement at the following rate of commission, plus VAT thereon: 2% (two percent) of all
collectable income received, including VAT collections and amounts collected by debt collection agents but excluding
appropriated deposits for the month in question.
2. In addition to the above commission, BPS will be entitled to commission on the negotiations of any new letting at
50% (fifty percent) of the rates set out hereunder, or at 25% (twenty five percent) of the rates set out hereunder for
lease renewals, provided that no commission will be earned in the event that these negotiations are undertaken or
introductions are made by an outside party.
Commissions Rates
2.1
Monthly leases
One month’s rental, provided that the full commission is to be refunded if the tenancy endures for less than 6 (six)
months.
2.2
Lease Agreements
5% (five percent) on the first 2 (two) years rental, 2,5% (two comma five percent) on the next 3 (three) years
rental, 1,5% (one comma five percent) on the next 3 (three) years and 1% (one percent) on the balance, provided
that the commission is to be refunded pro rata if the tenancy is terminated prior to the agreed duration of the lease
agreement.
All Government renewals to be negotiated by the landlord unless otherwise indicated and agreed to in writing by
the landlord. BPS shall not be entitled to any commission on renewals done by the Landlord.”
5. BROLL PROPERTY MANAGEMENT AGREEMENT
“1. INTERPRETATION AND PRELIMINARY
In the interpretation of this AGREEMENT, unless the context otherwise requires:
1.1
the following words and expressions shall bear the following meanings:
1.1.1
“AGREEMENT” means this property management agreement, including all annexures and/or
schedules annexed hereto from time to time;
1.1.2
“CLIENT” means Ascension Properties Ltd registration number 2006/026141/06, of 5th Floor, 14
Long Street, Cape Town;
1.1.10 “MANAGER” means BROLL PROPERTY GROUP (PROPRIETARY) LIMITED registration
number 2008/027519/07, of Broll House, 27 Fricker Road, Illovo, Johannesburg, 2196
1.1.13 “PORTFOLIO”, “PROPERTY PORTFOLIO”, “PROPERTIES” means, individually and
collectively the properties currently, and in the future, comprising the CLIENT’s portfolio,
alternatively under the CLIENT’s control from time to time;”
“2. APPOINTMENT
82
2.1
The CLIENT hereby appoints the MANAGER as its agent to render the SERVICES by, without limitation,
managing the PORTFOLIO in accordance with the provisions of this AGREEMENT and the MANAGER
hereby accepts such appointment.
2.2
The CLIENT hereby authorises the MANAGER to put into effect and administer all aspects of this
AGREEMENT, on behalf of the CLIENT.”
“3. DURATION
This AGREEMENT:
3.1
shall commence on the commencement date;
3.2
shall remain in force for 3 (three) years after which it will continue until terminated by either party giving not
less than 3 (three) months notice of termination.”
“4. DUTIES OF THE MANAGER
The MANAGER undertakes that during the currency of this AGREEMENT it will undertake the following
functions as part of the SERVICES on behalf of the CLIENT in accordance with the provisions of the AGREEMENT.
4.1
GENERAL MAINTENANCE
The MANAGER shall:
4.2
4.1.1
attend to the control, management, maintenance and repair of the PROPERTIES, subject to the
CLIENT’s instructions;
4.1.2
maintain the PROPERTIES in a good, secure, clean and tidy condition;
4.1.3
ensure the continuous supply of all services to the PROPERTIES, including but not limited to:
water, electricity, security services, and general maintenance;
4.1.4
perform regular inspections of the PROPERTIES;
4.1.5
appoint and properly supervise any service companies as and when required;
4.1.6
employ and properly supervise the EMPLOYEES;
4.1.7
ensure that detailed schedules of EMPLOYEES and their duties are maintained;
4.1.8
where applicable, pay all rates, taxes, electricity, water, sewerage, refuse removal and other charges
relating to the said building and levies payable on rentals collected on behalf of the CLIENT
immediately same become due for payment which sums shall be reimbursed by the CLIENT to the
MANAGER in accordance with the provisions of Clause 9 here below;
4.1.9
draw up maintenance plans for the PROPERTIES, in detail for the immediate future year including
anticipated action programs and cost schedules. Where necessary, consultation with professional
consultants may be engaged to assist, provided prior written approval has been received from the
CLIENT, and shall be at the cost of the relevant building.
LETTING
The MANAGER shall:
4.2.1
take all reasonable steps to let vacant space in the building as soon as this becomes available;
4.2.2
carefully screen all new Tenants and negotiate rentals, refurbishing allowances, terms and conditions,
including the negotiation of rentals in the existing Leases at current market rentals at the dates
specified in such Leases or at their expiry all in terms of tenant mix, income budgets and letting
strategy as prepared by the MANAGER and approved by the CLIENT from time to time. Prior
approval of the terms and conditions and rentals will be obtained from the CLIENT;
4.2.3
draw up Agreements of Lease, including any additions, alterations and variations as required from
time to time, in a format approved from time to time by the CLIENT, and attend to the stamping
thereof, for which services the MANAGER shall be entitled to charge a fee to the Tenant in an
amount agreed from time to time by the CLIENT;
4.2.4
inspect the premises after a tenant has vacated, and recover any required restoration costs before
refunding deposits;
4.2.5
liaise with Tenants on all matters concerning the Landlord/Tenant relationship;
4.2.6
co-ordinate the marketing of vacant areas which includes advertising, liaising with other agents,
ensuring vacant premises are in good and attractive state of repair and show the premises to
prospective Tenants.
83
4.3
FINANCIAL AND ACCOUNTING
The MANAGER shall:
4.3.1
collect rent and other charges, including operating expenses, due by the Tenants and promptly follow
up late payments;
4.3.2
render a detailed monthly report, income statement, balance sheet and rent roll to the CLIENT;
4.3.3
send every Tenant a statement each month indicating the rent, operating costs and other charges due
by him;
4.3.4
prepare and deliver to the CLIENT, 6 weeks in advance of the commencement of each financial
year, fully motivated budgets relating to all property income and expenditure for the PROPERTIES
for the ensuing financial year. The budgets, once agreed between the CLIENT and the MANAGER,
shall set the financial performance standards for the forecast period. Parties undertake to use their
best endeavours to secure the approval of the budgets prior to the commencement of the financial
year;
4.3.5
maintain full records in connection with the administration of the PROPERTIES which records
shall be:
4.3.5.1 available at all reasonable times for inspection by the CLIENT or appointed agent for this
purpose;
4.3.5.2 delivered to the CLIENT within a reasonable time after this Agreement terminates;
4.3.5.3 audited annually by the auditors from time to time of the CLIENT, the cost of which
shall be borne by the CLIENT;
4.3.6
make payments to the CLIENT, the frequency of which to be advised by the CLIENT, and agreed
to in writing, such net amount as may then be available after deductions and provisions;
4.3.7
deposit all net rentals and other monies received into a Trust account to be specified by the
MANAGER;
4.3.8
effect payments of expenditures as foreseen in Clause 9 below;
4.3.9
retain copies of all Lease Agreements, other Lease documents and Tenant files in respect of the
building. Such Lease Agreements, documents and Tenant files shall at all times be and remain the
property of the CLIENT and all original Lease Agreements shall be kept in safe custody by the
MANAGER;
4.3.10 attend monthly management CLIENT meetings called by the CLIENT from time to time;”
“8. MANAGER’S REMUNERATION
For its various services hereunder the MANAGER shall be entitled to be paid and recover from monies collected by
it on the CLIENT’s behalf or otherwise:
8.1
Administration Fee
A 2% (two percent) fee (excluding Vat) will be payable, reflected as a percentage of gross monthly collections
(including VAT), together with other sums recovered by it from tenants in terms of lease agreements.
This fee shall not include tenant deposits, the proceeds of insurance claims or amounts recovered or collected
from any source other than tenants of the building and monies recovered from tenants for tenant installation.
This fee will be exclusive of all on-site staff costs as their salaries, cost and expenses will be debited directly to
the CLIENT in respect of the particular building concerned as provided for in Clause 4.4.
8.2
Leasing Fee
8.2.1
A fee in respect of each lease negotiated with new tenants shall be payable by the CLIENT to the
MANAGER as follows::
8.2.1.1 in an amount equal to the fee payable to any external broker, where an external broker has
negotiated such lease provided that the MANAGER shall ensure that any such fee does
not exceed the fees chargeable in terms of the recommended tariff of the South African
Property Owner’s Association (SAPOA) plus VAT, unless the CLIENT’s written consent
has been obtained to pay a higher fee; and
8.2.1.2 in an amount equal to 100% (one hundred percent) of the recommended tariff as
previously provided for by SAPOA, plus VAT, from time to time, where the MANAGER
has negotiated such lease.
84
8.3
8.2.2
A fee in an amount equal to 50% (fifty percent) of the recommended tariff as previously provided
for by SAPOA, in respect of lease renewals or further leases negotiated with existing tenants, will be
payable by the CLIENT to the MANAGER, plus VAT.
8.2.3
In the event of any lease in respect of which commission has been paid in terms of this clause being
cancelled within 3 (three) months of commencement of the lease agreement, where proven that a
diligent, thorough and comprehensive credit check and reasonable investigation into the experience
and suitability of the prospective tenant has not been done, a proportion of the fee paid in respect of
such lease will be refunded by the MANAGER to the CLIENT, calculated pro rata to the unexpired
portion of the lease period, to the extent that such fee is recoverable from the external or internal
company related broker, as the case may be.
