»
Sep 11, 2007:
Shops For Africa Ltd, which has been operating under a cautionary since early June 2007, is planning to relist on the JSE as a new-look, recapitalised property investment and development company called SA REIT LTD.
SA REIT will be listed towards the end of September in the real estate holdings and development sector of the JSE.
The company announced today that it has entered into agreements to acquire a portfolio of 10 properties, including three development opportunities, for a total consideration of R370m. It proposes settling these acquisitions through the issue of 546m shares at 50 cents per share equating to R273m via vendor placements with the balance being funded from borrowings.
The transactions constitute a reverse takeover in terms of the listing requirements as the issued share capital of the company will have more than doubled following the acquisitions.
The venture is being driven by Arnold Maresky, a former director of Paramount Property Fund Ltd. Maresky was appointed CEO of Shops in March.
SA REIT will be an important investment for the JSE listed Trematon Capital Investments Ltd, who will be represented on the board and investment committee and together with Rabie Property Group, will provide strategic guidance where necessary.
Arnold Shapiro, the CEO of Trematon, said that the Trematon board had a lot of confidence in the SA REIT team and the other strategic partners. The SA REIT executives would also hold significant equity in the company in order to ensure that the interests of management and shareholders are aligned.
Maresky said Rabie Property Administrators, a wholly owned subsidiary of the Rabie Property Group, which currently administers about 25 buildings in the Western Cape, including three shopping centres with a total capital value in excess of R1.2bn, would be responsible for the day to day management of the company's property portfolio.
Cohen, who with the other directors of Rabie Property Group will jointly hold 15% of the equity in SA REIT LTD, said it provided them with an ideal opportunity to diversify their asset base.
"We will be bringing our collective development skills to the table providing great opportunities and synergies between the two companies," he said.
Maresky said today that the acquisitions, which are subject to regulatory and shareholders' approvals and the lifting of the suspension on the trading of Shops shares, were being made in line with the company's strategy to create a leading South African property investment and development company that delivers capital returns above the market average. Properties had been selected where the company could add value and thus create superior returns for shareholders down the line, he said.
The proposed portfolio comprises nine commercial and industrial properties in the Western Cape and one in Port Elizabeth.
The Cape Town properties include three re-development opportunities in the heart of Cape Town's CBD, 33 Waterkant, and the Curry and CMH buildings, of which the latter two comprise an entire block bordered by Hans Strijdom, Bree and Long Streets which they plan to redevelop at a cost of about R500m.
Other buildings in the portfolio are 22 Long Street (the old Liberty Life building), the Midas buildings in Goodwood and Port Elizabeth, the Natural Stone Warehouse in Paarden Eiland, and a site assembly on the Foreshore which comprises the Master Tyre, African Wholesalers and Reeds buildings.
Maresky said that while the portfolio would initially be concentrated in the Western Cape, it was envisaged that this would be expanded countrywide in due course.
"The branding of the company as SA REIT LTD was applied with foresight as the industry faces changes in line with international trends."
He said the proposed acquisitions had received strong support in the market and the successful completion of the transactions would see Trematon holding 18%, and Absa and Nedbank a total of 14% of the equity in SA REIT LTD.