8.2.4
It is acknowledged by the MANAGER that only the CLIENT will deal with Government tenants,
unless the MANAGER is requested to assist, in which event commission will be payable to the
MANAGER as provided above.
Refurbishment Fees
The CLIENT shall pay to the MANAGER in respect of any approved refurbishment of buildings (not minor
maintenance work but a material and substantial refurbishment) a reasonable consideration based on the
work done and time spent by the MANAGER in respect of such refurbishment. Should the parties be unable
to agree on such reasonable consideration, such consideration shall be determined by an independent person
agreed upon by the parties or failing the agreement as appointed in terms of Clause 13.
8.4
Additional Fees
In addition to the fees referred to above other “ad hoc” fees shall be paid by the CLIENT to the MANAGER
for any additional services such as provision of major capital additions, sales of properties or similar services,
provided that such fees are agreed to in writing by the parties. It is specifically recorded that the MANAGER
will be entitled to charge fees at the recommended tariff of SAPOA in respect of the sale of properties or of
property owning companies where such sales have been negotiated directly by the MANAGER and the
MANAGER is the effective cause of the sale.”
6. JHI PROPERTY MANAGEMENT AGREEMENT
“1.1.1 “the Owner” means Ascension Properties Ltd, Registration Number (2006/026141/06);”
“1.1.4 “the Manager means JHI Properties (Proprietary) Limited trading as JHI, Registration Number
(2007/021131/07), being the company appointed to manage the Property;”
“2. THE MANAGER’S APPOINTMENT
2.1
The Owner hereby appoints the Manager, which hereby agrees to the appointment, to professionally,
effectively, and efficiently manage those aspects of the management of the Property as set out in this Agreement.
2.2
The Agreement shall be for a period of 1 (one) year from the Commencement Date and continue thereafter
for an indefinite period terminable on 3 (three) calendar months written notice by either party.
2.3
Neither party shall be entitled to cede, assign or delegate any of its rights or obligations in terms of this
Agreement to any third party without the prior written consent of the other party, which consent may be not
unreasonably withheld.”
“3. THE MANAGER’S DUTIES
3.1
The Manager undertakes that during the currency of this Agreement it will undertake the functions in
connection with the management of the Property on behalf of the Owner as set out in Annexure “A”.
3.2
the Owner hereby authorizes the Manager, for the duration of this Agreement to represent the Owner in
relation to the management of the Property in the manner and on the basis contemplated in this Agreement
and Annexure “A”.
3.3
The Manager shall, where applicable, give preference to the Owner’s nominees in the appointment of
subcontractors for the purposes of maintenance, renovations and upgrades, whether or not such expenditure
was budgeted for.
3.4
All expenditures for renovations and upgrades not included in the annual budget, shall require the prior
written authorization of the Owner.
3.5
Notwithstanding anything to the contrary contained in this Agreement, the Manager shall not be obliged to
disburse any amount on behalf of the Owner unless the Owner has, prior to the making of such disbursement
by the Manager, provided funds to the Manager to cover such disbursements.”
85
“6. REMUNERATION
6.1
For the purpose of this clause, unless the context indicates otherwise, the Manager shall be entitled, as
remuneration for the services to be rendered by it in terms of this Agreement for the period of its appointment
as follows:
6.1.1
In respect to management duties – 2% (Two percent) (plus VAT) of total monthly rent roll and costs
actually received including VAT.
6.1.2
to a commission, in respect of leases concluded with new tenants procured by the Manager in respect
of the Property or where an existing tenant (i.e. a tenant who already occupies premises situated at
the Property) hires additional premises at the Property, equal to the aggregate of the following items
(hereinafter referred to as “the Market Commission Tariff ”):
6.1.2.1 5% (five percent) on the first 2 (two) years’ gross rental;
6.1.2.2. 2.5% (two and a half percent) on the next 3 (three) years’ gross rental;
6.1.2.3. 1.5% (one and a half percent) on the next 3 (three) years’ gross rental;
6.1.2.4 1% (one percent) on the balance.
(“gross rental” includes basic rental, parking rental, operating costs, marketing fund and rates and
taxes)
86
6.1.3
to a fee of 50% (fifty percent) of the Market Commission Tariff for each lease renewal (current
leases);
6.1.4
to a fee of 100% (hundred percent) of the first month’s gross rental in a monthly tenancy;
6.1.5
to a fee equal to costs and expenses incurred by the Manager to conduct credit verification/s of
potential and existing tenants and/or surety(ies) from time to time with recognized and/or registered
credit bureaus;
6.1.6
to a fee for administration in drafting leases and mandates to re-let.
6.2
The remuneration shall be deducted from income received by the Manager from the administration of the
building on the 18th (eighteenth) day of each month.
6.3
The remuneration for any other services to be provided by the Manager at the request of the Owner shall be
negotiated and reduced to writing prior to the provision of such service.
6.4
Should the balance available in the Trust account be insufficient to pay the remuneration as set out in clauses
6.1, 6.2 and 6.3 above, the Owner shall pay such remuneration within 48 (forty eight) hours of receiving
written notice to such effect from the Manager. Should the Owner fail to pay the remuneration as aforesaid,
the Manager will be entitled to charge interest on the outstanding amount at a rate per annum equal to the
prime overdraft rate per annum charged from time to time by the Manager’s bankers plus 2% (two percent).”
87
1.
Term Facility
Nedbank
Nedbank
Nedbank
Nedbank
Nedbank
Nedbank
Nedbank4
Nedbank4
1.
2.
3.
4.
5.
6.
7.
8.
9.
Fund acquisition
Fund acquisition
Fund acquisition
Term Facility
Term Facility
Term Facility
Term Facility
Nedbank4
10. Nedbank
Fund acquisition
Fund acquisition
Fund acquisition
Fund acquisition
Fund acquisition
Fund acquisition
Fund acquisition
Origination
Term Facility
Term Facility
Term Facility
Term Facility
Term Facility
Description
No Lender
86 326
740 000
72 500
48 185
200 000
24 917
247 500
175 000
301 700
201 100
Capital
amount
outstanding
(R’000)
1-month Jibar
plus 1.9%
1-monht Jibar
plus 1.9%
8.80%
1-monht Jibar
plus 1.9%
9.11%
1-month Jibar
plus 1.6%
3-month Jibar
plus 1.6%
3-month Jibar
plus 1.74%
1-month Jibar
plus 1.8%
3-month Jibar
plus 1.85%
Interest rate
Set out below are the material borrowings of the Rebosis group as at the last practical date.
MATERIAL BORROWINGS OF REBOSIS
MATERIAL BORROWINGS
Floating
Floating
Fixed
Floating
Fixed
Floating
Floating
Floating
Floating
Floating
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Capital
repayments
(quarterly/
Facility
annually)
Secured by mortgage bonds
over investment properties
Secured by mortgage bonds
over investment properties
Secured by mortgage bonds
over investment properties
Secured by mortgage bonds
over investment properties
Secured by mortgage bonds
over investment properties
Secured by mortgage bonds
over investment properties
Secured by mortgage bonds
over investment properties
Secured by mortgage bonds
over investment properties
Secured by mortgage bonds
over investment properties
Secured by mortgage bonds
over investment properties
Security
17 May 2016
31 August 2016
13 March 2016
13 March 2016
17 May 2016
3 August 2016
23 May 2017
17 July 2017
28 February 2019
23 May 2019
Maturity Date
Annexure 9
88
Fund acquisition
Fund acquisition
Fund acquisition
Term Facility
Term Facility
Term Facility
11. Rand Merchant
Bank
12. Rand Merchant
Bank
13. Rand Merchant
Bank4
642 824
86 743
175 000
3-month Jibar
plus 1.25%
1-month Jibar
plus 1.9%
3-month Jibar
plus 1.75%
Interest rate
Fund
acquisition
Fund
acquisition
Standard Bank2, Term Facility
Standard Bank2, Term Facility
2.
3.
3
3
Fund
acquisition
Term Facility
Investec Bank
Limited
1.
Origination
Description
No Lender
160 000
393 000
492 000
Capital
amount
outstanding
(R’000)
Prime
– 1.50%
3‑month
JIBAR
+1.80%
Prime
– 0.75%
Interest
rate
Floating
Floating
Floating
Interest only facility with capital
repayment on the capital
repayment date
Interest only facility with capital
repayment on the capital
repayment date
Interest only facility with capital
repayment on the capital
repayment date
Security
Secured by mortgage bonds
over investment properties
Secured by mortgage bonds
over investment properties
Secured by mortgage bonds
over investment properties
Secured by bonds over
investment property valued at
R1 051 billion
Secured by bonds over
investment property valued at
R1 051 billion
Secured by bonds over
investment property valued at
R1 514 billion
Security
Monthly
Monthly
Monthly
Capital
repayments
(quarterly/
Facility
annually)
Capital repayments (quarterly/
annually)
Set out below are the material borrowings of the Ascension group as at 31 March 2015.
2. MATERIAL BORROWINGS OF ASCENSION
4. These facilities are to be refinanced. Refinancing opportunities are in the process of being considered.
3. The borrowings numbered 1 to 13 are secured by mortgage bonds over investment properties valued at R6 856 billion.
2. The Rand Merchant Bank facilities numbered 11 to 13 bear interest at an average rate of 7.51% per annum.
1. The Nedbank facilities numbered 1 to 10 bear interest at an average rate of 8.01% per annum.
Notes
Origination
Description
No Lender
Capital
amount
outstanding
(R’000)
31 August 2017
31 August 2017
31 July 2018
Maturity Date
31 May 2015
17 May 2016
17 July 2017
Maturity Date
89
Fund
acquisition
Fund
acquisition
Fund
acquisition
Fund
acquisition
Fund
acquisition
Fund
acquisition
Fund
acquisition
Term Facility
Term Facility
Term Facility
Term Facility
Term Facility
Term Facility
Term Facility
Nedbank1, 3
Nedbank 1, 3
Nedbank1, 3
Nedbank1, 3
Nedbank1, 3
Nedbank1, 4
4.
5.
6.
7.
8.
9.
10. Nedbank1, 3
4. Interest cover ratio may not be less than 2.5 times
3. Interest cover ratio may not be less than 2 times.
2. LTV not to exceed 58%.
1. LTV not to exceed 50%.
Notes
Origination
Description
No Lender
26 000
26 130
34 180
45 000
50 125
123 000
151 000
Capital
amount
outstanding
(R’000)
Prime
– 1.50%
Prime
– 1.50%
Prime
– 1.50%
Prime
– 0.85%
Prime
– 1.50%
3 month
JIBAR +
1.90%
3 month
JIBAR +
1.90%
Interest
rate
Interest only facility with capital
repayment on the capital
repayment date
Interest only facility with capital
repayment on the capital
repayment date
Interest only facility with capital
repayment on the capital
repayment date
Interest only facility with capital
repayment on the capital
repayment date
Interest only facility with capital
repayment on the capital
repayment date
Interest only facility with capital
repayment on the capital
repayment date
Interest only facility with capital
repayment on the capital
repayment date
Capital repayments (quarterly/
annually)
Secured by bonds over
investment property valued at
R67.8 million
Secured by bonds over
investment property valued at
R69 million
Secured by bonds over
investment property valued at
R79 2 million
Secured by bonds over
investment property valued at
R95 million
Secured by bonds over
investment property valued at
R133 million
Secured by bonds over
investment property valued at
R357 million
Secured by bonds over
investment property valued at
R340 million
Security
18 July 2016
30 August 2016
30 August 2016
23 April 2018
28 June 2016
7 March 2019
12 September 2016
Maturity Date
Annexure 10
MATERIAL CONTRACTS
1.
MATERIAL CONTRACTS IN RESPECT OF THE ASCENSION ACQUISITION
1.1
Implementation agreement
1.1.1
In terms of the agreement entered into between Ascension and Rebosis (the “parties”) dated
23 February 2015, Ascension and Rebosis agreed to cooperate for the purposes of exploring a merger
between the parties, pursuant to which Rebosis confirmed its firm intention to make an offer to acquire
the entire linked unit capital of Ascension that Rebosis does not already own by way of the A unit scheme
and the B unit scheme.
1.1.2
In terms of the B unit scheme, the Ascension B linked units held by Ascension B linked unitholders will
be exchanged for ordinary shares in Rebosis on a swap ratio of 23.54900 Rebosis ordinary consideration
shares for every 100 Ascension B linked units held.
1.1.3
In terms of the A unit scheme, the Ascension A linked units held by Ascension A linked unitholders
will be exchanged for newly created A ordinary shares in Rebosis on a swap ratio of 19.34236 Rebosis A
ordinary consideration shares for every 100 Ascension A linked units held.
1.1.4
The terms of the Rebosis A ordinary shares would be set out in the new memorandum of incorporation
of Rebosis, including the following salient terms:
1.1.4.1
90
Upon the declaration of a distribution by Rebosis to its shareholders, no such distribution
shall be paid to Rebosis ordinary shareholders unless the Rebosis A ordinary consideration
shares have been paid their distribution which shall be the same amounts as Ascension linked
units’ entitlement to fixed income distributions. In addition, the rights of Rebosis A ordinary
consideration shares in relation to voting and liquidation proceeds would effectively mirror
those attaching to Ascension A linked units save that:
1.1.4.1.1
for every 5.17 Ascension A linked units, an Ascension A linked unitholder will
instead hold 1 Rebosis A ordinary consideration share with the same fixed
income distribution;
1.1.4.1.2
the voting rights attaching to the Rebosis A ordinary consideration shares will
not be more than 25% of the total voting rights applicable to Rebosis linked
unitholders;
1.1.4.1.3
no further Rebosis A ordinary consideration shares will be created or issued.
1.1.5
In anticipation of the implementation of the schemes, Rebosis will declare a special distribution to
its shareholders or linked unitholders of its distributable income and Ascension will declare a special
distribution to the holders of Ascension A and B linked units of its distributable income, on the basis
that the record date for participation in such distribution shall be the last day of the calendar month
immediately preceding the record date for participation in the schemes.
1.1.6
Going forward, the distribution periods for the Rebosis A ordinary consideration shares will be end
February, in respect of the interim income distribution, and end August, in respect of the final income
distribution, in line with the distribution periods for Rebosis ordinary shares.
1.1.7
The schemes will be subject to the conditions precedent to the schemes, as detailed in the circular.
1.1.8
Each of Ascension and Rebosis shall use its reasonable commercial endeavours to do and take all steps
reasonably necessary and desirable to give effect to the schemes.
1.1.9
During the period between the date of signature of the implementation agreement and the date of
fulfilment of the last of the conditions precedent to the schemes (the “interim period”):
1.1.9.1
Ascension will continue to conduct its business in the ordinary and regular course;
1.1.9.2
Ascension will not take any action which is designed to be prejudicial to the successful
outcome of the schemes;
1.1.9.3
save as publicly announced on SENS up to the date of the implementation of the offers or
save as may be agreed to by Rebosis in writing, Ascension will not make any acquisitions or
effect any disposals of any of its properties and/or the rental enterprises conducted thereon;
1.1.9.4
other than as provided in paragraph 1.1.5 above, Ascension will not effect any distributions
other than in the ordinary, normal and regular course in accordance with its historic
distribution policy and practices.
1.1.10 Ascension has agreed that it shall not:
1.1.10.1
enter into or participate in any discussions or negotiations regarding a transaction which
would constitute a de facto change of control of Ascension or be reasonably considered to be
likely to preclude the schemes or the implementation of the schemes (“alternative proposal”);
1.1.10.2 participate in any discussions or negotiations regarding an alternative proposal (unless it
constitutes a superior proposal, being a firm intention to make an offer from a bona fide
third party which the Ascension board determines in good faith and through the exercise
of its fiduciary duties would, if consummated, result in a transaction more favourable to the
Ascension linked unitholders, (“superior proposal”);
1.1.10.3 agree to, approve or recommend an alternative proposal (unless it constitutes a superior
proposal);
1.1.10.4 enter into any agreement related to an alternative proposal (unless it constitutes a superior
proposal).
1.2
The Ascension Asset Managers share sale agreement
1.2.1
In terms of the agreement dated 3 February 2014 between Rebosis, Wayne Arendse, Shaun Rai, each of
the shareholders of Ascension Asset Managers and the holders of 109 363 661 Ascension B linked units,
Rebosis acquired the entire issued share capital of Ascension Asset Managers as well as 109 363 661
Ascension B linked units.
1.2.2
The purchase consideration in respect of the acquisition of Ascension Asset Managers was R150 million,
payable by Rebosis in cash.
1.2.3
The aggregate purchase consideration payable by Rebosis in respect of the acquisition of 109 363 661
Ascension B linked units (the “B unit sale”) was R2.65 per Ascension B linked unit (on the basis that
Rebosis received the distribution in respect of the Ascension B linked units acquired for the distribution
period ending 31 December 2014), amounting to R289 813 701 in aggregate and payable as follows:
1.2.3.1
an amount of R150 million in cash;
1.2.3.2
the balance of R139 813 701 by the allotment and issue of new Rebosis linked units at an
issue price of R10.78 per unit.
1.2.4
Wayne Arendse and Shaun Rai represent and warrant to Rebosis that, pursuant to the exercise of a preemptive right that Wayne Arendse had in respect of KSK Trust and CEL’s shares in Ascension Asset
Managers, Wayne Arendse has become and is at 11h00 on 3 February 2014 the legal and registered
owner of the shares in Ascension Asset Managers previously held by the KSK Trust and CEL. Shaun Rai
and CEL accordingly do not hold shares in Ascension Asset Managers. Shaun Rai, KSK Trust, CEL and
Wayne Arendse warrant to Rebosis that no other person has any right or claim of any nature in respect
of the shares in Ascension Asset Managers previously held by KSK Trust or CEL.
1.2.5
Save as set out above, the vendors of the shares in Ascension Asset Managers provided Rebosis warranties
and indemnities which are usual for transactions of this kind.
1.2.6
No warranties or representations were provided to Rebosis by the vendors in respect of the B unit sale.
1.2.7
In the event that Ascension cancels the Ascension Asset Management Agreement between Ascension
Asset Managers and Ascension at any time during a period of one year after 3 February 2014, Rebosis
shall have the option to sell to the vendors of the shares in Ascension Asset Managers the shares in
Ascension Asset Managers, in the same proportions in which they are sold in terms of the Ascension
Asset Managers share sale agreement, for a consideration of R1.00. The option must be exercised prior
to the expiry of such one year period, failing which it shall lapse.
91
1.3
Ascension outsourcing agreement
In terms of the agreement entered into between Ascension, Ascension Asset Managers and Billion Asset Managers
dated 3 February 2014, the asset management of Ascension in terms of the Ascension Asset Management Agreement
has been outsourced to Billion Asset Managers.
1.4
1.5
92
Cooperation agreement between Ascension and Rebosis
1.4.1
In terms of the cooperation agreement entered into between Ascension and Rebosis dated 3 February 2014,
Ascension and Rebosis undertook to each other a duty of utmost good faith in cooperating to explore
a merger of Ascension and Rebosis in order to enhance their market capitalisation, investor liquidity
and prospects. The parties undertook to explore the basis on which Rebosis offers to acquire the issued
liked units in Ascension pursuant to schemes of arrangement or a transaction structure to similar effect.
To avoid prejudicing the discussions between the parties, neither party shall dispose of material assets
or enter into a transaction of any nature which in substance has the same or similar effect, without the
prior written consent of the other and, in the event of any contemplated disposal, the party wishing to
dispose of assets shall consult the other early in the process and afford the other a pre-emptive right to
acquire the assets in question on a basis that substantially matches the envisaged disposal on transaction
terms and conditions. The prohibition on disposal and pre-emptive rights undertaken in the aforesaid
cooperation agreement shall not apply to retail assets owned by Rebosis, which fall outside of Ascension’s
investment strategy.
1.4.2
To ensure an adequate interval for the cooperation relationship to bear fruit, the parties agreed that the
cooperation agreement shall remain binding until 30 June 2015 unless otherwise agreed between them.
The cooperation agreement between Ascension, Delta and Rebosis
1.5.1
In terms of the cooperation agreement entered into between Ascension, Delta and Rebosis dated
24 February 2014 (the “tripartite cooperation agreement”), Ascension, Delta and Rebosis, the parties
undertook to each other a duty of utmost good faith in cooperating to explore a tripartite merger of
Ascension, Delta and Rebosis.
1.5.2
The parties undertook to each other that they will cooperate with each other for the purposes of enabling
each party to perform on each other a high level financial, legal and tax due diligence investigations.
1.5.3
For the purposes of determining the ratio in which the linked unitholders of each of Ascension, Delta
and Rebosis will end up holding shares in the surviving entity (the “exchange ratio”), the parties agreed
to jointly engage the services of independent and qualified property valuation experts on the following
basis:
1.5.3.1
in respect of retail property, Old Mutual was appointed;
1.5.3.2
in respect of commercial and industrial property, the property valuation expert who
performed the valuation of the assets of the parties for the purposes of their last annual
financial statements was appointed; and
1.5.3.3
in respect of properties which have not yet been valued or the valuation expert who performed
the original valuation is not available, Peter Parfitt of Quadrant Properties was appointed.
1.5.4
Upon receipt of the aforesaid asset valuations, each of the parties would mandate Java Capital and
Nedbank Capital to jointly determine the exchange ratio.
1.5.5
Prior to the expiry or termination of the agreement, each of the parties shall not, unless they obtain the
prior written consent of the other parties is obtained, which consent shall not be unreasonably withheld
or delayed:
1.5.5.1
carry on its business in the ordinary and usual course;
1.5.5.2
not take any action which is designed to be prejudicial to the successful outcome of the
proposed tripartite merger;
1.5.5.3
except as provided for in the tripartite cooperation agreement, not alter the provisions of
its memorandum of incorporation nor adopt or pass further resolutions or regulations
inconsistent therewith;
1.5.5.4
not alter its share capital or purchase or redeem its own shares or debentures other than for
the purposes of implementing the proposed tripartite merger;
1.5.5.5
1.5.6
1.6
not incur any indebtedness other than for the purposes of the acquisitions disclosed in the
tripartite cooperation agreement.
As announced on SENS on 24 June 2014, the parties had agreed that a tripartite merger was not
opportune and the cooperation agreement was terminated.
The acquisition agreement between Delta and Rebosis
1.6.1
In terms of the acquisition agreement entered into between Rebosis and Delta dated 23 June 2014,
Rebosis acquired 28 001 628 Ascension A linked units for a cash consideration of R4.76 per Ascension
A linked units and 82 575 341 Ascension B linked units for a cash consideration of R2.61 per Ascension
B linked unit from Delta.
1.6.2
As a material term of the acquisition agreement between Delta and Rebosis, Delta undertook to support
and co-operate in good faith with Rebosis in order to facilitate and advance and in no way obstruct the
intended acquisition by Rebosis of 100% of the issued shares of Ascension, whether by endeavouring to
purchase securities or properties owned by Ascension or otherwise.
1.6.3
All legal fees incurred by Delta and Rebosis in pursuance of the three way merger between Delta,
Rebosis and Ascension, will be borne equally between Delta and Rebosis. In addition, Rebosis would
contribute an amount of R3 million towards advisory costs incurred by Delta in pursuance of the
aforesaid three way merger.
1.6.4
Delta made no representations and provided no warranties in relation to the Ascension A linked units
and the Ascension B linked units acquired by Rebosis from Delta, other than that Delta will deliver free
and unencumbered title in respect of the Ascension A linked units and the Ascension B linked units.
2. MATERIAL CONTRACTS OF REBOSIS
2.1
Letter agreement with the Department of Public Works
The letter from the DPW dated 9 March 2012 in terms of which the DPW confirms that subject to Ascension Asset
Managers remaining a fully empowered entity in terms of the BEE policies and Ascension and Ascension Asset
Managers committing to procure 60% of services from the national government’s Property Incubator Programme,
the lease agreements in respect of the office properties in which the DPW is a lessee shall continue unchanged.
2.2
Acquisition agreements
2.2.1
2.2.2
Sunnypark Shopping Centre
2.2.1.1
In terms of the agreement dated 14 November 2012 between Rebosis and Centre of the Sun
Properties Proprietary Limited, Rebosis agreed to purchase the letting enterprise conducted
in respect of the Sunnypark Shopping Centre with effect from the date of registration of the
property into Rebosis’ name.
2.2.1.2
The aggregate purchase payable by Rebosis to Centre of the Sun Properties Proprietary
Limited was R572 900 000, payable in cash. The purchase consideration for the Sunnypark
acquisition was increased by R16.9 million, accrued against the fair value of the property as at
the year-end, 31 August 2014. The adjustment, which has been recovered from Centre of the
Sun Properties Proprietary Limited after year-end, relates to the shortfall in rentals in respect
of renewed leases that expired within the 12 month period post transfer of the property,
capped at the acquisition yield of 7.75%.
2.2.1.3
Centre of the Sun Properties Proprietary Limited provided Rebosis warranties and indemnities
which are usual for transactions of this nature.
2.2.1.4
This property was transferred on 28 June 2013.
99 Market Street
2.2.2.1
In terms of the agreement in respect of 99 Market Street dated 4 December 2012, Arena
Props 40 Proprietary Limited agreed to sell to Rebosis, which agreed to purchase 99 Market
Street with effect from the date of registration of such property into the name of Rebosis,
acquired the property and the rental enterprise.
93
2.2.3
2.2.4
2.2.5
2.2.6
94
2.2.2.2
The total purchase price payable by Rebosis to Arena Props 40 Proprietary Limited was
R142 600 000, payable in cash against the transfer of 99 Market Street to Rebosis. The
purchase price includes an amount of R14 000 000, which amount was allocated for
refurbishments.
2.2.2.3
Arena Props 40 Proprietary Limited provided Rebosis warranties and indemnities which are
usual for transactions of this kind.
2.2.2.4
This property was transferred on 13 September 2013.
64 Eloff Street
2.2.3.1
In terms of the agreement in respect of 64 Eloff Street dated 4 December 2012, Fast Pace
Trade and Invest 28 Proprietary Limited agreed to sell to Rebosis, which agreed to purchase
64 Eloff Street with effect from the date of registration of such property into the name of
Rebosis, acquired the property and the rental enterprise.
2.2.3.2
The total purchase price payable by Rebosis to Fast Pace Trade and Invest 28 Proprietary
Limited was R53 500 000, payable in cash against the transfer of 64 Eloff Street to Rebosis.
The purchase price includes an amount of R14 000 000, which amount was allocated for
refurbishments.
2.2.3.3
Fast Pace Trade and Invest 28 Proprietary Limited provided Rebosis warranties and
indemnities which are usual for transactions of this kind.
2.2.3.4
This property was transferred on 11 September 2013.
189 Schoeman Street
2.2.4.1
In terms of the agreement in respect of 189 Schoeman Street dated 4 December 2012,
Dreamfair Properties 26 Proprietary Limited agreed to sell to Rebosis, which agreed to
purchase 189 Schoeman Street with effect from the date of registration of such property into
the name of Rebosis acquired the property and the rental enterprise.
2.2.4.2
The total purchase price payable by Rebosis to Dreamfair Properties 26 Proprietary Limited
was R257 700 000, payable in cash against the transfer of 189 Schoeman Street to Rebosis.
2.2.4.3
Dreamfair Properties 26 Proprietary Limited provided Rebosis warranties and indemnities
which are usual for transactions of this kind.
2.2.4.4
This property was transferred on 9 September 2013.
18 Rissik Street
2.2.5.1
In terms of the agreement in respect of 18 Rissik Street dated 4 December 2012, Interstate
Clearing 040 Proprietary Limited agreed to sell to Rebosis, which agreed to purchase 18
Rissik Street with effect from the date of registration of such property into the name of
Rebosis acquired the property and the rental enterprise.
2.2.5.2
The total purchase price payable by Rebosis to Interstate Clearing 040 Proprietary Limited
was R193 592 325, payable in cash against the transfer of 18 Rissik Street to Rebosis.
The purchase price includes an amount of R31 292 325 which amount is allocated for
refurbishments.
2.2.5.3
Interstate Clearing 040 Proprietary Limited provided Rebosis warranties and indemnities
which are usual for transactions of this kind.
2.2.5.4
This property was transferred on 11 September 2013.
124 Main Street
2.2.6.1
In terms of the agreement in respect of 124 Main Street dated 4 December 2012, Subway
Trading and Investment 36 Proprietary Limited agreed to sell to Rebosis, which agreed to
purchase 124 Main Street with effect from the date of registration of such property into the
name of Rebosis acquired the property and the rental enterprise.
2.2.6.2
The total purchase price payable by Rebosis to Subway Trading and Investment 36 Proprietary
Limited was R413 000 000, payable in cash against the transfer of 124 Main Street to Rebosis.
2.2.6.3
Subway Trading and Investment 36 Proprietary Limited provided Rebosis warranties and
indemnities which are usual for transactions of this kind.
2.2.6.4
This property was transferred on 23 September 2013.
3. MATERIAL CONTRACTS OF ASCENSION
3.1
3.2
3.3
3.4
3.5
86 Main Street
3.1.1
In terms of the agreement dated during or about October 2012 in respect of 86 Main Street, Johannesburg,
Bunker Hills Inv 530 Proprietary Limited agreed to sell to Ascension, which agreed to purchase 86 Main
Street with effect from the date of registration of such property into the name of Ascension.
3.1.2
The aggregate purchase price payable by Ascension to Bunker Hills Inv 530 Proprietary Limited was
R70 million, payable in cash against transfer of 86 Main Street.
3.1.3
Bunker Hills Inv 530 Proprietary Limited provided Ascension warranties and indemnities which are
usual for transactions of this nature.
3.1.4
This property was transferred on 23 April 2013.
174 Visagie Street
3.2.1
In terms of the agreement dated during or about March 2013 in respect of 174 Visagie Street, Growthpoint
Properties Limited agreed to sell to Ascension, which agreed to purchase 174 Visagie Street with effect
from the date of registration of such property into the name of Ascension.
3.2.2
The aggregate purchase price payable by Ascension to Growthpoint Properties Limited was R82 800 000,
payable in cash against transfer of 174 Visagie Street.
3.2.3
Growthpoint Properties Limited provided Ascension warranties and indemnities which are usual for
transactions of this nature.
3.2.4
This property was transferred on 28 June 2013.
Island Centre
3.3.1
In terms of the agreement dated during or about March 2013 in respect of the Island Centre, Cape
Town, the Belulu Trust agreed to sell to Ascension, which agreed to purchase Island Centre with effect
from the date of registration of such property into the name of Ascension.
3.3.2
The aggregate purchase price payable by Ascension to the Belulu Trust was R55 000 000, payable in cash
against transfer of 174 Visagie Street.
3.3.3
The Belulu Trust provided Ascension warranties and indemnities which are usual for transactions of
this nature.
3.3.4
This property was transferred on 16 July 2013.
River View 1 and 2
3.4.1
In terms of the agreement dated during or about June 2013 in respect of River View 1 and 2, Coffee
Break Investments Proprietary Limited agreed to sell to Ascension, which agreed to purchase River View
1 and 2 with effect from the date of registration of such properties into the name of Ascension.
3.4.2
The aggregate purchase price payable by Ascension to Coffee Break Investments Proprietary Limited
was R72.5 million, payable in cash against transfer of River View 1 and 2.
3.4.3
Coffee Break Investments Proprietary Limited provided Ascension warranties and indemnities which
are usual for transactions of this nature.
3.4.4
This property was transferred on 30 August 2013.
River Park 1 and 2
3.5.1
In terms of the agreement dated during or about June 2013 in respect of River Park 1 and 2, Koejaweldorp
Beleggings CC agreed to sell to Ascension, which agreed to purchase River Park 1 and 2 with effect from
1 December 2012.
95
3.6
3.7
96
3.5.2
The aggregate purchase price payable by Ascension to Koejaweldorp Beleggings CC was R62 million,
payable in cash against transfer of River Park 1 and 2.
3.5.3
Koejaweldorp Beleggings CC provided Ascension warranties and indemnities which are usual for
transactions of this nature.
3.5.4
This property was transferred on 30 August 2013.
Atterbury House
3.6.1
In terms of the agreement dated during or about June 2013 in respect of Atterbury House, Atterbury
Investment Holdings Limited agreed to sell to Ascension, which agreed to purchase Atterbury House
with effect from the date of registration of such properties into the name of Ascension.
3.6.2
The aggregate purchase price payable by Ascension to Atterbury Investment Holdings Limited was
R341 million, payable in cash against transfer of Atterbury House.
3.6.3
Atterbury Investment Holdings Limited provided Ascension warranties and indemnities which are usual
for transactions of this nature.
3.6.4
This property was transferred on 12 September 2013.
Surrey House at Rissik Street
3.7.1
In terms of the agreement dated during or about October 2013 in respect of Surrey House, Main Street
1119 Proprietary Limited agreed to sell to Ascension, which agreed to purchase Surrey House with effect
from the date of registration of such properties into the name of Ascension.
3.7.2
The aggregate purchase price payable by Ascension to Main Street 1119 Proprietary Limited was
R104 104 043, payable in cash against transfer of Surrey House.
3.7.3
Main Street 1119 Proprietary Limited provided Ascension warranties and indemnities which are usual
for transactions of this nature.
3.7.4
This property was expected to be transferred on 7 March 2014.
Rebosis Property Fund Limited
(Registration number 2010/003468/06)
JSE share code: REB
ISIN code: ZAE000156147
(Approved as a REIT by the JSE)
(“Rebosis” or “the company”)
NOTICE OF GENERAL MEETING OF SHAREHOLDERS
Notice is hereby given that a general meeting of shareholders of Rebosis (“shareholders”) will be held at the offices of Rebosis
being 3rd Floor, Palazzo Towers West, Montecasino Boulevard, Fourways, 2191 at 10:00 on Friday, 22 May 2015 (the “general
meeting of shareholders”), for the purpose of considering and, if deemed fit, passing with or without modification, the
resolutions set out below.
All meeting participants, including proxies, will be required to provide identification reasonably satisfactory to the chairman
of the meeting.
Important dates to note
2015
Record date for receipt of notice of the general meeting of shareholders
Last day to trade in order to be eligible to participate in and vote at the general meeting of shareholders
Record date for voting purposes at the general meeting of shareholders (“voting record date”)
Last day to lodge forms of proxy for the general meeting of shareholders by 10h00
Date of general meeting of shareholders (at 10:00)
Results of general meeting of shareholders released on SENS
Friday, 17 April
Friday, 8 May
Friday, 15 May
Wednesday, 20 May
Friday, 22 May
Friday, 22 May
Where appropriate and applicable the terms defined in the circular to which this notice of general meeting of shareholders is
attached and forms part of bear the same meanings in this notice of general meeting, and in particular, in the resolutions set
out below.
Due to the expanded meaning of “shareholder” in section 57(1) of the Companies Act, 71 of 2008, as amended (the
“Companies Act” or “Act”) the company has expanded this notice to shareholders and debenture holders for a “combined”
general meeting. Due to Rebosis’ linked unit structure, its shareholders are also its debenture holders however the matters to
be voted on at the general meeting of shareholders are matters on which shareholders, and not debenture holders, are entitled
to vote.
In terms of section 62(3)(e) of the Companies Act:
• a shareholder who is entitled to attend and vote at the general meeting is entitled to appoint a proxy or two or more proxies
to attend, participate in and vote at the general meeting in the place of the shareholders;
• a debenture holder who is entitled to attend the general meeting is entitled to appoint a proxy or two or more proxies to
attend and participate (but not vote) in the general meeting in the place of a debenture holder;
• a proxy need not be a shareholder or debenture holder of the company.
Kindly note that meeting participants (including proxies) are required to provide reasonably satisfactory identification before
being entitled to attend or participate in a meeting. In this regard, all Rebosis shareholders and debenture holders recorded
in the registers of the company on the voting record date will be required to provide identification satisfactory to the
chairman of the general meeting. Forms of identification include valid identity documents, drivers licences and passports.
97
NOW THEREFORE:
SHAREHOLDER ORDINARY RESOLUTION 1: THE ASCENSION ACQUISITION
“Resolved that, in terms of paragraph 9.20 of the Listings Requirements of the JSE and subject to the conditions precedent to
the Ascension acquisition as set out in paragraph 3.7 of the circular to which this notice of general meeting is attached, being
fulfilled or waived (save for any condition precedent contained therein relating to the passing of this shareholder ordinary
resolution 1, shareholder special resolution 1 and shareholder special resolution 2), Rebosis be and is hereby authorised to enter
into and implement the Ascension acquisition, pursuant to which Rebosis will, if the schemes become operative, acquire the
entire issued linked unit capital of Ascension, in consideration for the scheme consideration.”
In order for shareholder ordinary resolution 1 to be adopted, the support of more than 50% of the voting rights exercised by
Rebosis shareholders on shareholder ordinary resolution 1, is required. By voting in favour of shareholder ordinary resolution
1, a shareholder is accordingly also deemed to have voted in favour of such resolution as debenture holder and linked unitholder,
to the extent required by the Listings Requirements, the company’s memorandum of incorporation, debenture trust deed or
otherwise.
SHAREHOLDER SPECIAL RESOLUTION 1: THE ALLOTMENT AND ISSUE OF THE REBOSIS ORDINARY
SHARES PURSUANT TO THE B SCHEME
“Resolved that, in accordance with the existing memorandum of incorporation of the company and sections 41(1) and 41(3)
of the Companies Act, 71 of 2008, as amended (the “Companies Act”), and subject to the approval of shareholder ordinary
resolution 1, the issuing of the Rebosis ordinary consideration shares in consideration for the acquisition of the Ascension “B”
linked units in terms of the B scheme, as more fully set out in the circular to which this notice of general meeting is attached,
be and is hereby approved if and to the extent that such approval may be required:
• in terms of section 41(1) of the Companies Act, because such shares are issued to (i) a director, future director, prescribed
officer or future prescribed officer of the company, or (ii) to a person related or inter-related to the Company or any of the
persons referred to in (i) above, or the respective nominees of any of the persons referred to in (i) or (ii) above;
• in terms of section 41(3) of the Companies Act, because such shares equals to or exceeds 30% of the Company’s issued
share capital immediately before the issue of such shares in any transaction or series of integrated transactions; and/or
• in terms of the existing memorandum of incorporation of the company, in order to place sufficient of the authorised
unissued Rebosis ordinary shares under the control of the directors as is required to implement the B scheme, as more
fully set out in the circular to which this notice of general meeting is attached. ”
In order for shareholder special resolution 1 to be adopted, the support of at least 75% of the total number of votes exercised
by shareholders on shareholder special resolution 1, is required. By voting in favour of shareholder special resolution 1, a
shareholder is accordingly also deemed to have voted in favour of such resolution as debenture holder and linked unitholder,
to the extent required by the Listings Requirements, the company’s memorandum of incorporation, debenture trust deed or
otherwise.
Reason and effect
The reason for shareholder special resolution 1 is that the issuing of the Rebosis ordinary shares in terms of the B scheme,
required the approval of shareholders by means of a special resolution in terms of section 41(3) of the Companies Act and by
means of a special resolution in terms of section 41(1) of the Companies Act (to the extent that a scheme participant may be
a person referred to in section 41(1) of the Companies Act at the time the Rebosis consideration shares are issued) and requires
that sufficient of the Rebosis ordinary shares be placed under the control of the directors in terms of the company’s existing
memorandum of incorporation. The effect of shareholder special resolution 1 is to grant the requisite approval in terms of
section 41(3) and section 41(1) of the Companies Act, and the existing memorandum of incorporation of the company.
SHAREHOLDER SPECIAL RESOLUTION 2: THE ALLOTMENT AND ISSUE OF THE REBOSIS A ORDINARY
SHARES PURSUANT TO THE A SCHEME
“Resolved that, in accordance with the existing memorandum of incorporation of the company and sections 41(1) and 41(3)
of the Companies Act, and subject to the approval or shareholder ordinary resolution 1, the issuing of the Rebosis A ordinary
shares in consideration for the acquisition of the Ascension “A” linked units in terms of the A scheme as more fully set out in
the circular to which this notice of general meeting is attached, be and is hereby approved if and to the extent that such
approval may be required:
• in terms of section 41(1) of the Companies Act, because such shares are issued to (i) a director, future director, prescribed
officer or future prescribed officer of the company, or (ii) to a person related or inter-related to the Company or any of the
persons referred to in (i) above, or the respective nominees of any of the persons referred to in (i) or (ii) above;
98
• in terms of section 41(3) of the Companies Act, because such shares equals to or exceeds 30% of the Company’s issued
share capital immediately before the issue of such shares in any transaction or series of integrated transactions; and/or
• in terms of the existing memorandum of incorporation of the company, in order to place sufficient of the authorised
unissued Rebosis A ordinary shares under the control of the directors as is required to implement the A scheme, as more
fully set out in the circular to which this notice of general meeting is attached.”
In order for shareholder special resolution 2 to be adopted, the support of at least 75% of the total number of votes exercised
by shareholders on shareholder special resolution 2, is required. By voting in favour of shareholder special resolution 2, a
shareholder is accordingly also deemed to have voted in favour of such resolution as debenture holder and linked unitholder,
to the extent required by the Listings Requirements, the company’s memorandum of incorporation, debenture trust deed or
otherwise.
Reason and effect
The reason for shareholder special resolution 2 is that the issuing of the Rebosis A ordinary shares in terms of the A scheme,
requires the approval of shareholders by means of a special resolution in terms of section 41(3) of the Companies Act and by
means of a special resolution in terms of section 41(1) of the Companies Act (to the extent that a scheme participant may be
a person referred to in section 41(1) of the Companies Act at the time the Rebosis A ordinary shares are issued) and requires
that sufficient of the Rebosis A ordinary shares be placed under the control of the directors in terms of the company’s existing
memorandum of incorporation. The effect of shareholder special resolution 2 is to grant the requisite approval in terms of
section 41(3) and section 41(1) of the Companies Act and the existing memorandum of incorporation of the company.
SHAREHOLDER ORDINARY RESOLUTION 2: AMENDMENT OF THE BILLION ASSET MANAGEMENT
AGREEMENT
“Resolved that amendments to the asset management agreement entered into between Rebosis, Billion Group Proprietary
Limited and Billion Asset Managers Proprietary Limited dated 28 March 2011 (the “Billion asset management agreement”)
be and are hereby approved within the parameters specified below:
“2.1 amending the existing clause 4.4 so that either party is entitled to terminate the Billion asset management agreement by
giving three years’ written notice provided that the earliest date on which such notice may only be given to the party be
extended from 28 March 2015, as currently provided, to a date falling between 29 March 2015 and 28 March 2020;
2.2
amending the existing clause 7.1.1 (asset management fee) so that the monthly asset management fee payable under the
Billion asset management agreement by Rebosis to Billion Asset Managers be amended from 1/12 of 0.3% of the
aggregate of the market capitalisation and the borrowings of Rebosis (“Rebosis EV”) to:
2.2.1 1/12 of between 0.3% and 0.4% in respect of the first R10 billion of Rebosis EV; and
2.2.2 1/12 of 0.3% of Rebosis EV in excess of R10 billion;
2.3
amending the existing clause 14.4.2.1 (agreed termination period) so that in the event of a termination event, as defined
in the Billion asset management agreement, Rebosis shall pay to Billion Asset Managers by way of compensation, the
net present value of the specified management fee for the agreed termination period, being a period of three years from
the date of termination. For the purposes of this calculation, the “specified management fee” will be 0.3% of Rebosis
EV for the 12 months immediately preceding the termination event and not the actual management fee for the 12
months immediately preceding the termination event, as currently provided;
2.4
amending the existing clause 14.4.2. (specified management fee) so that if the right to terminate the Billion asset
management agreement is exercised before the earliest date on which notice may be provided as extended in terms of
paragraph 2.1 above, the agreed termination period shall be the three years referred to in paragraph 2.3 plus the
remaining period of the such extended period, and not the remaining period of the first four years as currently provided,
with effect from the date of the general meeting, and any of the directors is hereby authorised to execute some or all of the
aforementioned amendments, within the parameters specified above, on behalf of the company and do all things necessary for
or incidental to the implementation of this ordinary resolution 2.”
Shareholders are requested to consider, and if deemed fit, approve, the amendment of the terms of the Billion asset management
agreement within the parameters specified in this ordinary resolution 2, on the basis that the board shall be entitled to agree to
some or all of those approved amendments, and the specific terms thereof, provided that the specific terms fall within the
parameters specified in this ordinary resolution 2. Rebosis will however announce the specific terms within the approved
parameters specified on SENS at least 5 business days before the date on which the general meeting will be held. Rebosis hereby
undertakes not to agree to any amendments of the Billion asset management agreement other than as specified in the
aforementioned SENS announcement.
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In terms of section 13.40 of the Listings Requirements, in order for shareholder ordinary resolution 2 to be adopted, the
approval of more than 50% of the votes cast by securities holders, excluding any votes which may be cast by any parties or their
associates, as defined in the Listings Requirements, who are party to or have an interest in the Billion asset management
agreement, is required. All votes cast on shareholder ordinary resolution 2 set out above, are also cast by shareholders in their
capacities as debenture holders and linked unitholders. By voting in favour of shareholder ordinary resolution 2, a shareholder
is accordingly also deemed to have voted in favour of such resolution as debenture holder and linked unitholder, to the extent
required by the Listings Requirements, the company’s memorandum of incorporation, debenture trust deed or otherwise.
SHAREHOLDER ORDINARY RESOLUTION 3: GENERAL AUTHORITY
“Resolved that any director of Rebosis be and they are hereby authorised to do all such things and sign all such documents as
are necessary to give effect to the ordinary and special resolutions proposed and passed at the general meeting of shareholders
at which this ordinary resolution is proposed.”
In order for shareholder ordinary resolution 3 to be adopted, the support of more than 50% of the voting rights exercised by
Rebosis shareholders on shareholder ordinary resolution 3 is required. By voting in favour of shareholder ordinary resolution
3, a shareholder is accordingly also deemed to have voted in favour of such resolution as debenture holder and linked unitholder,
to the extent required by the Listings Requirements, the company’s memorandum of incorporation, debenture trust deed or
otherwise
QUORUM
A quorum for the purposes of considering the shareholder resolutions above shall consist of three shareholders of the company
personally present (and if the shareholder is a body corporate, it must be represented) and entitled to vote at the general
meeting of shareholders. In addition, a quorum shall comprise 25% of all the voting rights that are entitled to be exercised by
Rebosis shareholders in respect of each matter to be decided at the general meeting of shareholders.
The date on which Rebosis shareholders must be recorded as such in the register maintained by the transfer secretaries,
Computershare Investor Services Proprietary Limited, for the purposes of being entitled to attend, participate in and vote at
the general meeting of shareholders is Friday, 15 May 2015.
SHAREHOLDERS
General instructions
Shareholders are encouraged to attend, speak and vote at the general meeting.
Electronic participation
The company has made provision for Rebosis shareholders or their proxies to participate electronically in the general meeting
of shareholders by way of telephone conferencing. Should you wish to participate in the general meeting of shareholders by
telephone conference call as aforesaid, you, or your proxy, will be required to advise the company thereof by no later than
10h00 on Wednesday, 20 May 2015, by submitting by e-mail to the company secretary at [email protected], relevant
contact details, including an e-mail address, cellular number and landline as well as full details of the Rebosis shareholder’s title
to securities issued by the company and proof of identity, in the form of copies of identity documents and share certificates (in
the case of materialised Rebosis shares) and in the case of dematerialised Rebosis shares) written confirmation from the Rebosis
shareholder’s CSDP confirming the Rebosis shareholder’s title to the dematerialised Rebosis shares. Upon receipt of the
required information, the Rebosis shareholder concerned will be provided with a secure code and instructions to access the
electronic communication during the general meeting. Rebosis shareholders must note that access to the electronic
communication will be at the expense of the Rebosis shareholders who wish to utilise the facility.
Rebosis shareholders and their appointed proxies attending by conference call will not be able to cast their votes at the general
meeting of shareholders through this medium.
Proxies and authority for representatives to act
A form of proxy is attached for the convenience of any Rebosis shareholder holding certificated shares, who cannot attend the
general meeting but wishes to be represented thereat.
100
The attached form of proxy is only to be completed by those shareholders who are:
• holding shares in certificated form; or
• recorded on the company’s sub-register in dematerialised electronic form with “own name” registration.
All other beneficial owners who have dematerialised their shares through a Central Securities Depository Participant (“CSDP”)
or broker and wish to attend the general meeting of shareholders, must instruct their CSDP or broker to provide them with
the necessary letter of representation, or they must provide the CSDP or broker with their voting instructions in terms of the
relevant custody agreement entered into between them and the CSDP or broker. These shareholders must not use a form of
proxy.
Forms of proxy must be deposited at the transfer secretaries, Computershare Investor Services Proprietary Limited, 70 Marshall
Street, Johannesburg 2001 (PO Box 61051, Marshalltown 2107) to be received by no later than 10h00 on Wednesday,
20 May 2015. Any shareholder who completes and lodges a form of proxy will nevertheless be entitled to attend, speak and
vote in person at the general meeting of shareholders should the shareholder decide to do so.
A company that is a shareholder, wishing to attend and participate at the general meeting of shareholders should ensure that a
resolution authorising a representative to so attend and participate at the general meeting of shareholders on its behalf is passed
by its directors. Resolutions authorising representatives in terms of section 57(5) of the Companies Act must be lodged with
the company’s transfer secretaries prior to the general meeting.
Rebosis does not accept responsibility and will not be held liable for any failure on the part of the CSDP or broker of a
dematerialised shareholder not notify such shareholder of the general meeting of shareholders or any business to be
conducted thereat.
DEBENTURE HOLDERS
General instructions
Debenture holders are encouraged to attend and speak at the general meeting of shareholders.
Electronic participation
The company has made provision for its debenture holders or their proxies to participate electronically in the general meeting
of shareholders by way of telephone conferencing. Should you wish to participate in the general meeting by telephone
conference call as aforesaid, you, or your proxy, will be required to advise the company thereof by no later than 10h00 on
Wednesday, 20 May 2015, by submitting by e-mail to the company secretary at [email protected], relevant contact
details, including an e-mail address, cellular number and landline as well as full details of the debenture holder’s title to
securities issued by the company and proof of identity, in the form of copies of identity documents and debenture certificates
(in the case of materialised debentures) and (in the case of dematerialised debentures) written confirmation from the debenture
holder’s CSDP confirming the debenture holder’s title to the dematerialised debentures. Upon receipt of the required
information, the debenture holder concerned will be provided with a secure code and instructions to access the electronic
communication during the general meeting. Debenture holders must note that access to the electronic communication will be
at the expense of the debenture holder who wishes to utilise the facility.
Proxies and authority for representatives to act
Due to Rebosis’ linked unit structure, its shareholders are also its debenture holders and the matters to be voted on at the
general meeting of shareholders are matters on which shareholders and not debenture holders are entitled to vote.
Debenture holders wishing to appoint a proxy or two or more proxies to attend and participate (but not vote) in the general
meeting of shareholders may contact the company secretary at [email protected] to obtain such form of proxy.
Rebosis does not accept responsibility and will not be held liable for any failure on the part of the CSDP or broker of a
dematerialised debenture holder to notify such debenture holder of the general meeting of shareholders or any business
to be conducted thereat.
101
GENERAL NOTES
1. A member entitled to attend and vote at the general meeting of shareholders may appoint a proxy to attend, speak and vote in his or her stead. A proxy
need not be a member of the company.
2. All forms of proxy or other instruments of authority must be deposited with the transfer secretaries, so as to be received no later than 10h00 on
Wednesday, 20 May 2015. Shareholders who are companies or other bodies corporate may, by resolution of its directors or other governing body,
authorise any person to act as its representative at the general meeting of shareholders.
3. Shareholders who have not dematerialised their linked units and own-name dematerialised shareholders who are unable to attend the general meeting of
shareholders and wish to be represented thereat, must complete the attached form of proxy in accordance with the instructions therein and return it to
the transfer secretaries, so as to be received no later than 10h00 on Wednesday, 20 May 2015.
4. Shareholders who have dematerialised their linked units with a CSDP or broker, other than with own-name registration, should advise their CSDP or
broker with their voting instruction in terms of the agreement entered into between them and their CSDP or broker. Shareholders who have dematerialised
their linked units and wish to attend the general meeting of shareholders must contact their CSDP or broker who will furnish them with the necessary
authority to attend general meeting of shareholders.
5. Shareholders who have dematerialised their linked units, other than with own-name registration, must not return the form of proxy to the transfer
secretaries. Their instructions must be sent to their CSDP or broker for action.
6. On a show of hands, every member present in person or every proxy representing shareholders, shall have only one vote, irrespective of the number of
linked units he or she holds.
7. On a poll, every shareholder present in person or represented by proxy shall have one vote for every linked unit held by such shareholder.
8. A resolution put to the vote shall be decided by way of a poll.
By order of the board
Rebosis Property Fund Limited
22 April 2015
Registered office
3rd Floor
Palazzo Towers West
Montecasino Boulevard
Fourways
2191
102
Rebosis Property Fund Limited
(Registration number 2010/003468/06)
JSE share code: REB
ISIN code: ZAE000156147
(Approved as a REIT by the JSE)
(“Rebosis” or “the company”)
FORM OF PROXY
THIS FORM OF PROXY IS ONLY FOR USE BY:
• registered unitholders who have not yet dematerialised their Rebosis units;
• registered unitholders who have already dematerialised their Rebosis units and which linked units are registered in their own names in the company’s
sub-register.
For completion by the aforesaid registered unitholders of Rebosis who are unable to attend the general meeting of shareholders of the company to be held at
the offices of the company at 3rd Floor, Palazzo Towers West, Montecasino Boulevard, Fourways, 2191 at 10:00 on Friday, 22 May 2015 (“the general meeting
of shareholders”);
If you are a dematerialised unitholder, other than with “own name” registration, do not use this form. Dematerialised unitholders, other than with “own name”
registration, should provide instructions to their appointed Central Securities Depository Participant (“CSDP”) or broker in the form as stipulated in the
agreement entered into between the shareholder and the CSDP or broker.
I/We (FULL NAMES IN BLOCK LETTERS PLEASE)
of (Address)
Telephone number: (
)
Cellphone number: (
)
E-mail address
being the holder(s) of
Rebosis shares hereby appoint:
1.
or failing him/her
2.
of failing him/her
3. the chairman of the general meeting
as my/our proxy to attend and speak and to vote for me/us and on my/our behalf at the general meeting and at any adjournment or postponement thereof,
for the purpose of considering and, if deemed fit, passing, with or without modification, the resolutions to be proposed at the general meeting, and to vote on
the resolutions in respect of the Rebosis ordinary shares registered in my/our name(s):
Please indicate with an “X” in the appropriate spaces below how you wish your votes to be cast. Unless this is done the proxy will vote as he/she thinks fit.
*In favour of
Number of votes
*Against
*Abstain
Shareholder ordinary resolution 1: The Ascension acquisition
Shareholder special resolution 1: The allotment and issue of the Rebosis ordinary consideration
shares pursuant to the B scheme
Shareholder special resolution 2: The allotment and issue of the Rebosis A ordinary shares
pursuant to the A scheme
Shareholder ordinary resolution 2: Amendment of the Billion asset management agreement
Shareholder ordinary resolution 3: General authority
One vote per share held by Rebosis shareholders, recorded in the register on the voting record date
Unless otherwise instructed my proxy may vote or abstain from voting as he/she thinks fit.
Signed this
day of
2015
Signature
Assisted by me (where applicable)
(State capacity and full name)
A shareholder entitled to attend and vote at the general meeting is entitled to appoint a proxy to attend, vote and speak in his/her stead. A proxy need not be
a member of the company. Each shareholder is entitled to appoint one or more proxies to attend, speak and, on a poll, vote in place of that shareholder at the
general meeting.
Forms of proxy must be deposited at Computershare Investor Services Proprietary Limited, 70 Marshall Street, Johannesburg 2001 (PO Box 61051,
Marshalltown 2107) to be received by no later than 10h00 on Wednesday, 20 May 2015.
Please read notes on the reverse side hereof
NOTES TO THE FORM OF PROXY:
1.
Only unitholders who are registered in the register of the company under their
own name on the date on which unitholders must be recorded as such in the
register maintained by the transfer secretaries, Computershare Investor Services
Proprietary Limited, being Friday, 15 May 2015 (the “voting record date”), may
complete a form of proxy or attend the general meeting. This includes unitholders
who have not dematerialised their shares or who have dematerialised their shares
with “own name” registration. The person whose name stands first on the form of
proxy and who is present at the general meeting will be entitled to act as proxy to
the exclusion of those who names follow. A proxy need not be a unitholder of the
company.
2.
Certificated unitholders wishing to attend the general meeting have to ensure
beforehand with the transfer secretaries of the company (being Computershare
Investor Services Proprietary Limited) that their shares are registered in their own
name.
3.
Beneficial unitholders whose shares are not registered in their “own name”, but in
the name of another, for example, a nominee, may not complete a proxy form,
unless a form of proxy is issued to them by a registered unitholder and they should
contact the registered unitholder for assistance in issuing instructions on voting
their shares, or obtaining a proxy to attend, speak and, on a poll, vote at the
general meeting.
4.
Dematerialised unitholders who have not elected “own name” registration in the
register of the company through a Central Securities Depository Participant
(“CSDP”) and who wish to attend the general meeting, must instruct the CSDP
or broker to provide them with the necessary authority to attend.
5.
Dematerialised unitholders who have not elected “own name” registration in the
register of the company through a CSDP and who are unable to attend, but wish
to vote at the general meeting, must timeously provide their CSDP or broker with
their voting instructions in terms of the custody agreement entered into between
that unitholder and the CSDP or broker.
6.
A unitholder may insert the name of a proxy or the names of two or more
alternative proxies of the unitholder’s choice in the space, with or without deleting
“the chairman of the general meeting”. The person whose name stands first on the
form of proxy and who is present at the general meeting will be entitled to act as
proxy to the exclusion of those whose names follow.
7.
The completion and lodging of this form will not preclude the relevant unitholder
from attending the general meeting and speaking and voting in person thereat to
the exclusion of any proxy appointed, should such unitholder wish to do so. In
addition to the aforegoing, a unitholder may revoke the proxy appointment by (i)
cancelling it in writing, or making a later inconsistent appointment of a proxy; and
(ii) delivering a copy of the revocation instrument to the proxy, and to the
company.
8.
The revocation of a proxy appointment constitutes a complete and final
cancellation of the proxy’s authority to act on behalf of the relevant unitholder as
of the later of the date:
8.1 stated in the revocation instrument, if any; or
8.2 upon which the revocation instrument is delivered to the proxy and the
relevant company as required in section 58(4)(c)(ii) of the Companies Act,
71 of 2008, as amended (the “Companies Act”).
9.
Should the instrument appointing a proxy or proxies have been delivered to the
company, as long as that appointment remains in effect, any notice that is required
by the Companies Act or the company’s Memorandum of Incorporation to be
delivered by the company to the unitholder must be delivered by the company to:
9.1 the unitholder; or
9.2 the proxy or proxies if the unitholder has in writing directed the relevant
company to do so and has paid any reasonable fee charged by the company
for doing so.
10. A proxy is entitled to exercise, or abstain from exercising, any voting right of the
relevant unitholder without direction, except to the extent that the Memorandum
of Incorporation of the company or the instrument appointing the proxy provide
otherwise.
11. If the company issues an invitation to unitholders to appoint one or more persons
named by the company as a proxy, or supplies a form of instrument appointing a
proxy:
11.1 such invitation must be sent to every unitholder who is entitled to receive
notice of the meeting at which the proxy is intended to be exercised;
11.2 the company must not require that the proxy appointment be made
irrevocable; and
11.3 the proxy appointment remains valid only until the end of the relevant
meeting at which it was intended to be used, unless revoked as contemplated
in section 58(5) of the Companies Act.
12. Any alteration or correction made to this form of proxy must be initialled by the
signatory/ies. A deletion of any printed matter and the completion of any blank
space(s) need not be signed or initialled.
13. Documentary evidence establishing the authority of a person signing this form of
proxy in a representative capacity must be attached to this form unless previously
recorded by the transfer secretaries of the company or waived by the chairman of
the general meeting.
14. A minor must be assisted by his/her parent/guardian unless the relevant documents
establishing his/her legal capacity are produced or have been registered by the
transfer secretaries.
15. A company holding shares in the company that wishes to attend and participate at
the general meeting should ensure that a resolution authorising a representative to
act is passed by its directors. Resolutions authorising representatives in terms of
section 57(5) of the Companies Act must be lodged with the company’s transfer
secretaries prior to the general meeting.
16. Where there are joint holders of shares any one of such persons may vote at any
meeting in respect of such shares as if he were solely entitled thereto; but if more
than one of such joint holders be present or represented at the meeting, that one
of the said persons whose name appears first in the register of unitholders of such
shares or his proxy, as the case may be, shall alone be entitled to vote in respect
thereof.
17. On a show of hands, every unitholder of the company present in person or
represented by proxy shall have one vote only. On a poll a unitholder who is
present in person or represented by a proxy shall be entitled to that proportion of
the total votes in the company which the aggregate amount of the nominal value
of the shares held by him bears to the aggregate amount of the nominal value of all
the shares of the relevant class issued by the company.
18. The chairman of the general meeting may reject or accept any proxy which is
completed and/or received other than in accordance with the instructions,
provided that he shall not accept a proxy unless he is satisfied as to the matter in
which a unitholder wishes to vote.
19. A proxy may not delegate his/her authority to act on behalf of the unitholder, to
another person.
20. A unitholder’s instruction to the proxy must be indicated by the insertion of the
relevant number of shares to be voted on behalf of that unitholder in the
appropriate space provided. Failure to comply with the above will be deemed to
authorise the chairperson of the annual general meeting, if the chairperson is the
authorised proxy, to vote in favour of the resolutions at the general meeting or
other proxy to vote or to abstain from voting at the general meeting as he/she
deems fit, in respect of the shares concerned. A unitholder or the proxy is not
obliged to use all the votes exercisable by the unitholder or the proxy, but the total
of votes cast in respect whereof abstention is recorded may not exceed the total of
the votes exercisable by the unitholder or the proxy.
21. It is requested that this form of proxy be lodged or posted or faxed to the transfer
secretaries, Computershare Investor Services Proprietary Limited at 70 Marshall
Street, Johannesburg 2001 (PO Box 61051, Marshalltown 2107) to be received by
no later than 10h00 on Wednesday, 20 May 2015. A quorum for the purposes of
considering the ordinary resolutions shall comprise 25% of all the voting rights
that are entitled to be exercised by unitholders in respect of each matter to be
decided at the general meeting. In addition, a quorum shall consist of three
unitholders of the company personally present or represented by proxy (and if the
unitholder is a body corporate, it must be represented) and entitled to vote at the
general meeting.
22. This form of proxy may be used at any adjournment or postponement of the
general meeting, including any postponement due to a lack of quorum, unless
withdrawn by the unitholder.
23. The aforegoing notes contain a summary of the relevant provisions of section 58
of the Companies Act, as required in terms of that section.